A Message from the CEO
 by Charles Crispin, CEO, Evergreen Re

The Catastrophic Risk Factor & Health Care Reform

Providing quality and affordable healthcare for all Americans is the goal of President Obama’s healthcare reform and what most of us believe is the right thing to do. One of the concerns among many health plans and insurers, however, is the impact this quest will have on their ability to provide coverage to a large segment of the population who has been managing their health poorly, or not at all.

On May 11, 2009, during the address on “Reforming America’s Health Care System”, the President acknowledged “too many Americans are skipping that checkup they know they should get or going without that prescription that would make them feel better, or finding some other way to scrimp and save on their health care expenses.”

Add to that the more than 47 million Americans without any health insurance at all, and the prognosis of catastrophic risk for health plans will grow significantly as they are challenged to take on more and more folks who have not taken care of their medical problems on a timely basis.

Some of the early healthcare reform initiatives provide positive steps to addressing this potential problem in the hope of preventing more long term problems that will be even more expensive to treat down the road. Extending healthcare to millions of kids of working families who lack coverage and providing COBRA subsidy to make care affordable for seven million Americans who lose their jobs, are two programs designed to maintain health among these groups.

That being said, the most current data -- which does not take into account the uninsured -- indicates that by next year there is expected to be from 2.4 to 3.6 claims exceeding $1 million paid, per 100K members, more than double the 2005 level.

Modernizing the health care system and investing in prevention are key components to the President’s plan. In the meantime, health plans need to make sure they are protected against what could be an avalanche of Americans with chronic diseases which will require expensive treatments and drugs; and of course, ever-increasing frequency of million plus claims. An effective Specialty Drug program and Reinsurance that protects against today’s medical and pharmaceutical environment are two critically important strategies health plans have to protect against these monster claims, and Evergreen Re and Evergreen Rx have developed true leadership in each of these categories.