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Despite not offering Affordable Care Act plans, Independence Holding Co. is in the midst of reinventing itself in a post-health reform world by focusing on supplemental “gap” and short-term medical plans that offer higher commissions to agents than individual major medical, says the company’s chief operating officer and senior vice president. IHC exited individual major medical insurance last year, said David Kettig, who’s also president of Standard Security Life Insurance Company of New York, a subsidiary of IHC (NYSE: IHC). The book, which had about $55 million in premium at its peak, likely will be completely run-off by the end of this year sometime, he said.
The decision was “economic,” Kettig said. With the “Three Rs” in health reform — risk adjustment, risk corridors and reinsurance — and “throw in the rebates” on the medical loss ratio requirements, it’s very difficult for insurers with smaller books of business to continue to write major medical in many states.
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