A new report highlights a sharp rise in both the size and frequency of medical stop loss claims across US employer-sponsored health plans, underscoring the growing difficulty of providing affordable healthcare benefits in an environment of escalating claims.
Tokio Marine HCC – A&H Group examined claims and loss ratio data to evaluate how large claims have evolved over time. According to the company’s report, stop loss claims exceeding $2 million have risen 1,251% since January 2014, when the Affordable Care Act eliminated caps on health benefit payments.
This category of claims, once considered rare, has become more common, signaling a shift in risk exposure.
Tokio Marine HCC also found that large claim frequency rose across four major stop loss reimbursement thresholds in the past year. Claims above $200,000 increased by 46 percentage points, those above $500,000 by 75 points, above $1 million by 112 points, and above $2 million by 247 points.
Medical conditions driving the majority of costs remained stable. Neoplasms, including cancers, continued to lead stop loss claim categories, followed by cardiovascular, musculoskeletal, and digestive diseases.
Combined, cancers and cardiovascular conditions accounted for more than 48% of total stop loss claim costs in 2024, up from 44% in 2021.
The report also noted a rise in other diagnoses contributing to large claims. These include nervous system disorders, endocrine and metabolic conditions, and infectious or parasitic diseases. While not yet among the top claim categories, their emergence signals a broader spectrum of risk for stop loss carriers.
Commenting on the report, Jay Ritchie (pictured above), president and CEO of Tokio Marine HCC – A&H Group, linked the market change in part to hospitals adjusting financially post-pandemic.
“The rising frequency of claims, particularly as hospitals seek to recover financially from the pandemic, have been contributing to a hardening market. Insurers are responding with higher rates and stricter terms all while the industry adapts to new AI capabilities,” he said.
Similar trends were observed in the wider stop loss market. A report from QBE in 2024 noted that the rate of claims exceeding $200,000 per 10,000 insureds rose 39% from 2022. This surge was primarily linked to cancer-related treatments, where the cost of specialty medications has added significant pressure to reimbursement levels.
Similarly, Sun Life reported that cardiovascular disease has now become the second most frequent stop loss claim, behind neoplasms. Drawing from a data pool covering 60,000 claims across 6 million insured individuals, the report underscored the increasing weight of chronic and high-acuity conditions in driving medical stop loss costs.
What are your thoughts on this story? Please feel free to share your comments below.
