Voya Financial's offices in Minneapolis, MN. Credit: wolterke/Adobe Stock
Voya has bad news for employers with fully insured health plans that want to avoid big cost increases by shifting to self-insured plans: Rates for stop-loss insurance are also going up. A lot.
Stop-loss insurance can protect sponsors of self-insured plans against catastrophic losses, and Voya has been one of the major players in the stop-loss market. Heather Lavallee, CEO of the New York-based company, and other Voya executives told securities analysts yesterday that the company is continuing to fight a surge in claims, which began a year ago, by taking a tough approach to pricing. “We saw another quarter of positive claims development,” Lavallee said. “We remain focused on improving margins.”
The Segal Group has found signs that 2025 stop-loss price increases, which were set in 2024, may be slightly lower than 2024 increases. But many big medical insurance and stop-loss providers have reported seeing an overall surge in claim costs that started in mid-2024. Meanwhile, health coverage providers trying to control costs are facing fierce resistance from physicians, hospitals, lawmakers, and regulators to some common strategies, such as efforts to review proposals for care before the care happens and efforts to work with relatively small networks of providers that have agreed to accept heavily discounted rates in exchange for access to a large number of patients.
One hint at what 2026 group health coverage prices might look like is emerging in state insurance department and state public health insurance exchange reports on preliminary small-group rate filings for next year. A recent sampling of small-group rate announcements in six states showed that average increases for fully insured coverage in those states ranged from 9.9 percent to 20.8 percent.
Voya expects to see medical claim cost increases stay high and is now building the high claim cost increases into stop-loss prices. “We’re continuing to focus on the discipline of margin improvement over any type of premium growth,” Lavallee said on the company’s Q2 earnings call. Voya streamed the call and posted a recording on its website.
Jay Kaduson said he doesn’t think this will spell the end of companies’ interest in self-insurance. “You’re seeing more and more companies on the smaller end of the market thinking about, with the rising cost of health insurance, self-insuring,” Kaduson said. “This marketplace will expand.”
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From: BenefitsPRO
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