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Observing changes in an unprecedented year

Challenges and opportunities for 2020 in Stop Loss Insurance

The year 2020 has raised many new questions and offered few concrete answers. However, as leaders in the Stop Loss market1, Voya Employee Benefits can share some of the insights we’ve gathered halfway through this most unusual year. Covid-19 (ICD-10-U07.1) has shown that knowing your client’s tolerance for risk, and how your plan documents reflect that, is crucial.

Listed below are the biggest risk inflators and deflators that have been influenced by Covid-19, according to our analysis conducted using the information available at this moment. Read on for insights and guidance as to what you, as a broker, can do in this unprecedented environment.

Risk Inflators

Complex Covid claims: The widely-covered story of the Seattle man who spent 62 days in the hospital and received an 181 page, $1.1 million bill upon release shows that charges quickly add up with Covid-19.

What you can do:  Help your clients understand their Covid-19 hospital claims. Check to see that they haven’t been over-charged and look for a secondary review of large claims to ensure they are not over-spending.

Delayed care due to the virus: The potential impact of delayed care due to the concentration on Covid-19 can lead to more severe claims for some conditions that went months without diagnosis and care. 

What you can do: Inform your clients that even if they had a few months of reduced claims, this is expected to change as claimants begin to receive care for delayed diagnoses which may carry a higher cost. Be aware of the ‘false positive’ scenario.

Patients that have been exposed to COVID-19 can show up with one or more of the following ICD 10 codes:

ICD 10 U07.1 COVID-19
ICD 10 J12.81 Pneumonia due to SARS-associated coronavirus
ICD 10 B97.29 Other coronavirus as the cause of disease classified elsewhere
ICD 10 B97.21 SARS-associated Coronavirus
B34.2 Coronavirus infection, unspecified

Expansion of hospital delivery system sites even as they experience revenue strain: Hospitals and medical professionals have used tents and other previously vacant spaces to expand their delivery system. At the same time, they’ve also experienced a drop in revenue, causing many communities to recognize the need to build out a different reserve structure.

What you can do: Be aware for some communities, there may be an imbalance in quality of care that is provided in the future even as some hospitals try to expand their reach and delivery capability to expand their revenue.

More people signing up for Medicaid and Medicare: As the economic situation worsened for many people, more signed up for Medicaid and Medicare, increasing the financial burden on healthcare providers to cover these patients at reimbursement rates subsidized by the commercial population.

What you can do: Continue to monitor duplicate charges and overcharging.  As hospitals continue to see strained revenue, the conditions for overcharging will be present. In addition, look for hospital stays that may appear to be a day – or two – longer than what would’ve occurred during the pre-Covid-19 environment.

Risk Deflators

Fewer organs available for transplants: With quarantine across the country due to Covid-19, there has been a significant reduction in vehicle accidents which leads to fewer organs available for transplant. 

What you can do: Inform your clients that there is currently a longer wait for organs due to fewer donations.

Turbulence in the home health care industry: The home health care industry may ultimately shrink in terms of raw number of agencies, but the overall size of the market is very likely to expand at a faster-than-anticipated pace.

What you can do: Know that as home health care is likely to rise, Voya is not expecting the 2020 experience to show that just yet.

Growth in telemedicine: Telemedicine and home health care are showing strong growth as patients consider options that keep them out of inpatient facilities. Home health care can come at a fraction of the cost in many situations.

What you can do: Review plan documents with your clients to learn if telemedicine is covered, and how the benefit plan incentivizes the members to utilize it.

Continued trends in high cost pharmaceuticals

Even as Covid-19 dominates medical news, advances in cell and gene therapy continue in the form of high cost pharmaceuticals. There have been 18 cellular and gene therapies approved in the U.S., as of July 24, 2020, leading the overall impact to be minor. However, more therapies will continue to be FDA-approved and released for a diverse array of diseases.

What you should know:

Most of the cell and gene therapies in the FDA clinical trial pipeline are for very rare afflictions, treating as few as one in a million people.  As of February 2020, there are 362 cell and gene therapies in various stages of clinical development. Although COVID-19 disrupted several of these trials, several companies are projecting a return to near-normal levels for clinical trials by the fourth quarter.  

With few drugs approved, in the short term, there is little competition to control prices. For example, Zolgensma can range from $1.7 million to $2.1 million, not including facility charges for delivery and administration. Valrox (which will be called Roctavian after its release) was developed for the treatment of Hemophilia A, and is expected to receive approval news from the FDA on August 21, 2020. The assumed impact of Valrox approval is 1 per 1,000,000 members receiving the treatment at a cost of between $2 million to $3 million for a single dose treatment. Almost half of patients currently treated with Hemlibra may be switched to Valrox. The estimated annual cost of Hemlibra is $1.5 million to $2.3 million, which requires repeated injections. However, it is unclear how long Valrox will stop bleeding of people with hemophilia A. The duration of the response is something Voya is watching.  

Clinical guidelines to qualify claimants who should or could be treated can be fairly narrow. Ensuring appropriate pre-authorization and pre-certification and aligning incentives should be monitored by you, the broker, and audited by Voya to provide feedback.

As more treatments enter the market as competitive replacements to other cell and gene therapies, prices may come down.

Many of these treatments are being billed as a “cure” but, given how recent the clinical trial was completed prior to release, there may not be data tracked over a long enough time horizon to support that. If efficacy wears off, the same person could be treated multiple times over their life span.   

What you can do:

Advise employers of the possible impact of these high cost pharmaceuticals and the importance of strengthening their Stop Loss insurance policy in anticipation. Voya is able to guide and advise employers through these new advances as our medical team keeps abreast of the latest FDA news and approvals.

How Voya can help you

As an industry leader, we believe that the best way to navigate these challenging times is through partnership, along with leveraging foresight and data. Our underwriting teams will be using a blend of windshield (looking ahead for a client) and rearview-mirror decision making (analyzing existing data) to provide competitive cost projections.  While first dollar claims experience has been down for some payers that does not always translate to lower paid claims for a Stop Loss carrier. We strive to deliver consistency in a client and broker’s total experience with Voya and encourage you to consider us for your next renewal.

Voya Employee Benefits is ready to support the challenges of our customers and brokers. 

Contact a Voya EB representative to find a solution that works for your clients. 

We are providing this content for informational purposes during the ever-changing and developing COVID-19 pandemic.  The information provided here is not intended to cover every situation or to apply generally to our business during normal times.  This content is subject to change as the situation warrants.   We reserve the right to modify, alter, rescind, extend or otherwise amend the information and actions presented here via subsequent versions or communications.  This is not legal advice, and you should not rely on or construe it as legal advice. 

Excess Risk (Stop Loss) Insurance products are issued by ReliaStar Life Insurance Company (Minneapolis, MN) and ReliaStar Life Insurance Company of New York (Woodbury, NY). Within the State of New York, only ReliaStar Life Insurance Company of New York is admitted, and its products issued. Both are members of the Voya® family of companies. Product availability and specific provisions may vary by state.

1Ranking of top Stop Loss providers in the United States based on yearly premium as of 05/25/2019 by MyHealthGuide Newsletter: News for the Self-Funded Community. Does not include managed health care providers.

External sources, all accessed July 29, 2020, listed in order of appearance in article:,earlier%20known%20as%20BMN%20270