Market Overview

Best's Briefing: Short-Term Health Plans Presents Growth Potential for Some Insurers


The U.S. Department of Health & Human Services' final rule on
short-term, limited-duration medical products should have a positive
impact on insurers that offer these policies, as these carriers will
likely see top-line growth through increased sales in this business
line, according to a new A.M. Best briefing.

The Best's Briefing, "HHS Rule Expands Coverage Period for
Short-Term Plans," notes that among the finalized changes, the
definition of a short-term policy — one that is less than 12 months —
stays intact, but the coverage may be renewed for up to 36 months
without re-underwriting the individual covered by the policy. A.M. Best
believes that the longer duration of the policies and the inability to
re-underwrite at renewal may result in higher rates than that seen on
the current policies with 90-day duration limits, although the cost of
these policies is expected to remain well below an Affordable Care
Act-compliant policy.

According to the briefing, many carriers that offer short-term medical
plans also sell supplemental benefits, such as hospital indemnity and
accident insurance. Buyers of the short-term medical policies also may
purchase these supplemental products, adding to the likelihood of
premium growth. The potential to keep short-term medical clients for
longer periods also may provide additional revenue and reduce
acquisition costs. Ultimately, the greatest potential for uptake of
short-term medical products in 2019 are purchases by healthier
individuals who are not Affordable Care Act-subsidized, or by
individuals that do not currently have coverage.

To access the full copy of this briefing, please visit

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