Industry Insights: Critical Illness

By Heather & Trevor Garbers

October is National Critical Illness Awareness Month, meant to help spread information about critical illness prevention, treatment, and care.

Consider the following:

According to KFF, the average single health insurance deductible was $1,992 and family was $3,811 in 2022

55% of employees live paycheck to paycheck in the USA today

57% of Americans don’t have enough in savings to cover a $1,000 emergency expense

A little over 19 million new cancer cases are expected to be diagnosed in the US in 2023 (excluding: basal cell and squamous cell skin cancers, and carcinoma in situ (noninvasive cancer) except for urinary bladder

The human side of our industry, is that we play a key role in spreading information about coverages that can help individuals pay for treatment and care when diagnosed with a critical illness. To help us do that job well, staying ahead of market trends is always important. This month, we have interviewed: Heather Scott with Trustmark Voluntary Benefits, Matthew Ennis with Reliance Matrix, Sarah Oliver with Prudential Financial, and Bryan Burke with Sun Life for their insights on workplace based Critical Illness insurance today

What is trending in the Critical Illness market today?

Matthew: This is a multi-faceted question, on the product side, we are seeing more interest in mental health and benefits that appeal to different demographics. For younger employees, benefits for infertility and expanded childhood conditions including autism spectrum disorder are becoming more of a focus Better coverage for underrepresented populations is also being prioritized by carriers (adult diabetes, more comprehensive breast cancer coverage for example) On the customer experience side, services at time of claim are becoming more prevalent More carriers are offering services related to mental health, healthcare navigation, caregiving and financial wellness to name a few Lastly, in terms of process, claims integration continues to evolve to the point where most carriers are doing some type of claims integration on the CI product

Sarah: One of the overarching trends in the Critical Illness insurance space today is expanding coverage provisions to better meet the needs of policyholders and their families. Carriers are working quickly to understand historical trends, recent medical insights and associated financial gaps for working people. This has raised the need to expand what these plans can do to provide value to people experiencing mental wellness concerns or family planning Understanding medical trends and related financial gaps gives carriers the opportunity to provide more value by expanding their products to cover more and provide a more robust solution

Heather: There is a growing interest in benefits and solutions to support employee mental health Employers are looking to navigate and understand the severity and impact of their employees’ mental health conditions With this in mind, one of the ways to promote mental health care is for carriers to include related benefits in critical illness policies to help ensure members can afford the treatment they need

Bryan: The biggest trends in the Critical Illness market today center around: administration, regulation, advances in covered illnesses, access to care and underwriting flexibility. There are a number of new conditions being added to Critical Illness plans - benefits for infectious diseases, caregiver support and mental health illnesses have emerged over the past few years as the pandemic highlighted coverage gaps

With regards to access to care, access can be challenging when treating providers are unavailable in a timely manner, when care is not affordable, and when employees do not have a treatment plan or are unaware of their options There are several services available through Critical Illness policies to help address some of these challenges faced by consumers, through both virtual and digital tools that can help facilitate treatment or provide care for milder illnesses that have potential to progress to moderate or severe.

You also really cannot talk about advancements in Critical Illness or employee benefits without highlighting where most investments are being made and that is in digital, data and analyticsseamless connectivity with administration partners is a key focus to ensure timely and accurate transfer of data. Product development efforts are highly dependent upon structuring the product in a manner that facilitates digital and integrated client experiences, in addition to ease of understanding for consumers and internal stakeholders While insurers make significant investments to digitize the entire client experience from quote through claim, they are also focusing on creating operational efficiencies and leveraging data to share deeper and more impactful insights with clients

Specific to Critical Illness insurance, there is strong market demand to ensure claims are triggered not only from direct claim submissions but are also automatically triggered from other benefits.

QuickHits

Mental health and benefits that appeal to different demographics

For carriers to include related benefits to help ensure the affordability of treatments

Access to Care

Underwriting Flexibility

Bryan: There is also more demand and an opportunity for insurers to highlight the impact of these investments by sharing utilization data with clients to highlight the value of the benefits and identify key areas for future benefits education and communication We are also seeing more requests to take over original entry age on issue age rated products This means holding the original rate or applying a new rate associated with the member’s age at their original effective date

Lastly, from a federal regulation perspective, we are very closely monitoring the tri-agency proposed rulemaking on fixed indemnity products. Specifically, the taxation of benefits and comments related to future potential rulemaking which would prohibit our ability to pay based upon severity of an illness. At the state level, more states are scrutinizing wellness benefits and not allowing them, and some states will not allow hospitalization as a way to distinguish the severity of an illness.

