What does stop-loss insurance provide coverage against?

Stop-loss insurance provides coverage against unexpected financial losses, particularly those that arise from large claims that exceed the normal cost threshold for healthcare expenditures. This type of insurance is designed to protect healthcare providers or organizations from significant financial risk by limiting their overall liability for high-cost claims.

For example, if a patient undergoes an extremely costly treatment that results in expenses surpassing a predetermined amount, the stop-loss insurance would cover the costs that exceed this limit, thereby safeguarding the provider against potentially catastrophic financial consequences. This makes it a critical risk management tool in the healthcare industry, allowing organizations to plan their budgets more effectively and ensuring they can continue to provide care without being overwhelmed by excessive claims.

The other options do not align with the nature of stop-loss insurance coverage. High patient turnover pertains to operational challenges rather than financial risks from claim costs. Routine administrative costs are part of regular business expenses and not unexpected financial losses. Losses from malpractice claims, while serious, are typically covered by separate malpractice insurance policies rather than stop-loss insurance.