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Tag: Gene Therapy

16 Feb 2021

2020 Stop Loss Highlights

Even amongst a pandemic, BCS continues to be a leader in the Stop Loss space. While 2020 brought its share of challenges, BCS and its Stop Loss program saw many successes:

  • BCS continued to see growth in the Stop Loss channel and new sales in the large claims market. More large group employers are purchasing Stop Loss, and BCS’s Stop Loss High Deductible program (with $1M+ deductible) continues to be an interesting opportunity for Blue Plans.
  • The acquisition of Medical Risk Managers, Inc. (MRM) by BCS allows MRM’s comprehensive managing general underwriting service model to become an additional feature included in BCS’s RiskNavigator solution set, a highly predictive and actionable approach to managing carrier and employer large claim risks.
  • While COVID-19 impacted first dollar loss ratios, previously identified high-cost claimants (such as cancers, premature babies, and blood disorders) continued to lead claims payments. A segment we are watching is the growing rise in mental health claims, a side-effect from the pandemic, which have the potential for both high severity and frequency.
  • Meanwhile, BCS continues to focus on products to protect clients from the high costs of gene therapies, including building out our PreserveRx offering for larger clients.

For more information about BCS and its Stop Loss solutions, please contact Chris Bailey.

13 Jan 2021

Gene Therapy Poses Volatility Concerns for the Self-Insured Community: An Actuarial View

In recent years, science and technology have been rapidly innovating, bringing the cure to many genetic diseases within reach. Along with excitement is an equal level of nervousness as the costs of gene therapy poses significant financial concerns to risk-bearers. For large self-insured employers who do not typically purchase stop loss coverage, they are exposed to these new treatments that can cost over $2M.  For example, a 20,000-employee plan sponsor may be spending roughly $200M per year in health and benefit expenses, and is expected to have between zero and four Zolgensma treatments within their population. If they have one, it can be absorbed with the margin built into the premium equivalent rates. If they have four, the expense could exceed $10M, creating volatility that these large plan sponsors just haven’t seen before.

Smaller self-insured plans cannot manage this type of volatility, which is why they purchase employer stop loss coverage. But even the stop loss carriers are not immune to volatility. Take for example a $100M stop loss carrier that expects to run at a 75% loss ratio – one additional Zolgensma claim could impact the loss ratio by 2%, eating into margins that are already suppressed. That impact will eventually make its way down to the self-insured plan upon renewal. It is common for stop loss carriers to purchase excess of loss coverage that provides catastrophic protection, but it doesn’t provide the frequency protection that many carriers, and large self-insured plan sponsors, currently assume (i.e. getting more than your fair share of gene therapy claims).

The gene therapy pipeline is rich with several new treatments in the works and several with expected price tags ranging between $2M and $4M dollars. Expect risk management activities to expand for those in the self-insured community, whether it be large plan sponsors or even employer stop loss carriers. Contact BCS today to find out how we can help with risk mitigation, and provide protection against these treatments, which are creating financial volatility, but also bringing much needed curative therapy to members suffering from genetic disease.