The Patient Protection and Affordable Care Act (PPACA) seems to be changing the core market for short-term medical insurance.
Ten years ago, the obvious prospects were young people who were fresh out of college and workers who had lost their jobs and were horrified by the cost of COBRA continuation benefits.
One of the first major PPACA provisions that took effect bit into the core short-term medical market by requiring plans that offer dependent benefits to let enrollees keep children on the plan up until age 26.
Today, the new PPACA insurance underwriting rules, subsidies and public exchange system are supposed to give all consumers, including consumers with health problems, an easy way to buy affordable health insurance on a guaranteed-issue basis.
PacificSource, an Oregon insurer, was one of several health insurers that saw the PPACA young adult dependent coverage provision as a reason to flee from the short-term medical market. “We believe the demand for short term medical products will be significantly reduced or eliminated by health care reform changes,” the company said in a bulletin addressed to agents.