There are a range of illnesses that can prompt a self-funded employer to make a claim on their stop-loss insurance policy, but a new study by Sun Life Financial Inc. finds that a majority (53 percent) of the $5.3 billion in such claims paid by insurers from 2012 to 2015 came from just 10 ailments.
The study shows the incredible impact of cancer. All types of cancer account for more than a quarter of all stop-loss claims, with breast cancer alone accounting for 13 percent of the total reimbursements.
Claims that exceeded $1 million continue to be rare—only 319 during the four-year period—but they account for nearly a fifth of the total reimbursements.
They have also increased every year, from 60 in 2012 to 107 in 2015. The number of claims exceeding $2 million, however, has not risen steadily, jumping from two to 20 in 2013, but then dropping again in the subsequent two years.
“By highlighting the conditions that create catastrophic claims and providing insights into trends influencing high costs, we can help employers anticipate what they’ll see when self-funding and raise awareness about the importance of cost-containment resources and stop-loss insurance,” says Brad Nieland, vice president of Sun Life Financial's stop-loss division.
Here are the top 10 ailments associated with self-funded employer claims:
A condition that arises when the body reacts violently to an infection, damaging critical organs in the process and even leading to septic shock, septicemia resulted in $54.7 million in reimbursements between 2012 and 2015, or 2.4 percent of the total.
Sepsis can be life threatening, with 50 percent of all cases starting as an infection in the lungs.
9. Respiratory failure
Pulmonary collapse or respiratory failure was the ninth leading claim, resulting in $55 million in reimbursements from stop-loss insurance policies. Risk factors for the condition include binge-drinking, smoking, and working in an environment that leads to inhalation of chemicals that irritate the lungs, all issues that employers can have a hand in improving.
Top causes of respiratory failure include lung diseases such as chronic obstructive pulmonary disease, pnuemonia, pulmonary embolism, and cystic fibrosis.
8. Cerebrovascular disease
Most commonly manifested through a stroke, cerebrovascular disease prompted $57.4 million in reimbursements between 2012 and 2015, for 2.4 percent of the total. Although strokes are the fifth leading cause of death for Americans, two-thirds of patients are over the age of 65, suggesting the burden of caring for stroke patients falls mostly on Medicare, rather than employers.
Stroke is the leading cause of long-term disability in the United States, with approximately 795,000 people suffering from a stroke each year.
7. Congestive heart failure
The condition afflicts roughly 2 percent of the adult population and 5 percent of those aged 60 to 69, resulting in $57.8 million in reimbursements from catastrophic insurance policies between 2012 and 2015.
Affecting nearly 5 million Americans, heart failure is the only major cardiovascular disorder on the rise.
Transplants are becoming more common, but the operations are not as likely to force catastrophic coverage. While transplants increased 65 percent between 2012 and 2015, the total amount of stop-loss reimbursements paid because of transplants only ticked up 0.7 percent compared to 2011 to 2014, to $62.2 million.
One organ donor can save up to eight lives. That sounds like a lot, but 120,000 people are in need of an organ transplant in America.
5. Premature births/low birth weight
Babies that are born prematurely and have to undergo long hospital stays in incubators or other treatment can prompt astronomical costs for patients and their employers. From 2012 to 2015, employers received $75 million in reimbursements related to such costs incurred by employees, or 3.2 percent of the total.
According to the World Health Organization, an estimated 15 million babies are born too early each year. One million die due to complications.
4. Congenital anomalies
The top claim specifically related to a condition at birth, congenital anomalies prompted $96.3 million in reimbursements from 2012 to 2015. That accounts for 4.1 percent of total reimbursements.
Congential disorders, such as Down syndrome and spina bifida, affect 3 percent to 4 percent of all babies born in America.
3. Chronic renal disease
Employers received $156 million from claims related to severe disease of the kidneys, accounting for 6.7 percent of the total. While the costs of treating the condition have decreased 21 percent in the past four years, the disease remains common and costly. According to some estimates, chronic renal failure affects as much as 10 percent of the population, but it is the later stages of the condition that are the most severe and costly, often resulting in kidney transplants.
Kidney disease affects 26 million Americans. Currently, 1 in 3 American adults is at risk for developing kidney disease.
2. Leukemia/lymphoma/multiple myeloma
The second family of cancer's financial impact is great, but much smaller. Employers received $188 million between 2012 to 2015 from stop-loss reimbursements related to these conditions, accounting for 8.1 percent of total claims nationally. The value of such claims has remained steady in recent years.
New cases of leukemia, lymphoma, and myeloma are expected to account for 10.2 percent of the more than 1.6 million new cancer diagnoses in 2016.
1. Malignant neoplasm
The leading type of cancer is by far the top reason employers make claims on their stop-loss policies. These types of cancer accounted for 18.5 percent of all stop-loss claim reimbursements from 2012 to 2015, totaling a whopping $429 million. That represents a 0.9 percent increase over the 2011 to 2014 period.
Breast cancer is a form of maligant neoplasm that affects 1 in 8 U.S. women.