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. 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 stop loss rates continue to be impacted by the changing market, our ability to help you understand and potentially control these costs is our top priority.

The graph below shows the experience TMHCC has seen over the past 8 years. The blue line represents a 9.9% annual growth rate of employee lives. The orange bar represents the 28.3% average annual growth rate of claimants in excess of $1M, and the gray bar represents the total dollars reimbursed at a growth rate of 30%. Our $1M+ claimants are growing 2.86 times faster than our enrollment, coupled with our total amount reimbursed being 3.03 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.

Looking singularly at the 2018 data by Primary Diagnosis, we can share that Perinatal/Neonatal claims represent 20.7% of all claims and 22.2% of the claim spend on $1M or higher claims. Malignant Neoplasms/Cancers also represent 20.7% of all $1M or higher claims and 20.1% of the claims spend. Injury/Poisoning/External Causes, which includes Burns and Trauma, represents 12.6% of the number of claims and 11% of the claim spend.

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