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According to the 2023 Aegis Risk Medical Stop Loss Premium Survey, stop-loss premiums increased by 16% from 2021 to 2023. Self-funded health plans purchase stop-loss insurance to help protect themselves from large, unpredictable health claims. These coverage deductibles are often tied to the employers’ population size and the plan provider’s risk tolerance.
The survey found that 25% of respondents reported a catastrophic claim over $1 million over the last two policy years. Seven percent had claims which exceeded $2 million. Nearly half of respondents reported that none of their catastrophic claims exceeded $500,000. Due to rising costs, some employers are investigating the following risk management strategies:
- Captive arrangements (15%)
- Specialty prescription drug and gene therapy carve-outs (18%)
- Direct provider contracting (6%)
- Reference-based pricing (3%)
And 63% are maintaining their status quo.
Employer Takeaway
Stop loss insurance can help employers reduce their financial exposures to catastrophic claims. The cost of this coverage can increase annually. Rising claims can make obtaining competitive rates more difficult. Employers should continue to monitor health care trends, spending and utilization. Download the bulletin for more details.
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