Big claims

National Underwriter looks at the effect that removing maximum benefits may have on employers and insurance markets. Here is an excerpt:

Alison Saifer, an actuary, said in June during a stop-loss session organized by the Society of Actuaries (SOA), Schaumburg, Ill., that she has seen estimates indicating that the incidence of $1 million claims increased to about seven per 100,000 lives in 2008, from fewer than two per 100,000 lives per year in 2002.

Many big claims are the result of transplants [this is our link], cancer [ours again], premature birth or blood-clotting disorders.

Milliman Inc., Seattle, reported in 2008 that hospitals were billing an average of more than $750,000 for 7 of 16 types of transplants. Total national expenditures on all of the procedures combined amounted to an average of less $20 per plan enrollee per quarter – but health plan profits often are less than $10 per enrollee per quarter.

Before the Affordable Care Act came along, many large employers offered coverage without maximums, and stop-loss companies were eager to serve those employers, Fleet says.

The stop-loss market has been soft since the early 2000s, and the Affordable Care Act could help it harden, Fleet says. “Employers that don’t traditionally buy stop-loss coverage may buy it now,” Fleet says.