Stop-loss insurers are busy writing pandemic claims checks

As the pandemic evolved, we saw increased claims severity in younger populations covered by employer-sponsored plans, particularly for patients with comorbidities,” says Tara Krauss, Head of Accident & Health at QBE North America.

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Self-funded employee benefits plans filed unprecedented claims with their medical stop-loss insurers in 2022-21 as the pandemic took its toll.

A study of its claims by medical stop-loss insurer QBE quantified the spike. The analysis found that claims related to COVID-19 increased 108% from 2020 to 2021.

“Moreover, this increase was widespread across age groups, with the youngest age group (0-29) up fivefold. Through April 2022, claims within the younger age groups, 0-29 and 30-39, have already reached levels similar to all of 2021,” the study reports.

QBE examined claims in excess of $200,000 and says: That frequency increased 17% from 2020 to 2021. Respiratory claims nearly doubled; neoplasms increased 21%; mental illnesses claims fell 15%, yet remained well above pre-COVID levels; and circulatory claims fell 16%.”

QBE says that delayed care due to COVID-19 concerns contributed to the escalating claims.

COVID-19 had another deleterious impact on self-funded plan members, QBE says: More claims were made by younger plan members than pre-COVID-19. The average age of a claimant fell from 54 years of age in 2020 to 49 in 2021. Average claims cost grew by 87% over the same period.

The analysis raised eyebrows within QBE, an organization rarely surprised by claims data.

Related: Employees hospitalized with COVID cost employers $30,000+ over 6 months

“We saw a few multimillion-dollar claims, which we didn’t expect at the start of the pandemic. One case that involved a patient in intensive care for more than five months settled at $4.6 million. Furthermore, as the pandemic evolved, we saw increased claims severity in younger populations covered by employer-sponsored plans, particularly for patients with comorbidities,” says Tara Krauss, Head of Accident & Health at QBE North America.

Krauss says QBE expects 2023 to be another high claims year for stop-loss insurers.

“We are seeing early signs of increased severity and anticipate a significant impact through 2023 since neoplasms have for many years represented the largest share of claims above $200,000. In 2021, they accounted for 41%,” she says.