The U.S. business group of Sun Life Financial, Inc. (NYSE: SLF, TSX:
SLF) today reported a tenfold rise in the number of individual $1
million or more catastrophic claims paid by the company over the past
four years. These findings are based on a study released today by Sun
Life Financial U.S., the largest independent writer of stop-loss
insurance in the U.S., with $915 million of in-force premium as of
December 31, 2013.
The most significant rise related to complications surrounding dependent
infants, including premature births, failure to thrive newborns and
congenital anomalies, according to Sun Life. While there was no single
explicit driver for the increase in these particular complications, Sun
Life continues to monitor the underlying business, specific claims, and
potential trends related to health care costs and demographics. The
Company also notes that these diagnoses often stemmed from normal
pregnancies that unexpectedly turned into catastrophic claims,
reinforcing the need for protection against "unpredictable" catastrophic
claims.
“Sun Life is seeing more catastrophic stop-loss claims with higher price
tags,” said Karin James, Assistant Vice President of Strategic
Operations for Sun Life’s Stop-Loss business. “In 2013 alone, we paid
more than double the number of individual $1 million or more
catastrophic claims compared to the prior year, by far the biggest
annual jump in the study. 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.”
The study ranks the top ten mostly costly stop-loss catastrophic claims
filed between 2010 and year-end 2013 by Sun Life Stop-Loss insurance
policyholders with up to 100,000 employees. In the four-year period, Sun
Life Financial processed over 100,000 claims and reimbursed over $1.9
billion in catastrophic claims to self-funded employers. The report
shows the aggregate cost for each claim condition reimbursed by Sun
Life. The cost reflects two factors: (1) severity, or the underlying
cost of the claim and, (2) frequency, or the number of times the claim
occurs.
“We believe sharing insights on the scale and trend of catastrophic
claims can help self-insured employers, brokers, and TPAs devise better
strategies to manage the costs of catastrophic illness,” added James.
“Without stop-loss insurance, the self-insured employers in our study
would have paid an additional $2 billion in catastrophic medical costs
from 2010 to 2013. The findings of this year’s study also reveal the
need to protect against claims from routine health events that are not
expected to be catastrophic.”
The report’s top ten claims conditions remain mostly the same as last
year’s rankings, with cancer remaining the costliest, followed by
chronic renal disease. Below are the key findings on the costliest
claims:
-
The ten costliest claims conditions comprise over half (53%) of the $2
billion in claims that Sun Life reimbursed to its Stop-Loss
policyholders between 2010 and 2013.
-
The three most costly conditions -- malignant neoplasm (cancer),
chronic/end state renal disease (kidneys), and
leukemia/lymphoma/multiple myeloma (cancer) -- represent over a third
(34%) of all stop-loss claims payments that Sun Life made to
policyholders from 2010 to 2013.
-
Cancer continues to be the most costly stop-loss catastrophic illness
by a significant margin, comprising one quarter (25%) of all stop-loss
payments during the four-year period.
-
Malignant neoplasm (cancer) was the costliest single condition,
representing just over 17% of all stop-loss claims reimbursements.
The ten catastrophic medical conditions from 2010 to 2013, ranked by
aggregate cost:
|
|
Medical condition
|
|
|
Percentage of paid stop-loss claims
|
|
|
Value of paid top-loss claims
|
1
|
|
Malignant neoplasm (cancer)
|
|
|
17.5%
|
|
|
$347,983,877
|
2
|
|
Chronic/end stage renal disease (kidneys)
|
|
|
8.2%
|
|
|
$164,304,588
|
3
|
|
Leukemia, lymphoma, and/or multiple myeloma (cancer)
|
|
|
8.0%
|
|
|
$159,012,585
|
4
|
|
Congenital anomalies (conditions present at birth)
|
|
|
4.3%
|
|
|
$86,438,173
|
5
|
|
Disorders relating to short gestation and low birth weight
(premature births)
|
|
|
3.5%
|
|
|
$70,259,714
|
6
|
|
Cerebrovascular disease (brain blood vessels)
|
|
|
2.5%
|
|
|
$50,462,023
|
7
|
|
Congestive heart failure
|
|
|
2.5%
|
|
|
$50,154,043
|
8
|
|
Complications of surgical and medical care
|
|
|
2.3%
|
|
|
$45,700,864
|
9
|
|
Pulmonary collapse/respiratory failure (lungs)
|
|
|
2.3%
|
|
|
$45,484,490
|
10
|
|
Septicemia (infection)
|
|
|
2.1%
|
|
|
$40,979,717
|
|
|
|
|
|
|
|
|
|
To help employers devise a set of cost-containment best practices, the
Sun Life report also provides important questions for the employer to
consider, such as whether the following approaches are in use:
-
Workplace wellness and early detection programs;
-
A benefit program that offers protection against cancer at both the
employer and employee level;
-
An administrator with a direct focus on active claim management,
including early detection through the use of predictive modeling and
data analysis;
-
A partnership with an administrator and stop-loss carrier that
provides access to nationwide cost-containment vendors;
-
A “no new lasers at renewal” option with a renewal rate cap included
in the stop-loss policy.
“Self-insured employers, brokers, and third party administrators have
the chance to implement cost containment strategies that protect both
their employee’s quality of care as well as the company’s bottom line,”
said Sun Life Financial Stop-Loss Claims Director Laura Rollinson, R.N.,
who led the claims study. “We believe a best-in-class stop-loss program
can be a win for all parties.”
To request the full research report, please visit: Sun
Life Financial - Leading Catastrophic Claims Conditions.
About Sun Life Stop-Loss
Sun Life Financial is the largest
independent writer of stop-loss insurance in the United States. At
year-end 2013, the Sun Life U.S. Stop-Loss business had more than 1,600
policyholders, $915 million in annual premium, and approximately 4.6
million covered lives.
About Sun Life Financial
Sun Life Financial is a leading
international financial services organization providing a diverse range
of protection and wealth accumulation products and services to
individuals and corporate customers. Sun Life Financial and its partners
today have operations in key markets worldwide, including Canada, the
United States, the United Kingdom, Ireland, Hong Kong, the Philippines,
Japan, Indonesia, India, China, Malaysia, Vietnam, and Bermuda. Sun Life
Financial Inc., the holding company for the Sun Life Financial group of
companies, is a public company. It is not an insurance company and does
not offer insurance products for sale in the United States or elsewhere,
and does not guarantee the obligations of its insurance company
subsidiaries. Sun Life Financial Inc. trades on the Toronto (TSX), New
York (NYSE), and Philippine (PSE) stock exchanges under the ticker
symbol SLF. In the United States and elsewhere, insurance products are
offered by members of the Sun Life Financial group that are insurance
companies.
In the United States, Sun Life Financial provides a range of products
and services to employers and their employees, including Group and
Voluntary Life, Disability, Dental, Critical Illness, Accident, and
Stop-Loss insurance products. Product offerings may not be available in
all states and may vary depending on state laws and regulations. For
more information, please visit www.sunlife.com/us.
SLPC 25887 05/14 (exp: 05/19)
Copyright Business Wire 2014