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Research Outline

Prepared for Derek F. | Delivered October 5, 2020

Stop-loss and catastrophic care insurance providers

Goals

Identify the list of insurance providers that offers stop-loss and catastrophic care insurance nationwide. Further research is required to understand the process of availing the insurance, eligibility criteria, the minimum number of individuals required to cover the insurance, cost per person, differences in coverage for high and low health risk individuals, deductibles, and coverage plan's variability in different states.

deep comparison of stop loss vs. catastrophic care insurance.
some semblance of cost per person covered
challenges for partnering on this nationwide
best options for partners nationwide

Early Findings

- Stop-Loss Insurance:

  • Employers who self-fund their employees-benefit plans, but do not want to take 100% liability, often purchase excess insurance that is known as Stop-loss insurance. Under a stop-loss policy, the insurance company takes the liability of employee's claims after they have reached a certain limit (or deductible).
    •  Two types of Stop-loss Insurance Policy are: 
    • 1. Specific Stop-loss: excess risk coverage that protects the employer against a high claim on any one of the employee's individual.
    • 2. Aggregate Stop-loss: the plan provides a ceiling on the dollar amount of eligible expenses that an employer would bear during the contract period.
  • Challenges involved in Stop-loss insurance:
      •  An ineligible claim under a group health plan: the stop-loss insurance carrier can deny reimbursement for a benefit or service that is not covered under the group health plan.
      •  Ineligible participant under a group health plan: the stop-loss insurance carrier can deny reimbursement for individuals not in an eligible class of company's employees (such as dependents) or individuals otherwise ineligible due to certain circumstances.
      •  Late enrollment: An individual added to the group health insurance plan after the application window (late enrollee). The stop-loss insurance carrier may have the right to exclude coverage under late enrollment.
      •  Special leaves of absence: in a case of special leave of absence, an employer might permit its employee to continue non-COBRA participation in the group health plan, which may otherwise deem them ineligible for availing stop-loss insurance.
      •  Missed acquisition – in case an employer acquires another company, and enrolls the acquired employees/dependents in employer's group health plan, but fails to notify the stop-loss carrier.

- Catastrophic health insurance:

  • A health plan that offers coverage in times of emergencies as well as preventive care. Catastrophic health insurance covers accidents, unexpected injuries, and sudden emergency illnesses.
  • The plan comes with low monthly premiums and a high deductible. 
  • Catastrophic health coverage is available for (i) individuals under 30 years, and (ii) individuals of any age who are eligible due to financial hardship (such as homelessness, bankruptcy, domestic violence, death of a close relative, eviction, home foreclosure, fire or a natural- or human-caused disaster).
  • The individual pays for emergency medical care until they meet the deductible.

- Importance of Stop-loss Insurance:

Due to the high volume of scientific research and the growth of pharmaceutical companies, new and costly cures are emerging for rare diseases. According to the National Institutes of Health, rare diseases affect 30 million Americans every day. The cures for rare diseases are not cheap, and estimates show that a cure for gene therapy (in this case for spinal muscular atrophy) costs around US$2.125 million per dose. Hence, any employee, or one of their covered dependents, with a rare disease, could become an expensive medical claimant in a flash. This could be due to one of the four reasons: 
(i) covered member got diagnosed with a high-cost medical condition.
(ii) recently, a new drug approved to treat an employee of a medical condition.
(iii) prices could increase for an employee's existing treatment protocol.
(iv) dependents of co-dependents could have a rare disease - expensive to treat.

- Insurance Companies:

1. HM Insurance group 
2. Cigna Health and Life Insurance Company (Cigna Stop-Loss Insurance Plan) 
3. Always Health Partners