What is the primary concern of the stop loss provision?

The primary concern of the stop loss provision is to prevent catastrophic financial losses for individuals covered by health insurance. A stop loss provision sets a cap on the amount of out-of-pocket expenses that an insured party must pay for healthcare costs during a specific period, typically a year. Once the out-of-pocket expenses reach a predetermined limit, the insurance company takes over and covers 100% of the additional costs.

This financial safeguard is particularly important in situations where a person might face extremely high medical bills due to severe illness or injury. By mitigating the financial burden that can arise from unexpected healthcare expenses, the stop loss provision helps ensure that individuals do not face overwhelming debt or financial ruin due to medical costs.

This focus on protecting individuals from significant financial hardship distinguishes the stop loss provision as a critical component of health insurance, addressing the risk of potentially devastating expenses that exceed typical health care costs.