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Medical stop-loss claims over $1M ballooned in 2013: Study

Medical stop-loss claims over $1M ballooned in 2013: Study

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.