Use Stop Loss to Manage Risk – But Don’t Forget Clinical Oversight

As high-cost claims continue to trend upward, your approach to managing health plan risk is becoming increasingly important. Given the severity and frequency of catastrophic claims, employers are strategically using stop-loss insurance to help limit their exposure. Those that currently purchase stop-loss are making sure their policies include rate caps and limit lasering at renewal while those that haven’t purchased it in the past are reconsidering. In our latest survey of employer-sponsored health plans, the prevalence of stop loss among self-funded employers with 20,000 or more employees – those least likely to purchase stop loss -- increased from 36% to 39%, according to Mercer’s National Healthcare Survey. These very large employers generally set a high individual stop loss deductible: the median amount is $750,000, compared to $250,000 among employers with 500 or more employees.

But stop-loss coverage is only one piece of a broader strategy that is needed to manage health plan risk. As you consider your plan design options for 2020, you’ll want to review your claims data and see which conditions are costing you the most. Understanding the impact of high-cost claims could help you focus your cost management strategy where it will have the greatest benefit – helping to prevent or reduce the severity of serious health issues. Consider implementing or enhancing programs that provide care management and clinical oversight to help reduce wasteful spending and ensure your member is receiving the right care, at the right place, at the right time. Appropriate oversight of large claims is a valuable investment that can produce measurable results.

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