Medical Risk Managers
Mehb's Expert Opinion
At home COVID testing impact on healthcare costs
By: Mehb Khoja | January 26th, 2022
Earlier this year (January 10th, 2022), the Biden administration announced that at-home COVID tests would need to be covered by insurance starting January 15th, 2022. At the time, many thought the additional costs to cover OTC tests could substantially increase first-dollar healthcare cost projections to self-insured plan sponsors. In the stop loss world this could have an impact to the aggregate claims as groups may be pushed over their attachment point.
The "Great Resignation" and Loss Ratios
By: Mehb Khoja | January 26th, 2022
Its mid-January which means whether you're a stop loss carrier, MGU, health plan, TPA, or broker - chances are you're reconciling 2021 revenue, actual vs expected. The result? The result? Many will see lower revenue than expected and the prime driver is "the great resignation".
Continue Reading >>
Its mid-January which means whether you're a stop loss carrier, MGU, health plan, TPA, or broker - chances are you're reconciling 2021 revenue, actual vs expected. The result? The result? Many will see lower revenue than expected and the prime driver is "the great resignation".
Continue Reading >>
Gene and Cell Therapy Updates
By: Mehb Khoja and Jon Forster | November 1st, 2021
Gene & Cell therapy has been a hot topic the past few years with many big ticket medications up for approval. While these are potentially lifesaving therapeutics, they expose an enormous risk to payers. FDA commissioner Scott Gottlieb, MD stated “by 2025, we predict the FDA will be approving 10 to 20 cell and gene therapy a year based on the assessment of the current pipeline and the clinical success rates of these products” in a statement on January 15, 2019.
Continue Reading >>
By: Mehb Khoja and Jon Forster | November 1st, 2021
Gene & Cell therapy has been a hot topic the past few years with many big ticket medications up for approval. While these are potentially lifesaving therapeutics, they expose an enormous risk to payers. FDA commissioner Scott Gottlieb, MD stated “by 2025, we predict the FDA will be approving 10 to 20 cell and gene therapy a year based on the assessment of the current pipeline and the clinical success rates of these products” in a statement on January 15, 2019.
Continue Reading >>
Employer Stop Loss and COVID19 - Impact on Business Results
By: Mehb Khoja and Jon Forster | July 12th, 2021
When studying the earnings and financial results of public health insurers, one could see that 2020 was a good year for first dollar carriers. However, as a large claim carrier, we saw a different result and we’re sharing some of those results here.
Employer Stop Loss and COVID19-Migration Trends Impacting High
Cost Claims
By: Mehb Khoja | March 9th, 2021
So what does this migration mean to healthcare? The simple answer is a ton. Like other services like gas stations, restaurants, and grocery stores, healthcare has a supply/demand curve that would be affected in areas where migration's impact means more departures than arrivals. These trends will impact the demand for healthcare services and ultimately the need for newer facilities. It also impacts the insurer's ability to negotiate better terms and conditions with providers.
Employer Stop Loss and COVID19 - Impact of Mental Health
By: Mehb Khoja
| November 22nd, 2020
Mental health is not as widely discussed as it should be and that’s due to the stigma (negative attitudes, thoughts, beliefs and stereotypes) towards those with mental health issues. While public campaigns such as Mental Health Awareness Month (May) and World Mental Health Day (October 10th) start conversations, having them sustain has been an issue. But according to the AHA report, we’re on the verge of a mental health crisis.
Unemployment Impact to Loss Ratios?
By: Mehb Khoja | October 12th, 2020
As of this writing, more than 25M people are collecting unemployment benefits and over 1M people filed for unemployment for the first time last week. The unemployment rate is hovering near 8% and these are some of the worse jobless reports we've seen since the great depression.
So what does unemployment mean to the employer sponsored health insurance industry?
So what does unemployment mean to the employer sponsored health insurance industry?
Could COVID19 Deal a Death Blow to RBP?
