Captive Resources Podcast Highlights Growing Use of Transplant Carve-Out Coverage in Self-Funded Plans

A recent episode of the Captive Resources' Captivating Health Insights podcast examined how transplant carve-out coverage can help self-funded employers and their captive insurance company manage one of the most unpredictable—and costly—areas of healthcare risk. Host Maddison Bezdicek spoke with Jennifer Lee, vice president and business development leader at QBE North America, about why transplant coverage is gaining traction across self-funded plans.

According to the episode, transplant carve-out policies are designed as true risk transfer solutions that remove transplant costs from the employer's health plan and provide first-dollar protection from evaluation through one year post-surgery. The approach often includes case-management support and direct member benefits, such as financial assistance for pediatric travel and lodging, underscoring the clinical and financial value these policies aim to deliver.

The podcast highlighted the significant cost drivers behind employer interest in transplant carve-out coverage. Kidney transplants can exceed $400,000, while heart, lung, and bone marrow procedures may reach into the millions—creating substantial exposure for self-funded plans and their captive insurance company. A carve-out can help avoid lasers, protect captive and excess layers from catastrophic volatility, and may even generate stop-loss discounts for employers, regardless of whether a transplant occurs during the policy year.

The discussion also distinguished transplant carve-out policies from network access programs. While networks focus on providing access and preferred pricing, a carve-out delivers direct financial protection and claim payment, which can improve predictability for both employers and the captive insurers supporting their health plans.

As more organizations adopt self-funding strategies, the episode noted that transplant carve-outs are becoming an increasingly common tool to stabilize plan costs and enhance support for employees facing complex medical needs.