National Underwriter looks at the effect that removing maximum benefits may have on employers and insurance markets. Here is an excerpt:
Alison Saifer, an actuary, said in June during a stop-loss session organized by the Society of Actuaries (SOA), Schaumburg, Ill., that she has seen estimates indicating that the incidence of $1 million claims increased to about seven per 100,000 lives in 2008, from fewer than two per 100,000 lives per year in 2002.
Milliman Inc., Seattle, reported in 2008 that hospitals were billing an average of more than $750,000 for 7 of 16 types of transplants. Total national expenditures on all of the procedures combined amounted to an average of less $20 per plan enrollee per quarter – but health plan profits often are less than $10 per enrollee per quarter.
Before the Affordable Care Act came along, many large employers offered coverage without maximums, and stop-loss companies were eager to serve those employers, Fleet says.
The stop-loss market has been soft since the early 2000s, and the Affordable Care Act could help it harden, Fleet says. “Employers that don’t traditionally buy stop-loss coverage may buy it now,” Fleet says.