By: Mehb Khoja | August 9th, 2020
Of the myriad of cost-containment solutions available in the market, one of the favorites of the stop loss industry is referenced-based pricing (RBP). RBP is typically a non-network solution where patients seeking hospital care will work with RBP vendors to secure lower pricing for facility charges. These charges are usually a reference point to Medicare. It’s no secret that Medicare has a better with hospitals in most cases (if Medicare secures a price of $100, the commercial carriers are typically reimbursing between 2x to 4x for the same service).
What Can the Latest Earnings Report tell us about COVID19
By: Mehb Khoja | July 24th, 2020
By: Mehb Khoja | July 24th, 2020
As of this writing, the daily rate of COVID-19 infections has soared to between 70,000 and 75,000 cases a day. The uptick in infections is due to more testing being conducted but it's also due to a spread of the virus and we're seeing several states roll back their reopening plans. As the fall approaches, many schools across the country are also rethinking their reopening plans by focusing more on e-learning and expecting less in-school attendance.
The rise in the pandemic and the early surge in infection rates occurred in March which means we've now gone through two market earnings' cycles. As we view data from the latest earnings reports, what can we learn and forecast for the stop loss market?
Medical Reinsurer's Reaction to COVID-19
By: Mehb Khoja | June 21st, 2020
By: Mehb Khoja | June 21st, 2020
Given the dispersion of risk between employers, employer stop loss carriers and reinsurers we should expect reinsurers to be the experts at cell and gene therapy, employer stop loss carriers to be the experts at cancers, congenital anomalies and high cost drugs and for employers (and their advisors) to be the experts on claims below traditional stop loss deductible thresholds. So who should be the experts on COVID-19 claims?
I recently wrote this article for the Society of Actuaries' "Reinsurance News" newsletter where I explore this topic as well as how knowledge of healthcare claims differs between self-insured employers (and their advisors), employer stop loss carriers, and medical reinsurers.
Are the medical reinsurers equipped with the right tools and resources to understand COVID-19 infection rates and subsequent healthcare costs and utilization?
I recently wrote this article for the Society of Actuaries' "Reinsurance News" newsletter where I explore this topic as well as how knowledge of healthcare claims differs between self-insured employers (and their advisors), employer stop loss carriers, and medical reinsurers.
Are the medical reinsurers equipped with the right tools and resources to understand COVID-19 infection rates and subsequent healthcare costs and utilization?
COVID-19 and Gene Therapy - The "Push" and "Pull" on Stop Loss and Self-Insurance
By: Mehb Khoja | June 8th, 2020
By: Mehb Khoja | June 8th, 2020
COVID-19 will ultimately have an impact on self-insurance that is almost an immediate opposite impact that cell/gene therapy has had. I think of this as a "Push" and "Pull" on risk tolerance. I believe COVID-19 will "pull" more plans towards self-insurance with stop loss. I also believe cell/gene therapy will "push" larger employers, regional health plans, and even large direct carriers towards newly purchasing stop loss coverage, newly purchasing excess of loss coverage, or purchasing these coverages at newer/lower levels. The impact of today's healthcare economy is creating a fascinating change in risk tolerance and something all self-insured/stop loss experts should be closely monitoring.
Continue Reading >>
Continue Reading >>
Employer Stop Loss and COVID19 - Experience Rated Refunds
By: Mehb Khoja | May 29th, 2020
By: Mehb Khoja | May 29th, 2020
Experience refunds in stop loss policies come in different shapes and sizes. Refunds can be based on a single case (one policyholder's experience) or based on a pool where the pool organizer could be a broker/consultant or association. Typically, the calculation is based on claims compared to gross or net premiums. A simple example could look like this:
Bravery In The New World Order: Making Sense of COVID-19 in Actuarial, TPA, Stop-loss, and Brokerage Arenas Along the Road to Flattening the Curve of This Deadly Pandemic
May 2020 digital edition of The Self-Insurer magazine
Employer Stop Loss and COVID19 - Unemployment's Impact on Loss Ratios
By: Mehb Khoja | April 20th, 2020
As employers deal with the downturn in the economy, we should expect many employers will permanently reduce headcount in order to operate their businesses. Many employers are using temporary measure such as reduced hours and furloughs while they hope to receive federal funds to help bridge the gap. From a stop loss perspective, we've seen several employers and health plans seeking to make amendments to eligibility to allow for coverage of furloughed, reduced hour, and even terminated or temporarily laid off employees.