We are seeing carriers expanding their definitions and payouts of covered conditions and paying benefits for lower stage conditions. When it comes to claims, which of these trends do you believe has a meaningful impact on the member?

Heather: Including benefit triggers for early identification and early-stage conditions for Cancer, Heart Attack and Stroke can have a very meaningful impact on the member Receiving care, regardless of the severity of the condition, will incur costs for members. It’s important for members to be assured that they will have the funds available to pay for part or all the costs associated with seeking treatment. More importantly, covering these conditions at an early stage encourages members to seek treatment earlier to avoid having more severe health problems in the future.

Matthew: Lower stage cancers and less severe conditions are more common so I would expect that they would have a meaningful impact to members in terms of claims This is evidenced by cancer in-situ being ranked 4th in claims paid across our book of business I would also say that to the extent that coverage for less severe conditions can incent early detection and treatment, these benefits will have meaningful impact on members and also carriers and employers For example, TIA strokes are often ignored and untreated because people don’t realize what has occurred Having greater awareness and a benefit available to you can increase the likelihood that treatment is sought and can greatly reduce the risk of a major stroke in the future.

Bryan: Lower stage cancers certainly have the biggest impact. This leads to fewer denials and a higher level of client satisfaction. In addition, advancements in covering progressive cancers that were diagnosed prior to the policy effective date further provide value for members. There is also demand to add benefits for autoimmune disorders and expanding progressive disease benefits to cover less severe forms of diseases like: Dementia, Diabetes, Parkinson’s Disease and MS to name a few We are also seeing an emergence of covering conditions that are more prevalent in underserved communities such as: Insulin Dependent Type 2 Diabetes, expanded Cardiac conditions, Sickle Cell Anemia, Premature Birth and other Pregnancy Complications While insurers are busy adding a number of new features, the frequency with which these new features are actually sold remains low unless the corresponding rate load is low, which ultimately means utilization will most likely be low

Sarah: Reducing severity and increasing covered conditions needs to be a top priority of the industry to better care for policyholders All of these examples are important as well as increasing coverage for mental wellness and family planning Adding options to include less severe conditions and having those available allows employers to choose the best package for their employees Optionality is key

What are the most commonly claimed conditions on your Critical Illness plan today?

Sarah: We see a significant number of claims for Cancer (both Invasive and Non-Invasive), Heart Attack, Stroke, and Coronary Artery Disease. When it comes to the wellness benefits specifically, we see the most volume with lipid panels, mammograms, and routine wellness visits.

Heather: Cancer, Heart Attack and Stroke continue to be the most commonly claimed conditions These conditions combined make up 97% of our claim block Carriers are starting to differentiate their plans by focusing on these three conditions and paying in stages depending on the severity of the illness

Bryan: Our top 10 claimed conditions by frequency are: Invasive, Heart Attack, Cancer in Situ, Major Organ Failure, Stroke, End-Stage Kidney Disease, Skin Cancer, Coronary Artery Bypass Graft, Angioplasty/Stents, and Benign Brain Tumors

Matthew: Our top claimed benefits in terms of benefit dollars paid are Cancer, Heart Attack, Wellness, Cancer In-Situ and Stroke.

What do you see as the most commonly denied Critical Illness claims?

Sarah: We see denial volumes focused on claims for instances that happened prior to the effective date of coverage or because the contractual definition of the condition is not met These examples show the need to provide education and to set expectations at enrollment Carriers should also be looking at the contractual definitions to see where revisions might be needed to reduce claim denials

Heather: We typically see three key reasons for claims being denied: the condition was not a covered critical illness, pre-ex exclusion, and the insured had already received a benefit for claimed condition Specifically, when it comes to denial for the claim not being a covered condition, it’s often because the claim is for an early-stage illness

This played a large part in our decision to cover those early-stage and early identification benefits referenced above and is a large reason why Trustmark’s Critical Illness claim denial rate is 8%, compared to the industry’s denial rate of 32% (Critical Illness 2022 Research Report Milliman, 2022)

What percentage of employees do you find port their Critical Illness plans when they cease employment? Are there any tactics you have found helpful to increasing porting rates?

Bryan: Portability rates remain extremely low in the single digits. Tactics to increase port rates include: proactive port communications on behalf of the employer, holding the same rates paid under the group plan, and maintaining portability well beyond when the group master policy terminates.

Heather: The number of employees that port their policy can vary drastically between groups, but there are several ways where we believe there is opportunity to improve that number The first is to maintain a relationship with the employee throughout the life of their policy At times there can be a “set it and forget it” approach to employees once they’ve enrolled, but maintaining ongoing communication and education about their policy, helps to consistently reinforce the value of their coverage Additionally, being responsive with communication with an employee when they do leave employment pays dividends as well And, finally, we are seeing a growing number of clients make use of ACH payment, which makes it easy to port the policy since they don’t have to transition to a new form of payment when they leave their employer.

