The article below by Matt Dunning of Business Insurance discusses a report on US medical insurance claims by Sun Life. Though everyone is aware that US and Canadian health care have their differences, these same trends are showing up here. The key difference is the catastrophic claims covered by private insurance (group benefits, Blue Cross, etc.) are primary found in the newer, high-cost drug treatments such as “biologics”, or biopharmaceutical products.
Starting in 2013, the Canadian Life and Health Insurance Associaton Inc. (CLHIA) created the Canadian Drug Insurance Pooling Corporation, specifically to counter these catastrophic high-cost drug claims.
In the absence of progress on a catastrophic drug program in Canada, insurers are banding together in order to share the costs of highly expensive and recurring drug treatments through an industry drug pooling framework.
Going forward, participating insurers will set premiums for fully insured employer drug plans without reference to any pooled high cost drug claims.
This will effectively shelter Canadians from potentially losing their employer-sponsored drug coverage due to a high cost claim — something that was increasingly a risk for those employed by small and medium sized businesses.
Twenty-four insurance companies across Canada, that collectively represent 100 per cent of the supplementary drug market, have committed to joining this pooling framework.
Medical stop-loss claims over $1M ballooned in 2013: Study
by Matt Dunning of Business Insurance
The frequency of catastrophic medical stop-loss insurance claims in excess of $1 million has risen dramatically in the last four years, according to a new report by Sun Life Financial Inc.
Sun Life’s analysis of stop-loss claims processed from 2010 to 2013, released on Friday, revealed that the incidence rate for catastrophic claims exceeding $1 million more than doubled last year to 4.3 per 5,000 claims, compared with incidence rates of 1.8 in 2012 and 0.4 claims in 2010.
The report, “Top Ten Catastrophic Claims Conditions: Spring 2014,” showed that more than two-thirds of the $1 million-plus claims filed in 2013 were for medical care provided to dependent children, primarily related to premature births and postnatal complications.
“In 2013 alone, we paid twice as many individual $1 million or more catastrophic claims compared to the prior year, by far the biggest annual jump in the study,” Karin James, Wellesley, Massachusetts-based assistant vice president of strategic operations for Sun Life’s stop-loss division, said in an email to Business Insurance. “We anticipate costs will only continue to rise as new technologies are adopted, advanced drug therapies are introduced, and the Affordable Care Act increases access for participants.”
Overall, Sun Life’s report said the total cost of catastrophic stop-loss claims processed between 2010 and 2013 was approximately $4.4 billion, with employers contributing roughly $2.4 billion in deductible payments.
Photo Credit: “1972 Emergency Room Bill” by Wnedy Diedrich on Flickr