Excerpt: Medical stop loss captives are quickly becoming the go-to solution for employers looking to take control of their healthcare spend. Funding medical stop loss in a captive allows employers who self-fund their benefit plan to add a layer of protection from excessively high individual or aggregate health claims.
One of the key drivers in the growth of this space has been the rising costs associated with providing healthcare coverage.
According to the Centers for Medicare & Medicaid Services’ National Health Expenditure Projections 2017–2026, US national health expenditure is expected to increase by 5.3 percent in 2018. The government agency says drivers of this include the increased prices of healthcare goods and services.
Joe Parrilli, vice president at captive insurance adviser Captive Resources, says a number of factors contribute to the increases in the cost of health insurance, including the cost of drugs, the cost of care, and an aging workforce—all of which, he says, are driving growth in the medical stop loss market.
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