Stop-loss coverage is purchased by self-insured employers looking for coverage from catastrophic medical and pharmacy claims. Based on the most recent data available from S&P Global Intelligence, the stop-loss market stands at approximately $24 billion in premium.
In March, Milliman sent survey participation requests to a wide range of employer stop-loss market participants. Of those receiving a request, 25 provided survey responses. This survey is an update to Milliman’s prior employee stop-loss market survey, which was published in May 2019.
In this paper, Milliman’s Rob Bachler, Nick Johnson, Brian Reed, and Mike Hamachek summarize the findings from the most recent stop-loss survey.
Over the past decade, submitted financial filings suggest
the employer stop-loss (ESL) market has nearly tripled, growing from roughly $7
billion in premium in 2008 to over $21 billion in 2018. As this growth has
occurred, a significant share of it has accrued to health plans rather than
traditional ESL carriers. While there can be hurdles for a health plan to
overcome when trying to enter the ESL market or expand an existing stop-loss
block, the market can provide meaningful opportunities.
Since 2006, when health plans represented just over
one-third of the ESL marketplace, health plans have grown to represent nearly
60% of the market. A majority of this growth in that time period has been
concentrated in large, national health plans, whose market share has more than
doubled, from 16% to 33%.
The ESL market is different from the fully insured market
that comprises the majority of most health plans’ premiums. As such, it is
important that health plans wishing to enter (or grow in) the market understand
the ramifications of the decision.
In this paper, Milliman’s Rob Bachler and RGA’s David Sipprell enumerate the considerations health plans should examine before diving into the ESL market.
Stop-loss coverage is purchased by self-insured employers
looking for coverage from catastrophic medical and pharmacy claims. Based on
the most recent data available from S&P Global Intelligence, the stop-loss
market stands at approximately $20 billion in premium.
In March 2019, Milliman sent survey participation requests
to approximately 30 employer stop-loss carriers, and 25 provided responses. The
survey asked questions about various topics, including:
- Portfolio characteristics, such as employer size
and types of coverage purchased
- Underwriting measures, such as persistency and
- Pricing measures, such as a carrier’s average
discretionary discount and target loss ratios
- Historical results, both loss ratio and growth
- Product terms offered
In this paper, Milliman’s Rob Bachler, Nick Johnson, and Mike Hamachek provide results of the survey.