Why The Sleep at Night Insurance is Keeping Stop Loss Carriers Awake
By: Mehb Khoja | April 14th, 2020
COVID-19 is certainly putting pressure on the health insurance industry but for stop loss carriers, that pressure is seen on the aggregate stop loss policy and potentially the individual policy. Stop Loss carriers collect little premium for aggregate coverage because the probability of an aggregate claim is low, but with the coronavirus pandemic all stop loss carriers are closely monitoring their aggregate policies.
Employer Stop Loss and COVID19 - Rush, Hush, and Crush
By: Mehb Khoja | March 31st, 2020
If you Google the phrase "rush hush crush" you'll come across an article written in the Society of Actuaries' Health Watch by Joan Barrett, FSA, MAAA, in 2008 that speaks to utilization patterns changing when significant benefit design changes are made. If you go back to 2008, you'll recall that consumer-directed health plans were on the rise. CDHP were the original high-deductible health plans with savings accounts - either HSAs or HRAs. As they were being introduced to brokers, consultants, and employers the creators of these plans touted the significant savings due to both cost shifting and behavioral differences in plan utilization. Reminds me of my days at Destiny Health - one of the innovators of CDHP along with Definity Health.
Employer Stop Loss and COVID19 - Part 2
By: Mehb Khoja | March 31st, 2020
By: Mehb Khoja | March 31st, 2020
With the passing of the Families First Coronavirus Response Act, fully insured carriers are providing coverage for COVID-19 testing and testing related expenses. Taking that a step further, many fully insured plans are providing access to telemedicine at no cost as well as early refills on maintenance medications. While these benefits are automatic for those on a fully insured plan, members of a self-insured plan need their plan sponsor to make the same benefit enhancements during this time and most TPAs and large ASO health plans are suggesting that path.
Employer Stop Loss and COVID19 - What You Need to Know
By: Mehb Khoja | March 26th, 2020
COVID-19 will certainly have an impact on employer stop loss coverage with ramifications to employers, brokers, consultants, TPAs, stop loss carriers, and reinsurers. The purpose of this note is to layout the facts as I see them and share my position on the various risks.
Finding the Right Stop Loss Partner
March 2nd, 2020
In this podcast, Mehb talks with ShiftShapers' David Saltzman about the importance of finding the right Stop Loss partner. He describes some efficient product options that help employers save premium dollars and Stop Loss carriers liability on known claimants
and also discusses the importance of forging long term relationships.
The Inefficiency of Pharmacy Rebates to Stop Loss Pricing
By: Mehb Khoja | February 18th, 2020
According to an article by The Pew Charitable Trusts, “Americans spend more on prescription medications each year than the citizens of any other country. The federal Centers for Medicare & Medicaid Services (CMS) estimates that total retail prescription drug spending rose 26.8 percent between 2012 and 2016—a faster rate of growth than all other categories of personal health care expenditures”. You can’t turn on the TV, read a magazine or newspaper, or listen to the radio without being pummeled by advertisements by the pharmaceutical industry – and it seems like their marketing efforts are paying off.
Continue Reading >>
By: Mehb Khoja | February 18th, 2020
According to an article by The Pew Charitable Trusts, “Americans spend more on prescription medications each year than the citizens of any other country. The federal Centers for Medicare & Medicaid Services (CMS) estimates that total retail prescription drug spending rose 26.8 percent between 2012 and 2016—a faster rate of growth than all other categories of personal health care expenditures”. You can’t turn on the TV, read a magazine or newspaper, or listen to the radio without being pummeled by advertisements by the pharmaceutical industry – and it seems like their marketing efforts are paying off.
