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Under the Obama Administration, short-term medical plans were limited to 90 days. Now, the Trump Administration is moving to reverse the rule back to its previous 364-day limit.
Jan Dubauskas, Chief Operations Officer for IHC Carrier Solutions and General Counsel for IHC Specialty Benefits, recently spoke with Tim Farely of POTUS Politics on Sirius XM about the rule change and explained:
Dubauskas also talks about a new short-term insurance product called Connect Plus that includes limited benefits for certain pre-existing conditions—a coverage nobody else has and an innovation that will expand access to temporary coverage, which is typically less expensive than an ACA plan.
Farley: There’s a rule change happening that you need to know about. Under proposed federal rules, Americans will be having more access to short-term health insurance. What does this mean?
Well, Jan Dubauskas is with us. She manages the IHC operations, third-party administration, product development, legal compliance. She has also served as the general counsel and secretary for Oxford Life Insurance Company. She is the Chief Operations Officer of The IHC Group.
And, the Twitter handle is @IHC_SBenefits
Jan Dubauskas, welcome. Thank you for being on POTUS today.
Dubauskas: Thank you so much for having me Tim; I appreciate it.
Farley: Explain the rule change. This would see short-term healthcare plans lengthen from the current maximum coverage of 90 days to 364 days. How would this take place?
Dubauskas: Let me just take you back one moment when the rules changed to shorten short-term medical to 90 days in 2017 under an Obama rule. What’s unusual about it is that short-term medical was allowed up to 12 months under the ACA before.
What this proposed rule is really doing is restoring short-term medical to where it was. And then, they’re also asking the question of whether we should allow it for durations of longer than 12 months.
Short-term medical really is a product that’s designed to help people who have a very limited need. So, say you’re between jobs, say you want a product that can help you get to an open enrollment period, something like that.
Short-term medical can be very valuable for someone who needs a product for 6 months, 9 months, and it is a lower price because it doesn’t have all of the benefits of an ACA plan. But it’s still a major medical plan, so it’s got plenty of services like physician, emergency room, hospital, intensive care, things like that.
The price is much lower. You’ll see on an ACA plan in 2016 the average plan was $393 per month, and a short-term medical plan was $124.
So a short-term medical plan is clearly more affordable. And under this proposed rule, HHS is asking the question: Should we be making this product more widely available for people, especially considering the mandate is being removed for 2019? And they’re expecting 3 million people are going to walk away from their ACA plan. That’s going to leave a lot of people uninsured. And so, they’re asking the question: Is this the next solution for that issue with the ACA?
F: Why did the period get shortened in the first place?
D: There’s a perception in the Obama administration that people saw the value in short-term medical and were buying short-term medical instead of ACA plans and that was hurting the pool for the ACA plans. So they said, well, let’s make it so you can’t buy short-term medical for a 12-month period and then another 12-month period and another 12-month period. They had that idea that lots of people were making that purchase.
And, we’re the leading carrier for short-term medical in the United States, and so we took our data from HealtheDeals.com and we averaged out what the average duration that people really are buying short-term medical for.
The average duration really is 4.2 months, and so what that means is that people are buying it for the interim need that they had and they’re really not buying it for year over year over year.
So, we just think they got it flat wrong, and that’s okay, they were trying to make sure they were protecting the ACA. But now, the Trump Administration is interested in providing people with choices and options.
The benefit of short-term medical, in addition to having a lower price, is that in many areas we have a larger network available because we don’t have those closed networks that are available in the ACA.
It’s very likely that what we’re going to see is a greater deal of interest in short-term medical, and you’re going to hear a lot more about it in the upcoming months.
F: Again, Jan Dubauskas with us, Chief Operations Officer, IHC Group, which as I understand it has three insurance carriers under your umbrella that provide health, life, disability, dental, vision, short-term medical, etc. So, in other words, this is something you actually sell as a product, correct?
D: Yes, this is a product that we sell today. We’re the leading carrier for it, among others. And it’s something that HHS is asking about and specifically said in their proposed rule that they’re expecting short-term medical carriers to see increased profits and revenues in 2019 when the individual mandate goes away and products are more widely discussed and more widely available. When people have choices, they may not choose ACA. This is a product that you can buy and have (inaudible) catastrophic coverage
The original intent of the ACA was to make sure that no one went uninsured. But, unfortunately, now with the prices—in some states it’s over $1,000 a month for an ACA plan—so it’s just not affordable. In 2018, 52% of counties have access to only one plan on their exchange, where short-term medical is widely available throughout the United States. We sell in 42 states. So there’s obviously going to be a lot more availability of it in 2019.
The other thing about short-term medical, to be fair, there are some criticisms of short-term medical in that it requires underwriting. And so someone has to be relatively healthy to be able to purchase the product.
And then there are pre-existing conditions, and so if you have a prior condition, then coverage for that is excluded. There is a new product coming out through IHC on our HealtheDeals.com website called [Connect Plus] where we’re going to be waving pre-existing conditions up to $25,000, and that product will be available starting on April 20, and that’s going to revolutionize the short-term medical market.
Up to this point, people really have been concerned, you know what if I break my arm and I want to get my cast off and my short-term medical plan would not cover that? Under [Connect Plus], then we’ll be able to cover things like removal of a cast; it would not be considered pre-existing.
So the concerns about short-term medical are actually going to reduce while people see the benefits improve and the price is going to remain much more affordable compared to an ACA plan. We’re excited for the future of short-term medical.
F: I do have to wrap up, but real quick. Is this, when you said transition between employers, is this different from COBRA?
D: Yeah, so COBRA is just your employer’s …
F: [Inaudible] the long answer, but I just want to quickly, it’s different?
D: It’s absolutely different. COBRA is an employer plan, and short-term medical is an individual plan you can buy yourself. Yep.
F: Understood. Got it. Alright, Jan, I do appreciate it. And if people want information, do you want to give them a website again. I know, like I said, you sell the product, but let’s face it, if people want to look around, they might as well shop.
D: They can go to HealtheDeals.com.
F: HealtheDeals.com. Jan Dubauskus, thank you for joining us on POTUS today.
D: Thanks for having us.
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