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**kylsq0Ln** · 10-15-2007, 08:38 PM

Any idea how huge, roughly? So we can put a nummber on it?

Hmmm... for an average claimant base, the costs (Med & Rx) run about $700 per person per month. There are a lot of variable factors in there (demographics is not the least important)....

But for you average 'high claimant', for which companies get stop-loss (aka reinsurance) to protect themselves from, are those whose annual claims top $225,000 a year. If you have enough of those, your bottom line gets annihilated. The problem is that with the medical histories that we'd be talking about, no company is going to give a quote on the stop-loss. So the annuity is going to have to be significant enough to absorb those high-end costs.

So the majority of the claims and cost are going to come from the older population, not to mention the extreme end of the costs. Let's throw a number in of 200 'high claim' enrollees. Since there are 350 of 5000 on 'disability' per Ditka, I think that the 200 might be pretty close.

200 x $225,000 = $45 million. This year.

Add in the basic costs:
$700 per enrollee per month.
5000 x $700 x 12. $42 million. This year.

Even if I'm off on the first number by 50%, we're talking between $60 and $90 million PER YEAR to provide coverage. And I think the $700 per enrollee per month to be VERY low end, considering the risk factors and issues that have to be out there.

So, to sum up - Add a team's payroll to the bottom line for the league (as if there were 33 teams instead of 32). That's probably what we're talking about, in a general sense, but we'd also have to have a large fund to back up any surge in large claimants. How many guys do you think might hit multi-million dollar claims in one year? Would the plan have a cap to limit the max (thus making it more cost effective, yet risking the outrage when some guy hits his limit and is then uncovered)?

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Further calculation:
Assuming my numbers above are accurate, in order to establish an annuity that pays out enough to cover the annual costs without tapping the equity - assuming a 6% rate of return on investment, you'd need a total base of $1.5 Billion.

Hey, sell the Cowboys. That oughta about cover it...

10-15-2007, 08:38 PM	#30
kylsq0Ln Join Date Oct 2005 Posts 502 Senior Member	Any idea how huge, roughly? So we can put a nummber on it? Hmmm... for an average claimant base, the costs (Med & Rx) run about $700 per person per month. There are a lot of variable factors in there (demographics is not the least important).... But for you average 'high claimant', for which companies get stop-loss (aka reinsurance) to protect themselves from, are those whose annual claims top $225,000 a year. If you have enough of those, your bottom line gets annihilated. The problem is that with the medical histories that we'd be talking about, no company is going to give a quote on the stop-loss. So the annuity is going to have to be significant enough to absorb those high-end costs. So the majority of the claims and cost are going to come from the older population, not to mention the extreme end of the costs. Let's throw a number in of 200 'high claim' enrollees. Since there are 350 of 5000 on 'disability' per Ditka, I think that the 200 might be pretty close. 200 x $225,000 = $45 million. This year. Add in the basic costs: $700 per enrollee per month. 5000 x $700 x 12. $42 million. This year. Even if I'm off on the first number by 50%, we're talking between $60 and $90 million PER YEAR to provide coverage. And I think the $700 per enrollee per month to be VERY low end, considering the risk factors and issues that have to be out there. So, to sum up - Add a team's payroll to the bottom line for the league (as if there were 33 teams instead of 32). That's probably what we're talking about, in a general sense, but we'd also have to have a large fund to back up any surge in large claimants. How many guys do you think might hit multi-million dollar claims in one year? Would the plan have a cap to limit the max (thus making it more cost effective, yet risking the outrage when some guy hits his limit and is then uncovered)? --------------------- Further calculation: Assuming my numbers above are accurate, in order to establish an annuity that pays out enough to cover the annual costs without tapping the equity - assuming a 6% rate of return on investment, you'd need a total base of $1.5 Billion. Hey, sell the Cowboys. That oughta about cover it...
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