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Short-term medical seller preps for April 1

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A short-term medical (STM) insurance distributor is expecting new Patent Protection and Affordable Care Act (PPACA) market rules to drive business its way throughout the coming year.

Executives at Health Insurance Innovations Inc. (Nasdaq:HIIQ) talked about PPACA’s role as an STM marketing driver today during a conference call with securities analysts.

Health Insurance Innovations — a well-established company that went public in February — held the call to review its earnings report for the fourth quarter of 2013.

The company is reporting a $592,000 net loss on $16 million in revenue, compared with $674,000 in net income on $11 million in revenue for the fourth quarter of 2013.

The company ended the year with policies covering 73,686 people in force, or 15,568 more people than the policies were covering a year earlier.

The new PPACA public health insurance exchanges started their open enrollment season for individual “qualified health plan” (QHP) coverage Oct. 1. The 2014 individual QHP enrollment period is supposed to end March 31.

Exchange enrollment system glitches, and PPACA effects on individual commercial health insurance list prices inside and outside the exchange system, definitely helped application volume and sales in the fourth quarter, Mike Kosloske, Health Insurance Innovation’s president, said during the conference call.

Late last year, some STM brokers predicted that sales would slow once the public exchanges overcame the enrollment system glitches.

During the conference call, Kosloske said he thinks the individual QHP enrollment period system could give STM sales a big boost in the spring and summer.

The U.S. Department of Health and Human Services (HHS) and state regulators developed the open enrollment system calendar to keep consumers from waiting until they get sick to buy coverage.

Exchange managers could find ways to extend the 2014 QHP open enrollment period past March 31.

But, once the open enrollment period ends, moderate-income consumers who have not bought QHP coverage and do not qualify for a special enrollment period may have no way to get federal premium subsidies for the QHP coverage until Nov. 15, when the 2015 QHP open enrollment period starts.

B. Ronnell Nolan, a Baton Rouge, La., broker and president of Health Agents for America, an agent PPACA survival group, said in an interview that her understanding is that, at least in states with exchanges run by HHS, no insurers will be selling conventional individual major medical coverage to consumers who fail to qualify for special enrollment periods while the public exchanges are closed.

During the April 1-Nov. 15 exchange hiatus, short-term medical may be one of the few affordable products that 300,000 health insurance agents and brokers have to offer consumers who failed to buy coverage during the open enrollment period, Kosloske said.

“And we have consumer-friendly, reliable technology,” Kosloske added.

Health Insurance Innovations is trying to go after the benefits market as well as the individual market, by offering its STM enrollment system as a tool for employers that want to drop group health insurance plans and have employees get insurance from the individual exchange system. 

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