Deciding to self-insure your medical benefit is no easy task.
The one obvious bugaboo: potential high-cost health claims. And once those claims hit a certain point, self-insured plans’ must rely on stop-loss policies to help cover the astronomical price tags that can accompany conditions like cancer and organ transplants.
Sun Life Financial U.S. recently released the “Top Ten Catastrophic Claims Conditions” report, which analyzed the costliest medical conditions covered by Sun Life’s stop-loss insurance from 2012-2015.
According to the report, self-insured plans had $9 billion in billed charges for medical claims between 2012-2015, and stop-loss protection paid out $2.3 million of that amount.
From cancer to infection
Here’s the list of the costliest conditions to give you a clear idea of what types of health issues are impacting self-insured plans the most:
- Malignant neoplasm (cancer), $429.5 million, 18.5% of the $2.3 million in stop-loss protection payouts, 0.9% increase from the previous report.
- Leukemia/lymphoma/multiple myeloma (cancers), $188.6 million, 8.1%, no change.
- Chronic/end-stage renal disease (kidneys), $156.6 million, 6.7%, 1.0% decrease.
- Congenital anomalies (present at birth), $96.3 million, 4.1%, 0.1% decrease.
- Disorders relating to short gestation and low birth weight (premature birth), $75.2 million, 3.2%, no change.
- Transplant, $62.2 million, 2.7%, 0.7% increase.
- Congestive heart failure, $57.8 million, 2.5%, no change.
- Cerebrovascular (blood brain vessel) disease $57.4 million, 2.5%, no change.
- Pulmonary collapse/respiratory failure (lungs), $55 million, 2.4%, no change.
- Septicemia (infection), $54.7 million, 2.4%, 0.2% increase.
All other conditions, $1.09 billion, 47%, 0.5% decrease.
Starting point
Clearly, a lot of research has to be done before a final decision is made on going to self-insurance.
That means getting a clear picture of employees’ health trends via detailed claims info from your current TPA, of course. Here are a few of the questions you’ll want to ask:
- What’s the company’s demographic breakdown (families, single workers, older employees)?
- What type of risk factors do employees have?
- How healthy is the workforce overall?
- How do we calculate absenteeism and productivity losses?
