High-Dollar Health Insurance Claims

Like a lot of things in life, in health care a few people account for a huge percent of total spending, and a few services comprise the majority of that spending.  The self-fund employer plans and commercial health plans pay much of the cost for expensive services, but they backstop themselves by buying what is called reinsurance in the case of health plans or stop-loss carriers.  Sun Life provides stop-loss insurance and writes an annual report summarizing the types of services that result in high-dollar claims.  (Sun Life Report)   According to the report, about half of all stop-loss claims come from ten conditions, which include cancers, congenital conditions and birth issues, septicemia, transplants and complications of medical or surgical care.  Hemophilia, which is still very expensive, dropped out of the top ten for the first time in several years.  Cancer drugs, particularly infusable or injectable ones, are a specific driver of high-dollar claims.  The number of claims reaching a million dollars or more was up by 9% from 2019 to 2020.  And yes, CV-19 had an impact, as the company saw 100 claims for the disease that hit stop-loss triggers.

We are likely to see even more people with high health care spending, as expensive specialty drugs continue to hit the market and cell and gene therapies become more widespread.  The new treatments have made some cancers more of a chronic disease, not often completely cured, so leading to significant spending year-after-year.  I would anticipate that cancer will be the source of most high-dollar claims over the next few years.