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STAMFORD, Conn., Aug. 01, 2018 (GLOBE NEWSWIRE) -- Independence Holding Company (NYSE: IHC) commented on the final rule released today by the departments of Health and Human Services, Labor and Treasury (the “Agencies”) returning the duration of temporary health insurance to a period of up to 364 days, subject to state law. The rule, which is expected to be effective October 1, 2018, also allows for extensions so long as the maximum duration is not longer than 36 months in total.
HHS: Short Term Medical Is an Affordable Option
The Agencies commented that short-term, limited-duration (also known as short-term medical (“STM”)) insurance plays an important role in providing temporary valuable health coverage to individuals who would otherwise go uninsured. Short-term, limited-duration insurance can also provide a more affordable, and potentially desirable, coverage option for some consumers, such as those who cannot afford unsubsidized coverage in the individual market. The final rule balances the important role that this product plays in the market, while at the same time distinguishing it from individual health insurance coverage and requiring issuers of short-term, limited-duration insurance to inform consumers of how coverage under the policy might differ from coverage under individual health insurance coverage.
The Agencies further noted that consumers who purchase STM for longer periods than currently permitted will benefit from increased insurance options at lower premiums, as the average monthly premium for an individual in the fourth quarter of 2016 for a short-term, limited-duration policy was approximately $124 compared to $393 for an unsubsidized individual market plan — a premium savings of 70 percent. They noted that the disparity may be wider given that unsubsidized premiums significantly increased from 2016 to 2018. This final rule will provide an affordable alternative to individuals who do not qualify for premium tax credits and have been harmed by rising premiums in the individual market.
IHC Is a Market Leader for Short Term Medical
IHC’s insurance companies have been leading underwriters of STM since 2005. The IHC Group believes that the longer duration of STM will create further interest in the purchase of its unique Fusion product, which consists of a fixed-indemnity medical benefit policy with a high deductible STM policy. The combination, or Fusion of the two policies, provides an affordable option for consumers who: are priced out of the ACA market, find themselves in a county with only one or no plan that is compliant with the ACA or have a short-term need for health insurance. The Agencies commented that, in 2018, about 26 percent of enrollees (living in 52 percent of counties) have access to just one issuer in the Exchange. The IHC Group 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 and contracted local producers and call center agents.
Short Term Medical for the Uninsured
David Kettig, President and Chief Operating Officer, commented: “while ACA plans are very attractive for subsidy-eligible persons, ACA plans are simply unaffordable for many middle-class Americans who would likely be uninsured were it not for short term limited duration policies. These policies are often excellent choices for people between jobs, those in counties with only one, or no, insurer offering exchange plans, or who missed open enrollment period and still want to have insurance coverage. Our Fusion product couples a high deductible short term medical with our hospital indemnity coverage, which provides individuals with affordable first-dollar hospitalization coverage and a limited duration catastrophic insurance as well. In April 2018, we unveiled a new short term medical plan, Connect Plus, that redefines the short term medical marketplace by providing coverage for certain pre-existing conditions up to $25,000. A first-of-its-kind plan, Connect Plus is available in 23 states and solidifies our position as a market leader in the specialty health marketplace.”
“Since adoption of another executive order in 2017, consumers have only been able under federal law to purchase STM policies with durations up to 90 days. We are pleased that the Agencies have validated the importance of short term medical as an affordable alternative for many Americans who cannot afford expensive, high deductible ACA plans by once again allowing states the ability to approve policy durations of up to 364 days or longer with extensions. Beginning January 1, 2019, there will no longer be a tax penalty for individuals who do not have ACA plans. We believe that this development, together with longer duration STM, and expected continuing increases in ACA premiums, will significantly increase the demand for alternative coverages. Given our innovative products, IHC is well-positioned to satisfy consumers’ desire for STM and ancillary products.”
About The IHC Group
Independence Holding Company (NYSE: IHC), formed in 1980, 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 (Independence Holding Company and its subsidiaries collectively referred to as “The IHC Group”). The IHC Group consists of 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., 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.
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