What the Growth of the Term Health Insurance Market Means for Providers
A recent study indicates that temporary health insurance plans will become increasingly popular over the next few years. ExpertInsuranceReviews.com Health insurance expert Melanie Musson urges insurers to develop plans to meet this area of growing demand.
Term insurance is an important bridge between traditional health insurance plans. Insurers looking to capitalize on a growing market should consider adding temporary health insurance options to their list of available plans.
Why should temporary health insurance plans gain popularity?
According to InsuranceNewsNet.com, recently released data indicates strong growth expected for term insurance plans.
Health care is expensive and these rising health care costs are passed on to insurers contracted to pay claims. Then, the insurers’ costs are passed on to the consumer through higher premiums.
Many consumers simply cannot afford a traditional health insurance plan. Others may have missed out on open healthcare market enrollment and need something to protect them from potentially catastrophic healthcare costs. And others may be between two employer-sponsored health plans and are looking for a health plan to bridge the gap.
As in the health insurance sector, temporary car insurance policies have not been an option historically. If someone needed car insurance for a short period of time, they would have to purchase a traditional six-month or annual policy, cancel it as needed, and wait for a refund.
But car insurance providers are starting to offer plans to meet consumer demand, and health insurance providers are following suit.
How can temporary health insurance plans benefit providers?
Temporary health insurance plans require providers to assume minimal risk. Since term plans do not have to comply with Affordable Care Act guidelines, they can exclude pre-existing conditions and there is no requirement to cover 100% preventative health care.
Note that even ACA-compliant companies face changing guidelines regarding preventive care.
Short-term plan providers may also price their plans based on age and medical history. This freedom allows them to set rates that reflect individual risk.
Consumers interested in short-term plans are not looking for traditional health insurance coverage; they are looking for something to protect them from financial collapse if they experience a catastrophic change in their health.
Since the risk of catastrophic health problems is low for most individuals, insurers can assume this risk without significant risk of financial loss.
Insurance companies committed to thinking outside the box and evolving with society should consider temporary health insurance options to meet the expected increase in demand.