Viewpoints from Craig Hasday

Regardless of your plan’s size or funding arrangement, prepare yourself. Large claims are coming.

According to a QBE report, claims over $200,000 increased by 17% from 2020 to 2021. While it was harder to see through the crystal ball during the COVID-19 years, it is starting to get clearer again. This trend will continue. There are several factors in play. COVID-19 claims are expected to diminish, however, the cost of deferred care is emerging. Circulatory claims are on the rise, but more acutely, the cost of high-cost therapies is expected to drive healthcare cost trends. Leader’s Edge magazine reported that over 1,000 new cell and gene therapies are in development worldwide, with 70 expected to be approved by 2030. And inflation, which has not fully been reflected due to typical three-year contracting patterns, is back with a vengeance. Hospital contracts are no doubt going to be combative as margins are pressed by increases in labor costs and hospital supplies. Expect highly charged emotions as the network managers and hospitals publicly battle with patients caught in the crossfire and HR teams will seek updates to calm those concerns.

What strategies can plan sponsors can consider for managing costs while offering patients access to the right drugs at an affordable price?

Striking a balance can involve assuring that plan sponsors are investing in appropriate treatments to improve the health of their members while helping patients find payment assistance sources as needed. Let’s take a closer look at pharmacy cost drivers, potential payment solutions for patients, and pharmacy benefit management solutions for plan sponsors.

Self-insured employers will see these cost increases directly and through increases in stop-loss premiums.

Rates will increase at higher levels for insured plans as traditional insurers look to build in margins to offset these cost trends.

Insurance brokers are going to be busy coming up with new and creative solutions with recession fears mounting.

On Thursday, June 15, EPIC will be hosting our next Benefits Curve: Insights to Action webinar on strategies to help employers navigate these frightening trends. I would urge you to register and attend. It will be an hour well spent.


Catastrophic Claim Trends and How Employers Can Respond

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Craig Hasday

President, National Employee Benefits Practice