Federal Agencies Release Proposed Rule Amending the Definition of Short Term Medical (STM) Insurance to Lengthen the Maximum ...
February 20 2018 - 4:57PM
Independence Holding Company (NYSE:IHC) commented on the rule
released today by three federal agencies (the “Agencies”) proposing
the extension of the duration of temporary health insurance plans
to a period of up to 364 days, subject to state law. The proposed
rule also asks for comments on allowing STM (also known as
short-term, limited duration insurance) to continue for 12 months
or longer.
The proposed rule lists the following benefits
of short-term, limited duration insurance: (i) offers consumers
increased insurance options at lower premiums (in their example,
$124 per month compared to $393 per month for an unsubsidized
Affordable Care Act (ACA)-compliant plan), and (ii) possibly offers
broader access to health care providers compared to ACA-compliant
plans with narrow provider networks. It goes on to say that
the Agencies “anticipate that the rule, if finalized, would
encourage more consumers to purchase short-term limited-duration
insurance for longer durations, including individuals who were
previously uninsured.” They further comment that “Issuers
would benefit from higher enrollment … and likely … experience an
increase in premium revenues and profits because such policies can
be priced in an actuarially fair manner.”
As a leader since 2005 in underwriting STM,
should the rule go into effect, IHC expects to increase not only
the sale of its STM products, but also its Fusion and other
specialty health products. IHC began selling Fusion, which bundles
two of IHC's industry leading products (a fixed-indemnity medical
benefit plan with a high deductible STM plan), in the fall of 2017.
The combination of the two plans provides an affordable option for
consumers who are priced out of the ACA market, find themselves in
a county without a compliant plan or have a short-term need for
health insurance. IHC selectively distributes these products
through co-branded arrangements with many of the largest health
insurers and e-brokers in the country, as well as through IHC’s own
distribution channels, including www.HealtheDeals.com, HealtheDeals
Advisors, and AspiraAMas.
David Kettig, President and Chief Operating
Officer, commented: “STM has for many years filled a vital purpose
for individuals with limited duration health insurance needs, and
was specifically permitted by the Affordable Care Act. In our
experience, STM is primarily purchased by people between jobs,
people in counties with only a single insurer offering exchange
plans, people with limited coverage networks and people who missed
the open enrollment period but still want insurance. When STM is
coupled with our hospital indemnity coverage, individuals have very
affordable first-dollar hospitalization coverage coupled with
limited duration catastrophic insurance. IHC is gratified that the
Trump Administration has validated the importance of short-term
medical as an affordable alternative for many Americans who cannot
afford expensive, high-deductible ACA plans. Many of our customers
have asked us why they were forced to reapply for another
short-term medical policy after only 90 days instead of maintaining
it for up to 364 days as was permitted in many states prior to the
action by the Obama Administration. Other customers have
expressed an interest in buying Fusion, but only if the STM portion
were available for more than 90 days. IHC will unveil a new
short-term plan in select states in April that will redefine the
market for affordable health insurance, which we believe will
solidify our position as a market leader for these products through
www.HealtheDeals.com, our key distribution partners, and
independent producers throughout the country.”
More information:
https://www.hhs.gov/about/news/2018/02/20/trump-administration-works-give-relief-americans-facing-high-premiums-fewer-choices.html
About The IHC Group
Independence Holding Company (NYSE:IHC) is a
holding company that is principally engaged in underwriting,
administering and/or distributing group and individual specialty
benefit products, including disability, supplemental health, pet,
and group life insurance through its subsidiaries since 1980.
The IHC Group owns three insurance companies (Standard Security
Life Insurance Company of New York, Madison National Life Insurance
Company, Inc. and Independence American Insurance Company), and IHC
Specialty Benefits, Inc. (IHC SB), a technology-driven full-service
marketing and distribution company that focuses on small employer
and individual consumer products through general agents,
telebrokerage, advisor centers, private label arrangements, and
through the following brands: www.HealtheDeals.com; Health eDeals
Advisors; Aspira A Mas; www.PetPartners.com; and
www.PetPlace.com. IHC creates value for insurance producers,
carriers and consumers (both individuals and small businesses)
through a suite of proprietary tools and products, all of which are
underwritten by IHC’s carriers or placed with highly rated
insurance companies.
Forward-looking Statements
Certain statements and information contained in
this release may be considered “forward-looking statements,” such
as statements relating to management's views with respect to future
events and financial performance. Such forward-looking
statements are subject to risks, uncertainties and other factors
that could cause actual results to differ materially from
historical experience or from future results expressed or implied
by such forward-looking statements. Potential risks and
uncertainties include, but are not limited to, economic conditions
in the markets in which IHC operates, new federal or state
governmental regulation, IHC’s ability to effectively operate,
integrate and leverage any past or future strategic acquisition,
and other factors which can be found in IHC’s other news releases
and filings with the Securities and Exchange Commission. IHC
expressly disclaims any duty to update its forward-looking
statements unless required by applicable law.
CONTACT: LOAN
NISSER(646)
509-2107www.ihcgroup.com
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