Catastrophic Claims Are Impacting Healthcare

Tokio Marine HCC – Stop Loss Group (TMHCC), a leading provider of medical stop loss insurance, continues to see the number of claims in excess of $1M rise at an unprecedented rate.

With nearly one fifth of spending in the United States devoted to healthcare, the increasing catastrophic costs are causing consultants and employer groups to seek solutions for controlling the rising costs associated with employee benefit coverage. As these costs continue to rise, TMHCC is closely monitoring and analyzing them. And while rates will be impacted by the changing market, our ability to help you understand and potentially control these costs is our top priority.

The graph above shows the experience TMHCC has seen over the past 7 years. The blue line represents a 7.8% growth rate of employee lives. The orange bar represents the 24.2% average annual growth rate of claimants in excess of $1M, and the gray bar represents the total dollars reimbursed at a growth rate of 28.2%. Our $1M+ claimants are growing 3.1 times faster than our enrollment, coupled with our total amount reimbursed being 3.6 times our enrollment growth. It is apparent that the rate of claims in excess of $1M and the total dollars reimbursed substantially outpaces the growth rate of employee lives.

For more information regarding catastrophic claims and their impact to stop loss rates, please contact your marketing representative or underwriter.