Stop Loss paid claims analysis 2024

As health care costs continue to rise, we review our Stop Loss Insurance claims every year to better inform intermediaries and employers as they evaluate stop loss coverage — and point solutions and cost containment programs that can help protect self-funded employers from high-dollar medical claims.

Based on our 2023 claim incidence rates, we’ve identified some key cost drivers and trends to help employers mitigate risk and set the proper medical plan funding. Plus, find out what we’re keeping a close eye on in the Stop Loss market.

Safeguard against unexpected health care costs

Medical and prescription costs can add up quickly for just one employee. This table illustrates what catastrophic claims can look like — each one represents the total claim cost for one person with one specific condition for just one year:

Our Stop Loss Insurance covers employers with a total of two million employees. The data included reflects policies effective January 2, 2022 — with coverage through January 1, 2023, and claims completed through April 30, 2024.

Here are three notable trends we are seeing:

Frequency of diagnosis per 10,000 employees

According to our claims experience, this is how often the top 10 claims diagnoses can be found within a population:

Using the information in the table above, if an employer has a population of 3,000 employees, they might see roughly $3.6 million in claims:

Changes in incidence

Both claim frequency (23.8 — up from 23.3) and average claim size ($508,000 — up from $475,000) increased from 2022. Cancer claims continue to make up the largest number of claims submitted and the largest portion of total claims spend. We also saw a significant increase in severity for perinatal claims in 2023, compared to the prior year. Lastly, we expect the average claim cost to increase in the coming years, in line with medical trend.

In addition, here are three other trends we noticed:

What we’re watching: premature births and perinatal conditions

Premature births and related perinatal conditions have consistently made up a significant portion of our top 10 claims each year. In 2022, however, we saw a decrease in the number of premature birth claims, with only two appearing in our top 10, compared to four in 2021 and six in 2020.

In 2023, the average claim size for premature infants returned to pre-pandemic levels:

• Although the overall frequency of perinatal claims returned to expected levels, the number of high-severity claims ($1M+ and $2M+) increased substantially in 2023.
• Length of care in 2023 was two to three months longer than 2020-2022.
• Length of care for claims over $2M is on average 100 days longer than claims under $2M and we expect severity to continue to be heightened.

Want to learn more about our flexible Stop Loss Insurance? Contact your Voya representative today — and view this brochure for our full Stop Loss paid claims paid analysis:

Stop Loss Paid Claims Analysis 2024 Brochure

Text representation of article graphics (for screen reader accessibility):

Graphic 1: Notable trends

• The average of the top 10 claims for 2023 increased by 42% from 2022, driven by a $11.6M injury and poisoning claim.
• In 2023, we received six claims over $5M in TPA allowed charges, compared to two claims in 2022.
• Injury, poisoning and congenital anomalies represent six of the top 10 claims in 2023, compared to four of the top 10 in the prior year.

Graphic 2: Roughly $3.6 million in claims

• 23.8 claims per 10,000 employees = 7.1 claims per 3,000 employees
• 7.1 x $508,526 average cost = $3,610,535 estimated claims

Graphic 3: Notable trends

• Individuals exceeding Stop Loss deductibles from $100,000 to $750,000 have increased at an annualized rate ranging from 5%-13% from 2020-2023.
• Annual growth in incidence at these deductibles from 2020-2023 has changed from 2019-2022. The biggest change is a broader range of growth rates, similar to patterns we've seen historically.
• We expect claim incidence to continue to increase annually, making Stop Loss coverage essential to protecting self-funded employers from catastrophic medical claims.