County health-plan review: Horton Group warns of stop-loss renewal near 45% and budget pressure

Tim Deaton of the Horton Group presented Barron County’s 2023 plan performance and 2024 year-to-date claims through July and outlined a preliminary renewal projection for the county’s self-funded health plan at the Aug. 19 county board meeting.

Deaton said the county’s specific stop‑loss arrangement carries a retained risk of $50,000 per member and a 12/18 contract year definition. He reported that the stop‑loss carrier’s renewal offer came back "45.07," and warned that the renewal would increase projected plan expenses. "Voya can't put a laser on any of our individuals, and they can't raise our rates more than 50%. Well, they bumped pretty close to it. They gave us a 45.07," Deaton told the board. He said that, using the renewal number, the county’s projected total plan expenses would be about $7.5 million compared with a current budget near $6.6–$6.7 million.

Deaton walked board members through the components that feed the renewal, including gross medical and Rx claims, stop‑loss reimbursements, medical and Rx trend assumptions (he said he uses about 9% combined trend), and a 36‑month weighted experience period. For illustration he described an actuarial per-employee per-year claim calculation and the steps used to arrive at projected claim rates; different presentation slides in the packet and the renewal materials produced figures at different steps of the calculation (Deaton cited a projected per-employee per-year claim result in the presentation and then provided a stop-loss–adjusted per-employee figure as part of the renewal projection).

Deaton described several buy-down and risk-pooling products the county uses: a fully insured transplant policy (HCC Life) that covers organ transplants off-plan, an AmWINS pooled product for very large gene-therapy drug costs, and aggregate stop‑loss coverage. He said those arrangements reduce the chance of single catastrophic claims destabilizing the plan. He also described vendor roles: Anthem (network), PBA (third-party administrator), Carillon Rx (pharmacy benefit manager) and OptiMed (specialty pharmacy sourcing).

Deaton highlighted program-level savings. He said the Rx and Go mail-order generic program had year‑to‑date savings north of $14,000 and a large utilization increase year over year. He said OptiMed specialty sourcing had generated roughly $441,403 in savings year to date, and that the HealthJoy member advocacy and telemedicine product showed high enrollment (he reported 259 of 265 eligible employees had activated accounts in the sample used) and a return on investment he estimated at 7.2 times the program cost.

Board members asked technical questions about coverage. Supervisor Moseltein asked whether transplants are paid by the transplant policy; Deaton replied that transplant claims are paid first-dollar by the transplant carrier and would not hit the county’s medical plan. Members also discussed stop‑loss timing and the underwriting window; Deaton said carriers will review August claims and that firm stop‑loss pricing would likely be available in the third week of September. He recommended returning with firm stop‑loss proposals and any recommended plan‑design changes before open enrollment in November.

Deaton said the county’s stop‑loss renewal and final underwriting would be presented in closed session later in the meeting as part of the contract/negotiation discussion.

Why it matters: A near‑term, large stop‑loss renewal affects the county’s health-plan budget and could require higher funding rates, plan‑design changes or use of reserves. The board was given program metrics showing both savings opportunities and cost pressures.

What’s next: Horton Group will finalize stop‑loss market responses after carriers review August claims, expect firm pricing in mid‑September, and return with recommendations before November open enrollment.