Relentless Health Value EP478: Stop-Loss Coverage, Part 1: How It Goes Right, and How It Can Go Horribly Wrong, With Andreas Mang and Jon Camire
May 29, 2025
In this engaging discussion, Andreas Mang, Senior Managing Director at Blackstone and CEO of Equity Healthcare, teams up with Jon Camire to shed light on stop-loss coverage in healthcare. They define what stop-loss insurance is and how it shields self-insured employers from hefty financial setbacks. The duo emphasizes the importance of expert consultants and dives into individual versus aggregate policies, exploring crucial strategies for managing high-cost claimants. A must-listen for those navigating the intricate world of self-insurance!
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Stop-Loss Protects Against Catastrophe
- Stop loss is a type of reinsurance protecting self-insured employers from catastrophic healthcare costs exceeding a set deductible.
- The deductible varies by company size, balancing risk tolerance and financial capacity for claims.
Aggregate Stop-Loss Caps Total Risk
- Aggregate stop loss covers total claims exceeding about 125% of expected costs, capping overall plan risk for the year.
- It's common for smaller employers but generally dropped by larger employers who can absorb fluctuations more easily.
Laser Claims Exclude Known Risks
- A laser claim is when a stop-loss carrier identifies a known high-cost risk and excludes it by assigning a higher deductible.
- This removes the claim from pooled risk, affecting how financial responsibility is shared.