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TMCNet:  Best's Briefing: Short-Term Health Plans Presents Growth Potential for Some Insurers

[August 10, 2018]

Best's Briefing: Short-Term Health Plans Presents Growth Potential for Some Insurers

The U.S. Department of Health & Human Services' final rule on short-term, limited-duration medical products should have a positive impact on insurers that offer these policies, as these carriers will likely see top-line growth through increased sales in this business line, according to a new A.M. Best briefing.

The Best's Briefing, "HHS Rule Expands Coverage Period for Short-Term Plans," notes that among the finalized changes, the definition of a short-term policy - one that is less than 12 months - stays intact, but the coverage may be renewed for up to 36 months without re-underwriting the individual covered by the policy. A.M. Best believes that the longer duration of the policies and the inability to re-underwrite at renewal may result in higher rates than that seen on the current policies with 90-day duration limits, although the cost of these policies is expected to remain well below an Affordable Care Act-compliant policy.

According to the briefing, many carriers that offer shor-term medical plans also sell supplemental benefits, such as hospital indemnity and accident insurance. Buyers of the short-term medical policies also may purchase these supplemental products, adding to the likelihood of premium growth. The potential to keep short-term medical clients for longer periods also may provide additional revenue and reduce acquisition costs. Ultimately, the greatest potential for uptake of short-term medical products in 2019 are purchases by healthier individuals who are not Affordable Care Act-subsidized, or by individuals that do not currently have coverage.

To access the full copy of this briefing, please visit

A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry. Visit for more information.

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