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  #1  
Old 05-07-2009, 08:43 PM
MGN MGN is offline
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Default Question on Risk Levels of Health Insurers

Ok, I'm a P&C guy, but I'm very curious about the health insurance world, so I have another question for health actuaries. I may have more in the near future, but here's a quickie.

What's the biggest large loss you've ever seen get paid out on an individual life? Like, what sickness, injury or illness is the most expensive?

Related: what "cause of loss" is the biggest for private insurers? So, what disease or condition has the largest pure premium, as p&c people call it? Cancer? A specific type of cancer? Heart Attack? Kidney Dialysis? Diabetes?

In particular, I'm wondering about non-trauma incidents, specifically those that can't be subrogated to a liability insurer. So I guess quadripilegia is extremely expensive, though that's one that we see all the time. The difference though is that liability or Work Comp carriers are on the hook for every nickel of keeping the person alive for as long as they live, and that can run to the 10-20 million level. So I'm guessing that, at least for specific health conditions, the costs must be capped roughly in that range, no?

On a related note, is it possible to buy a health insurance policy that covers only named perils? Similar to P&C?

Thanks in advance for comments or info. Just curious.
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Old 05-07-2009, 08:49 PM
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Prematurely-born twins.
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Old 05-07-2009, 09:00 PM
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Quote:
Originally Posted by MGN View Post
Ok, I'm a P&C guy, but I'm very curious about the health insurance world, so I have another question for health actuaries. I may have more in the near future, but here's a quickie.

1. What's the biggest large loss you've ever seen get paid out on an individual life?
2. Like, what sickness, injury or illness is the most expensive?

3. Related: what "cause of loss" is the biggest for private insurers?
4. So, what disease or condition has the largest pure premium, as p&c people call it?
5. Cancer?
6. A specific type of cancer?
7. Heart Attack?
8. Kidney Dialysis?
9. Diabetes?

10. On a related note, is it possible to buy a health insurance policy that covers only named perils? Similar to P&C?
Numbering makes it easier to answer.
1. Premies. Run from $100,000-400,000 or more.
2. Um, premies.
3. Premies. Oh, you mean util*severity? Heart conditions, I think. Number on cause of death, after all. So the utilization/incidence times surgery costs, times Boom factor....
4. Heart conditions.
5. Yes.
6. No.
7. No. $50K-150K.
8. No. This is usually taken care of by Medicare, age-independent.
9. No. Manageable with drugs. Many carriers identify and manage members with diabetes.
10. Yes. It's a niche market, and I suspect that people buying such coverages know something about the insured (themselves) more than they'd like to let on (genetic stuff).

My opinions. Others' might vary.
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Old 05-07-2009, 09:38 PM
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Implantable defribillators are a pretty penny.

We have had cases run up to 7 digits. There is lots of yelling when it happens. But I don't remember what it was specifically. Im going try to look into premies tomorrow. I didnt realize it was such a hot-button item.
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Old 05-07-2009, 10:06 PM
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Not the most expensive overall, but when an insured gets away with multiple prescriptions for Actiq from all different pharmacies over the course of a couple months that can add up pretty quick. Not that my company would ever have had such poor controls in place to not catch such a thing. I'm speaking in hypotheticals here.
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Old 05-08-2009, 08:14 AM
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Preemies are the most common large claim. We've already had 4 $500K+ claims this year. The biggest claim I have ever seen related to a baby - she was a week old and went in for her one week check-up. They found out her heart was in distress, and ended up taking her to the hospital, where she had the most depressing run I've ever seen, including a heart transplant and a stroke. They ended up droppping coverage and moving to medicaid after 4 months, but at that point, she was approaching $3-4 million in claims. I also saw a guy who's body simply shut down - he had a $2 million lifetime max that he hit after about two months of heroic attempts to save him. He ultimately hit $5 million in charges before he passed away.
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Old 05-08-2009, 09:00 AM
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Hemophiliacs can be expensive.

Premature newborns are the usual winners.

Heart attacks are actually money-savers in a way, or at least they used to be. Back in the day, people died of heart attacks. Now they suck up high 5 or 6 digits, get on a bunch of drugs, have multiple surgeries, have another heart attack, consume more money, and die later. It was a lot cheaper when the initial heart attack just killed them.
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Old 05-08-2009, 09:32 AM
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Quote:
Originally Posted by FormLetter View Post
Hemophiliacs can be expensive.

Premature newborns are the usual winners.

Heart attacks are actually money-savers in a way, or at least they used to be. Back in the day, people died of heart attacks. Now they suck up high 5 or 6 digits, get on a bunch of drugs, have multiple surgeries, have another heart attack, consume more money, and die later. It was a lot cheaper when the initial heart attack just killed them.
Health Insurance Co's should be supplemented by Life insurance companies. They (LICs) are probably making a killing at our ability to extend of life.
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Old 05-08-2009, 10:35 AM
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So there's no identifiable cause excluding major compounding complications where the average severity is into 7 digits? That surprises me as I would imagine that a month in the ICU would run over 1m. I guess it makes sense though that it takes some pretty atypical complications and then more complications to cause something like that.

Anyone seen any claims on an individual life run over 5m? 10m?

By the way, reading these posts made my morning. Just thought I'd add that. Keep 'em coming.
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Old 05-08-2009, 10:56 AM
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10 years ago there were no (or very very little) claims hitting $1M. They are starting to become more frequent, as well as expensive. 10 years from now it will be the $5M claims more frequent. OK, anyone for health care rationing now (or in 10 years)?
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