Expensive specialty drugs and ordinary severe claims are pushing the cost of protecting a self-funded employer health plan against catastrophic risk higher.
For self-funded plans that kept their deductibles the same, the average premium for medical stop-loss insurance has increased 11.5% this year, down from 13.4% in 2023, according to the Segal Group, a New York-based benefits and compensation consulting firm.
Beccause employers often hold down stop-loss increases by moving to higher deductibles, the amount employers really paid for stop-loss coverage, after taking the deductible changes into account, increased 9.4% this year, up from 8.4% last year.
Segal analysts based the 2024 figures on records for 234 health plans with an average of 2,300 participants per plan.
A stop-loss policy can pay benefits when the cost for an entire plan or the cost for a specific participant reaches a minimum level.
Price increases have been harder on stop-loss users that have tried to save money by accepting higher specific participant deductibles. For plans that cut costs by setting the annual deductible at $500,000 per plan participant, the median premiums increased 29%, to $40 per participant per month.
For plans with a specific deductible of $200,000, the median premium increased only 7.1%, to $93 per participant per month.