COVID-19 climbed into the top 10 most costly condition conditions in 2021. According to a recent SunLife High Cost Claims Report, the total COVID-19 spend in 2021 was $114 million. COVID-19 also managed to place in the top 20 for the four year ranking, from 2018 to 2021. This is despite there only being claims for two of those four years.
COVID-19 claims that were severe enough to breach stop-loss deductibles averaged $231,300, with the highest claim at $1.75 million. This is due to the related high-cost hospitalizations.
According to the Sun Life report, total spend on mental and behavioural health claims rose by 22% in 2021; the average cost per claim remained relatively flat at $68,300, indicating that the increase was mostly due to more members having high-cost mental health claims, not higher costs of care. Depressive disorders saw the most significant growth at 85%, while sleep/wake disorders rose by 68%, and alcohol- and opioid-related claims increased as well.
Related to the pandemic are also the rate of workers comp claims. In 2020 workers comp claims, excluding COVID-19, fell by 7.6%. COVID-19 related claims for 2020 and 2021 produced about $500 million in losses. The reason for the decline in claims was due to the fact that the pandemic led to widespread shutdowns and layoffs. This fall in claim frequency is the biggest decline in 20 years. However, the following year, in 2021, the frequency bounced back by a similar amount. This may be due to the increase in temporary workers.
It is clear that the biggest impact of COVID-19 in this sector have been the frequency and severity of claims. Health Insurers are expecting higher or significantly higher costs and that these will continue to accelerate beyond 2022. The significant increase in claims may potentially be matched due to the unknown extent of potential long covid claims and the impact they may have.
COVID-19 has clearly made a huge impact on medical insurance trends. This combined with the changing face of the work environment, has had a significant impact on the future of medical claims.
Read the full SunLife report here: https://sunlife.showpad.com/share/PLcOKngFE0mMV21fGAPli
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