In mid-June 2015, Sun Life Financial released its Stop Loss Research Report which includes its Top Ten catastrophic claims conditions. The data for this report was collected from 2011 – 2014 from employer data ranging in size from 50 – 100,000 employees. The following is a brief overview of the Sun Life report.
The Top Ten costliest claims conditions remained largely the same compared with the 2014 report. The top ten conditions comprise more than half (52.8%) of the total claims, or $1.1 billion in payments, from the participating employers. Cancer topped the list with a quarter (25.7%) of the reimbursements and there is no sign of that changing soon.
Two of the top five costliest claims affect infants, “congenital anomalies” and “disorders relating to short gestation and low birth weight” totaling 7.7% of total paid stop-loss claims.
Also in the top five costliest claims is chronic/end-stage renal disease (kidneys). This condition is both common and expensive to treat. The number of claims has remained fairly level over the years that the study has been published and Sun Life expects this to continue.
The noticeable upward trend in 2013 and 2014 is transplants, new to the Top Ten list. While transplants are not common, they are costly, ranging in fee from $155,000 – $300,000. In addition, there are pre-surgery and post-surgery expenses and sometimes expenses due to complications that can double the overall cost. Lung, heart, kidney, and liver transplant procedure levels were fairly constant, however the number of bone marrow and stem cell transplants increased dramatically. This is why Sun Life is predicting the potential for an upward trend in the years to come. The number of bone marrow/stem cell transplants was low overall but tripled from 2011 to 2014. This may attributable to new uses of the transplant technology including ovarian, testicular and brain cancer and advances in medical procedures, matching methods, toxicity reduction and targeted immunosuppressive agents.
Nationwide, 5% of the general population spends 50% of the health care dollars. This is echoed in stop-loss claims in which 1.5% of employees covered by self-funded plans generated million dollar claims that totaled 16.7% of the paid stop-loss claims. Nearly half of the million-dollar claims were generated by the top three conditions in the Top Ten list. Sun Life published a prediction that “the medical conditions of million-dollar claimants will continue to be a major driver in stop-loss claims payments.”
Employers that choose lower stop-loss deductible levels have lower catastrophic claims risk. The converse is also true. Sun Life reports that employers with stop-loss deductibles of $50,000 or less paid 42.2% of total catastrophic claim cost on average while employers with stop-loss deductibles of $500,000 or more paid 66.3% of the catastrophic claims on average.
Included in the Sun Life report is a self-assessment that may be useful to your organization in determining if there are ways that you can manage the rising costs of catastrophic medical claims.
Read the full Sun Life Catastrophic Claims Report 2015