Get ready for a surge in healthcare and MSL claims in Q4, warns MSL’s Phillip Giles
Captives offering self funded healthcare plans and medical stop loss (MSL) coverage should brace themselves for a significant increase in claims during the last quarter of this year, according to Phillip Giles, managing director at MSL Captive Solutions.
Speaking exclusively to Captive International, Giles predicted a scheduling boom for healthcare providers towards the end of this year, to make up for a lull in routine, non-emergency, and elective procedures during the COVID-19 pandemic.
“With the mandated public sequestrations during the pandemic, most employer health plans have experienced an enormous drop in total claim costs,” Giles explained. “Most routine, non-emergency, and elective procedures have been canceled or put on hold. As a result, hospital and healthcare system revenues are also down tremendously - especially with the loss of high-margin procedural billings.”
Healthcare providers will want to make up the lost revenue by getting as much business done late in the year as possible, he said.
Meanwhile, hardening MSL rates and rising healthcare and insurance costs is set to increase the appeal of captives, Giles said.
“The combination will drive more mid-sized employers to self-funding as well as increase the participation in group MSL captives,” Giles predicted. “I expect existing individual self-insurers, especially those with a good performance history, to increase their specific MSL deductibles and their amount of retained risk. The use of single-parent captives will also increase as a strategic funding mechanism for MSL coverage by larger employers.”