Voya has bad news for employers with fully insured health plans that want to avoid big cost increases by shifting to self-insured plans: Rates for stop-loss insurance will also go up. A lot.
Stop-loss insurance can protect sponsors of self-insured plans against catastrophic losses.
Voya has been one of the major players in the stop-loss market.
Heather Lavallee, the chief executive officer of the New York-based company, and other Voya executives told securities analysts Wednesday that the company is continuing to fight a surge in claims that began a year ago by taking a tough approach to pricing.
“We saw another quarter of positive claims development,” Lavallee said. “We remain focused on improving margins.”
Lavallee said the company expects to see medical claim cost increases stay high and is now building the high claim cost increases into stop-loss prices.
“We’re continuing to focus on the discipline of margin improvement over any type of premium growth,” Lavallee said.
Jay Kaduson said he thinks Voya will still have opportunities to win new stop-loss accounts.
“You’re seeing more and more companies on the smaller end of the market, thinking about with the rising cost of health insurance, self-insuring,’ Kaduson said. “This marketplace will expand.”
The executives talked to the analysts during a conference call Voya held to go over earnings for the second quarter, which ended June 30. Voya streamed the call live and posted a recording on its website.
The backdrop: The Segal Group found signs that 2025 stop-loss price increases, which were set in 2024, may be slightly lower than the 2024 increases.
But many big medical insurance and stop-loss providers have reported seeing an overall surge in claim costs that started in mid-2024.
Health coverage providers are facing fierce resistance from physicians, hospitals, lawmakers and regulators to some common strategies for controlling costs, such as efforts to review proposals for care before the care happens and efforts to work with relatively small networks of providers who have agreed to accept heavily discounted rates in exchange for access to a large number of patients.
One hint at what group health coverage prices might look like in 2026 is emerging in state insurance department and state public health insurance exchange reports on preliminary small-group rate filings for next year.
A recent sampling of small-group rate announcements in six states showed that average increases for fully insured coverage in those states ranged from 9.9% up to 20.8%.