Let's talk about "stability" – probably the most overused and least understood term in the health insurance captive space. Everyone claims it. Few deliver it. Even fewer can prove it. But here's the thing: true stability isn't just about keeping things steady. It's about consistently driving better outcomes.

When captive managers talk about stability, they often point to their size, their carrier relationships, or how long they've been around. But these are inputs, not outcomes. It's like judging a restaurant by how many tables it has rather than the quality of its food. The real measure of stability is in the numbers – specifically, the stop-loss trend line.

Here's what most won't tell you: Many programs achieve "stability" by artificially suppressing renewal increases through cross-subsidization. They'll use premium from better-performing groups to subsidize poorer performers. This creates a temporary illusion of stability, but ultimately destabilizes the program by masking problems and penalizing high-performing groups.

Think about it this way: If your captive is running a positive stop-loss trend (meaning costs are increasing year over year), you're not achieving stability – you're just managing decline. Real stability means bending the cost curve downward. Since inception, while the broader market continues to see trend increases into the double-digits, we’ve achieved a -3.2% stop-loss trend. That's not just stability – that's improvement.

But here's where it gets interesting: Many programs claim similar results, but they're often playing with smoke and mirrors. They'll talk about "average renewals" without mentioning how they calculate them. They'll boast about member retention without discussing whether those members are actually saving money. They'll highlight their best performers while quietly shuffling struggling groups out the back door.

The truth about stability lies in three key metrics that rarely get discussed:

First, there's benchmark spec deductible alignment. Your program should tie specific deductibles to actual claim performance. Otherwise, you're subsidizing underperformance through premium slipstreaming - essentially creating a pyramid scheme with a healthcare wrapper.

Second, there's surplus distribution. A stable program returns 100% of the captive layer surplus to members pro-rata. Anything less means someone's skimming off the top, creating misaligned incentives that ultimately destabilize the program.

Third, there's carrier independence. When a program manager's revenue is tied to specific carriers, their guidance on stability often protects carrier relationships rather than member interests.

Real stability comes from selective membership, proper risk alignment, and transparent incentives. It requires saying "no" to groups that don't fit and maintaining independence from carriers to prioritize member interests. Additionally, it means using a fee-based compensation model that aligns with member success.

The market is full of claims about stability. But dig deeper, and you'll often find that "stability" is code for "we've figured out how to hide the problems." True stability – the kind that delivers negative trend lines – comes from making the right decisions to get the right results.

So next time someone talks to you about program stability, ask if they’re just managing decline. Ask about their compensation model. Ask about their carrier relationships. Because in the end, stability isn't about maintaining the status quo – it's about consistently driving better results.