Continue Reading >>
The Role of Reinsurance in Your Stop Loss Policy and Premium
By: Mehb Khoja | November 21st, 2019
Stop loss renewal season is well underway and I continue to hear from brokers, clients and competitors that the market is hardening. That securing favorable terms/conditions for the upcoming renewal has been much harder for brokers than in years past. Stop loss carriers will point to the typical reasons for increasing rates: leveraged trend, higher frequency of claims, costs of specialty drugs – these are all valid reasons why rates would go up.
By: Mehb Khoja | November 21st, 2019
Stop loss renewal season is well underway and I continue to hear from brokers, clients and competitors that the market is hardening. That securing favorable terms/conditions for the upcoming renewal has been much harder for brokers than in years past. Stop loss carriers will point to the typical reasons for increasing rates: leveraged trend, higher frequency of claims, costs of specialty drugs – these are all valid reasons why rates would go up.
Not So Captivated
By: Mehb Khoja | September 11th, 2019
In this article, I’m going to explore the merits of using a SINGLE PARENT CAPTIVE as a funding vehicle for employer stop loss coverage. Excuse the caps, but I can already see the critical feedback I will receive from small group captives. For starters, a single parent captive is a legal entity created by companies to fund and retain claims that would traditionally be assigned to a commercial insurer. An example would be XYZ Company, who traditionally buys employer stop loss coverage at $250,000 per member, establishing and funding a captive to pay for health plan claims in excess of $250,000 per member. Single parent captives are used by larger companies who understand risk assumption and cash flow implications.
Continue Reading >>
By: Mehb Khoja | September 11th, 2019
In this article, I’m going to explore the merits of using a SINGLE PARENT CAPTIVE as a funding vehicle for employer stop loss coverage. Excuse the caps, but I can already see the critical feedback I will receive from small group captives. For starters, a single parent captive is a legal entity created by companies to fund and retain claims that would traditionally be assigned to a commercial insurer. An example would be XYZ Company, who traditionally buys employer stop loss coverage at $250,000 per member, establishing and funding a captive to pay for health plan claims in excess of $250,000 per member. Single parent captives are used by larger companies who understand risk assumption and cash flow implications.
Continue Reading >>
Medical / Rx Inflation on Large Claims
By: Mehb Khoja | August 7th, 2019
According to Milliman, “the percentage growth of employee costs for healthcare has slowed in recent years”. But are stop loss carriers seeing a similar slowing of healthcare costs? If you’ve received/negotiated a stop loss renewal recently, you know about leveraged trend. Medical and pharmacy claims typically increase every year due to changes in unit cost and utilization and this increase in costs affects both the plan sponsor and the stop loss carrier. In the absence of an increase to the stop loss deductible, the carrier’s liability increases with leveraged trend.
By: Mehb Khoja | August 7th, 2019
According to Milliman, “the percentage growth of employee costs for healthcare has slowed in recent years”. But are stop loss carriers seeing a similar slowing of healthcare costs? If you’ve received/negotiated a stop loss renewal recently, you know about leveraged trend. Medical and pharmacy claims typically increase every year due to changes in unit cost and utilization and this increase in costs affects both the plan sponsor and the stop loss carrier. In the absence of an increase to the stop loss deductible, the carrier’s liability increases with leveraged trend.
Employer Stop Loss is Ripe for Disruption
By: Mehb Khoja | May 28th, 2019
Insurtech, according to Investopedia, is the use of technology innovations designed to squeeze out savings and efficiency from the current insurance industry model. This definition suggests the insurance industry has inefficiencies and that disruption is needed. “Disruption” is a common term in all industries today including the insurance industry and most of the disruption is coming from firms that believe that traditional insurance companies are not providing enough value to their customers.
