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‘Special’ medical market could be big

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The new individual coverage “open enrollment period” system could be more of scarecrow than a sales killer.

At least that’s what health insurance industry marketing veteran Jeff Smedsrud thinks.

Smedsrud, the former chief marketing officer at Independence Holding Co., recently took over as the chief executive officer at HealthCare Inc.

The individual major medical coverage open enrollment season started Oct. 1 and is supposed to end in most of the country March 31.

But PPACA makes routine access to “special enrollment periods” available to consumers who go through the major life changes, such as the loss of a job or the birth of a child, and consumers can also apply for hardship exemptions.

Smedsrud said the “special enrollment period” could be a great new market.

“Nobody knows how big it is,” Smedsrud.

Smedsrud said he thinks the market could end up being about one-third to as much as one-half the size of the open enrollment period market.

HealthCare and predecessor companies have been the proud owner of the website since 2006. Managers once focused on the local provider lead-generation market but are now trying to focus more on the health insurance market.

The site will give consumers information they can use to shop for major medical plans available elsewhere, and also try to sell those consumers the company’s own private-label supplemental health insurance plans.

The Patient Protection and Affordable Care Act now requires carriers in the individual market to sell coverage on a guaranteed-issue basis. The only individual health factor carriers can use to adjust rates is age.

The U.S. Department of Health and Human Services and state regulators have tried to discourage consumers from waiting until they get sick to pay for coverage by limiting the period when they can automatically qualify to buy coverage.

Some brokers have wondered what they will be able to offer consumers from April 1 through Nov. 15, when the 2015 open enrollment period is tentatively scheduled to begin.

Under current rules, carriers and brokers will be able to sell short-term medical insurance during the regular major medical market hiatus.

“That’s not necessarily a bad solution,” Smedsrud said.

Because HHS has exempted short-term medical products from the PPACA rules that apply to major medical coverage, short-term medical issuers can still use medical underwriting.

That can make the product expensive and difficult to get for older applicants, but much cheaper than unsubsidized major medical coverage for young, health applicants, according to short-term medical market studies.

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