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Time for change in critical illness insurance – creating alignment between medicine and insurance

By: Dr. Howard Fixler, Medical Director, Trustmark Voluntary Benefit Solutions

Dr. Fixler recently hosted a webinar through EBN on why doctors and insurers should speak the same language. View the webinar on demand or read on to learn about why it’s time for change in the critical illness insurance market.

Between 1960 and 2015, the average life expectancy of an American has increased from 69.77 years to 78.74 years.1 That’s nearly a 10-year increase in the past 55 years! Consider all the medical advancements across all kinds of conditions and treatments this represents. Further, consider that there are billions and billions of dollars poured into medical research annually. Clearly, the ways we treat patients and the way we view illness are constantly changing, but the question is: are insurance policies keeping up with this rapid pace of change?

The insurance industry, by its nature, requires very specific guidelines for when and how carriers are able to pay benefits to policyholders. And industry professionals depend on feedback from medical practitioners to determine when and if a policyholder is eligible for benefits. But, if the language used for the policy doesn’t match the way the doctor treats the patient, it’s ultimately the policyholder who suffers and often at an already difficult time. 

Taking a look at how we treat critical illness

Critical illness insurance is, perhaps, the most relevant area to examine and determine if policy language matches medical practices. With other insurance policies such as accident, disability or life, there is a bit more of a definitive diagnosis to be made whereas critical illness encompasses a bit more grey area. 

When creating our new critical illness policy, Critical HealthEvents, we discovered that 63 percent of critical illness claim denials are due to conditions not being covered or definitions not being met.2 This suggests that there is a fairly large gulf between how a policy describes illness and how a doctor diagnoses that illness. As we dug in and looked closer at this issue, our concerns were confirmed and we realized there were all kinds of disconnects between how policies look at illness and how doctors treat illness in the field. In our unique product design, we chose to address the issues head on and help change the way the industry takes care of customers. Here are a few examples:  
  • Heart attack – To receive a benefit for a heart attack, many critical illness policies require that the heart attack be confirmed by the presence of enzymes in a lab test. Doctors today, however, are more focused on preserving muscle tissue in the heart and treating the condition as soon as possible. As such, lab tests are not always performed to confirm what a doctor may already know: that the patient has had a heart attack. This, however, is a major disconnect between the medical world and the insurance world, because a policyholder could be denied benefits without the lab test. So in addition to updating our definitions, we went a step further, providing a benefit for an earlier stage of coronary disease, such as angina, may go a long way in preventing a heart attack from ever happening!
  • Stroke – Medical professionals, as in the case of heart attacks, are focused more on preserving brain tissue and returning to pre-stroke function than simply supportive care for the stroke patient. Thus, policies which use presence of long term neurologic deficits as a basis for providing benefits place the policyholder who undergoes modern clot busting treatment with a successful outcome at a financial disadvantage. By medical standards, that person may have had a stroke, but because the policy language doesn’t match the way the doctor diagnoses and treats the condition, the claim could be denied. Further, policies like ours that provide a benefit for TIA, a precursor of actual stroke, may help the policyholder avoid the more devastating financial, emotional and physical impact of a stroke.
  • Cancer – There is no such thing as a “good” cancer, but some are considered “worse” than others. All types of cancers, including benign tumors and skin cancers, can require treatment and pose a threat to patients. Doctors consider the cancer from the standpoint of the treatability of the cancer, the type of cancer and the level of danger it poses to a patient. Typical critical illness insurance, however, has much more rigid guidelines and the financial support a policyholder receives may not correspond to the severity of the situation as determined by a doctor and experienced by the insured. Additionally, a policy like ours which provides benefits for early and later stages of the same cancer may help stop or slow the advancement of the cancer and will be there for the policyholder if and when needed.

How we can do better

It’s unfortunate that an insurance company can’t pay benefits for every illness, injury or condition. But, the insurance industry can do a better job of ensuring that we are as closely aligned as possible to the latest in medicine to help pay more claims. While I’m using the new way Trustmark is looking at Critical Illness as an illustrative example, we can apply this way of thinking across the board in insurance. In so doing, we can ensure that we are providing relevant support and not getting too focused on technicalities based on outdated policy language or looking to cover outdated approaches to medicine. Taking a closer look at the way we approach policy language can help bridge this gap and provide better support for policyholders, because at the end of the day, caring about them is what we’re all about. 

Read part two of this series to see how an aligned approach to medicine and insurance can improve outcomes for policyholders.

1 World Bank. Sep, 2017.
2 Gen Re. U.S. Critical Illness Insurance Market Survey. 2013/2014.

Posted on December 14, 2017 in Critical Illness

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