QBE North America has published its 2025 Accident & Health Market Report, highlighting the cost pressures and emerging risks impacting self-funded healthcare plans in the United States.
Drawing on proprietary claims data and industry research, the report identifies cancer, circulatory disease, and preterm births as major contributors to high-cost healthcare cases.
The report notes continued growth in the adoption of group medical stop loss captives. A five-year review of the five largest fronted-group captive programs supported by QBE indicates favorable performance.
In 2024, QBE expanded its stop loss coverage to include specialized groups such as Taft-Hartley plans, multi-employer plans, and union-based groups.
Claims data reveal rising frequency and severity in cases involving solid organ and stem cell/bone marrow transplants. QBE expects this trend to persist as the demand for organs continues to exceed available supply. A fully insured organ transplant carve-out policy is suggested as a way for self-funded employers to mitigate related risks.
Tara Krauss (pictured above), president of accident and health at QBE North America, said that the increasing complexity and expense of medical treatments are making it more challenging for employers to manage fluctuations in their self-funded plans.
"Our goal is to equip brokers, administrators and employers with actionable insights to navigate these changes with confidence,” Krauss said.
Post-COVID data show that circulatory claims have increased by nearly 60%, while neoplasms remain the leading source of excess loss claims across all deductible levels. In 2024, neoplasm-related claims rose by 15% across all effective groups in QBE’s portfolio.
The preterm birth rate in 2024 held steady at 10.4%, but claims associated with preterm infants accounted for 13.1% of all claims over $1 million. Some of these claims surpassed $2 million, largely due to hospital expenses related to congenital anomalies.
The specialty drug market, including biologics, gene therapies, and cancer treatments, is projected to reach nearly $966 billion globally by 2030. This growth is being driven by increased reimbursement for therapies across both medical and pharmacy benefits.
QBE’s report notes that 2024 saw a surge in specialty drug approvals, particularly for high-cost treatments targeting cancer and rare diseases, and includes strategies for managing these rising pharmaceutical expenses.
The past year also marked a record in cell and gene therapy approvals, with seven new treatments gaining approval, expanding the number of FDA-approved therapies to more than 20 across over eight disease categories.
Despite this growth, QBE noted that gene therapy claims remain rare in its portfolio, with only three such claims reported between 2022 and 2024 across nearly 2 million covered lives.
Broader societal health issues are also contributing to increased healthcare costs. According to data from the CDC, 90% of the United States’ $4.5 trillion in annual healthcare expenditures are linked to chronic diseases.
Obesity affects 42% of US adults and alone accounts for nearly $173 billion in direct healthcare spending annually. QBE’s report underscores how factors such as widespread antibiotic use, reliance on processed foods, and growing dependence on high-cost medications are driving excess claim volume and severity.
"As the healthcare landscape continues to shift, stop loss insurance remains a critical tool for employers looking to manage risk and protect their plan assets," Krauss said.
What are your thoughts on this story? Please feel free to share your comments below.
