Million-Dollar Health Claims Spike as Employers Struggle with Soaring Costs

Million-dollar medical claims are becoming more common and more severe, according to Sun Life’s latest annual report on high-cost health claims. The report highlights a 29% year-over-year increase and a staggering 61% rise over the past four years in catastrophic medical events. Cancer remains the leading contributor to these claims, accounting for $1.2 billion across roughly 5,000 cases in 2024—three times more than cardiovascular conditions, the next highest category.

Sun Life’s analysis found that nearly 90% of self-funded employers experienced at least one stop-loss claim between 2020 and 2023, with the number of claims exceeding $3 million also climbing significantly. The report identified 47 members with claims over $3 million in 2024, including 10 surpassing $5 million and a record-setting $12.7 million single claim.

Driving this upward trend are factors such as rapidly rising hospital costs, climbing pharmaceutical prices, and the lingering economic effects of the COVID-19 pandemic. While COVID has now dropped from the current year’s top 20 conditions list, it still influences long-term data and employer claims experience.

For employers managing self-funded health plans, the takeaway is clear: catastrophic claims are no longer outliers. Strategic planning, including selecting appropriate stop-loss coverage and deductible levels, is more essential than ever to ensure financial protection and the viability of employee health benefit programs.