How can we make the Critical Illness claims process easier for the member?

Bryan: It should come as no surprise that there is a race to automate the Critical Illness claims process and significantly reduce turnaround times and effort needed by members to submit a claim Transparency and improved digital self-service tools that clearly articulate the claims status and any missing information is what members request most frequently Automated claimant communications that send messages by text or email as soon as claims are submitted, status changes, payments issued or simply for missing information will also dramatically improve the claims process for members.

Sarah: In addition to having an engaging enrollment strategy to provide needed education, the best thing that can be done for members is to have an integrated and digital claims experience People operate most efficiently with digital tools, and it reduces the time to payment Also, by integrated, we mean adjudicating and paying claims based on information that may have been submitted with other lines of business With that information, it creates a seamless experience for members for us to just pay the claim and send them a notice to explain it Medical integration is critical here Partnering with vendors like Benefits Science Technology, a Multiplan Company, to receive medical information that could be used to initiate and pay a claim for people when the employer opts into this service – removes a lot of the claims burden from members.

We can make the claims process easier for the member by:

Providing multiple channels for submitting a claim (phone, email, online, etc.) Making sure forms are easy to read and understand. Carriers should offer to reach out to providers for any needed medical records and cover any document costs.

Communicating with the claimant throughout the process from submission to payment via their preferred communication channel (phone, email, text). I think user experience testing and claimant surveys are critical sources of feedback that should be used to identify areas for improvement in the process and something we do regularly

DirectorProduct, Marketing and Strategy Reliance

In addition to the basics above, innovations aimed at identifying claims the member forgot to file or did not realize they were eligible for are also creating a better claims experience Claims integration and use of AI technology fall into this bucket and will be an opportunity for carriers to differentiate now and in the coming years

Heather: I believe we can make the claims process easier by improving the way we cover critical illnesses: allowing for pathological diagnosis rather than requiring clinical diagnosis and allowing payments for less severe illnesses that often get denied Looking more at the nuts and bolts of claims filing, there aren’t many surprises on how to improve It largely comes down to improving technology with things like: online and mobile claims tools, text message updates and claims auto-adjudication to expedite the process and the communication surrounding claims

Thank you to our experts who provided feedback on the state of the Critical Illness Insurance market this month!

It is said that a doctor named Marius Barnard created Critical Illness insurance Dr Barnard was a heart surgeon who was part of the team that performed the first human-to-human heart transplant in South Africa in 1967 Dr Barnard recognized that his patients were in many cases, unable to return to work in full capacity after a chronic health event They felt the lingering effects of their illness: surgeries, medication, and recovery, which had an impact on their ability to earn an income So, in 1983, with a South African insurance company called Crusader Life, Dr Marius Barnard introduced critical illness insurance to the market.

Dr. Barnard’s creation came to the U.S. in 1997 and as of 2021, Gen Re’s U.S. Critical Illness Insurance Market Survey, estimates that there are 5.6M policies and $1.7B of premium in-force, helping countless Americans remain financially stable after experiencing a critical health event.

Heather Scott, Senior Director of Product and Innovation, Trustmark Voluntary Benefitsin her role, she is responsible for managing Trustmark’s health products Her voluntary benefits industry experience includes product development, product management and integrating products into benefit administration systems

Matthew Ennis, Director-Product, Marketing & Strategy Reliance Matrix - Matt is a customer focused product leader hyper-focused on the employee experience and the customer value proposition He takes a data driven, customer feedback approach to product development and management Matt has been with Reliance Matrix for 3 years but has a long history in the employee benefits industry, spending 16 years at another carrier in various roles including underwriting, operations management, marketing, enrollment strategy and product development.

Sarah Oliver, VP, Head of Voluntary Product, Prudential Financial, Inc. - where she is responsible for voluntary product development, enrollment and best in class technology to meet the needs of clients, including large and medium-sized companies, banks and associations. Sarah joined Prudential in September 2022, focusing on all aspects of voluntary product and business strategy, including developing the long-term product, enrollment and technology vision, new product development and in-force management

Bryan Burke, AVP Product-Voluntary Benefits, Sun Life- for the past 21 years he has worked for Sun Life in several product strategy and operational roles In his current role, Bryan is responsible for Sun Life’s voluntary strategy, product development, market and competitive intelligence and voluntary claims administration Bryan participates in several industry committees and is currently a Member of the LIMRA Workplace Benefits Advisory Council