Short-term health plans are increasing in popularity as consumers search for options outside the Patient Protection and Affordable Care Act for basic health insurance.
That’s what a study by eHealth, a private insurance exchange provider, found when it sought input from those who had used its online site to acquire short-term coverage.
The big picture was that applications for short-term coverage rose 130 percent from 2013 to 2014. That despite the fact that short-term coverage doesn’t meet PPACA specs for sufficient coverage and can lead to a federal tax penalty, eHealth noted.
When eHealth compared the short-term health application process in 2013 to that of 2014, here’s what it discovered:
- More than 60,000 consumers applied for short-term health insurance at eHealth in 2013
- More than 140,000 consumers applied for short-term health insurance at eHealth in 2014
- In 2013, 9 percent of all short-term applications at eHealth were declined, primarily for medical reasons; in 2014, that figure increased to 12 percent
- In 2014, 61 percent of the applications for short-term coverage at eHealth occurred outside of the open enrollment period
- Individuals between the ages of 18 and 34 made up over half (55 percent) of all short-term insurance applicants at eHealth in 2014
From a cost standpoint, short-term plans are attractive, eHealth said. Consider these findings:
- The average monthly premium for individual short-term plans purchased through eHealth in 2014 was $110
- The average monthly premium for family short-term plans purchased through eHealth in 2014 was $262
- By comparison, average premiums for individual major medical plans selected by unsubsidized eHealth shoppers during the 2015 open enrollment period were $286 per month for individuals and $727 per month for families
- Between 2013 and 2014, average monthly premiums for short-term plans purchased through eHealth increased 7 percent (from $103 to $110) for individuals and 17 percent (from $224 to $262) for families
Short-term plans have far smaller deductibles than major medical plans. The eHealth survey reported the following:
- The average annual deductible for individual short-term plans selected by eHealth shoppers in 2014 was $3,589; the average annual deductible for families was $8,566
- By comparison, average annual deductibles for major medical plans selected by unsubsidized eHealth shoppers during the 2015 open enrollment period were $4,120 for individuals and $7,760 for families
- Between 2013 and 2014, average monthly annual deductibles for short-term plans purchased through eHealth increased 18 percent (from $3,047 to $3,589) for individuals and 26 percent (from $6,816 to $8,566) for families
“We’ve seen a significant shift in the marketplace as consumers turn to affordable short-term coverage as an alternative to ACA-compliant health plans, even though these do not provide the same benefits and protections as major medical plans,” said eHealth CEO and Chairman Gary Lauer. “We believe that interest in short-term coverage may increase dramatically if the Supreme Court rules for the plaintiff in the case of King vs. Burwell and the ruling results in the loss of health insurance subsidies for millions of Americans.”