By: Mehb Khoja | May 28th, 2019
Insurtech, according to Investopedia, is the use of technology innovations designed to squeeze out savings and efficiency from the current insurance industry model. This definition suggests the insurance industry has inefficiencies and that disruption is needed. “Disruption” is a common term in all industries today including the insurance industry and most of the disruption is coming from firms that believe that traditional insurance companies are not providing enough value to their customers.
Stop Loss Pricing and the NFL Draft
By: Mehb Khoja | April 25th, 2019
Roughly 60% of self-insured employers who purchase stop loss coverage have a January 1 policy and the renewal process kicks off typically in the late summer. Employers, usually with help from a broker, will go to the market to solicit quotes and it starts with a preliminary rate increase followed by a firm and final offer by the fall (football season). But how well do you understand how your stop loss premium was developed? You’ve likely heard your stop loss rates are manually rated or perhaps you’ve heard that your rates are a blend of your experience and the insurance carrier’s manual.
By: Mehb Khoja | April 25th, 2019
Roughly 60% of self-insured employers who purchase stop loss coverage have a January 1 policy and the renewal process kicks off typically in the late summer. Employers, usually with help from a broker, will go to the market to solicit quotes and it starts with a preliminary rate increase followed by a firm and final offer by the fall (football season). But how well do you understand how your stop loss premium was developed? You’ve likely heard your stop loss rates are manually rated or perhaps you’ve heard that your rates are a blend of your experience and the insurance carrier’s manual.
By: Mehb Khoja | April 15th, 2019
There are some big things happening in the medical arena right now – and it's creating heart burn for health insurance professionals who manage and mitigate risk. If you haven’t heard, medical and pharmacy researchers are on the road towards curing certain diseases and disorders. Just Google “curable gene therapy” and you’ll see a plethora of public articles and studies. But these treatments are creating some confusing times for health insurance professionals.
Mehb Khoja is the President of Medical Risk Managers. In his career, Mehb has consulted to employers, insurance carriers, reinsurers and the pharmaceutical industry. He is well versed in the wide range of issues impacting employer stop loss carriers. Mehb has been a frequent guest speaker at various industry events and is a volunteer at the Society of Actuaries. His most recent speaking engagements and publications include:
• Implications of High Cost Pharmacy to the Reinsurance Industry (Actuaries’ Club of Hartford and Springfield – November 2019)
• Special Topics in Stop Loss for the Self-Insured Benefit Plan (Society of Actuaries Webinar – April 2019)
• Identifying Opportunities for Enabling Precision Financing (Paying for Cures: MIT NewDIGSs Conference February 2019)
• Considerations to Date on Reinsurance and Oncology Alternative Payment Models (Tapestry Networks – September 2018)
• Role of the Actuary in Self-Insurance (Published report – June 2018; SOA Health Meeting – June 2018)
• Drug Pipeline Impact on Future Claims Costs (SOA Health Meeting – June 2018)
• Opportunities in the Employer Stop-loss Market (Actuarial Club of Hartford and Springfield – November 2017)
• New Developments in Medical Stop-loss (Employer Healthcare and Benefits Congress – October 2017)
• Employer Stop-loss Market Overview (Milliman Health Forum – September 2017)
• 2017 BCBS National Stop Loss Strategy Conference (September 2017)
• 2016 Employer Stop-loss Market: A Milliman Survey (Milliman Insight – July 2017)
• Stop-loss Insurance – Panel Discussion (Society of Actuaries Spring Meeting – June 2017)
• Considerations for Stop-loss Coverage (Milliman’s Health and Group Benefits News and Developments – February 2017)
• The Employer Stop-loss Insurance Marketplace since the Affordable Care Act (Milliman Insight – January 2017)
• 2016 BCBS National Stop Loss Strategy Conference (September 2016)
