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Non-PPACA plan seller tells all

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Health Insurance Innovations Inc. (HII) is one of the companies giving outsiders a pinhole view of what’s really going on in the U.S. health insurance market.

HII (Nasdaq:HIIQ) is a publicly traded company that focuses mainly on developing, finding and distributing short-term health insurance, hospital indemnity insurance and other products outside the scope of the Patient Protection and Affordable Care Act (PPACA) major medical product design and marketing rules.

While weary PPACA public exchange managers let Web disclosures slide in some states, and the U.S. Department of Health and Human Services (HHS) keeps a tight grip on data for the states, HII puts its executives on conference calls with securities analysts every quarter.

See also: Distributor of PPACA-free products posts big sales gains

HII is reporting $256,000 in net income for the first quarter on $23 million in revenue, up from a net loss of $248,000 on $18 million in the first quarter of 2014.

The number of policies in force increased 19 percent, to 102,000. Of those, 31,000 of the policies were short-term health policies; 15,000, hospital indemnity policies; and 56,000, other types of policies.

The number of call centers in the HII distribution network increased to 112, from 97, and the number of licensed brokers in the network increased to 17,800, from 14,000.

Spending on sales commissions increased to $11 million, from $8.9 million.

For a look at what Michael Kosloske, HII’s president, and other company executives said about the non-PPACA health product market, read on.

1. really did do a better job of serving its customers.

In late 2013 and early 2014, during the first PPACA open enrollment period, and many state-based exchange enrollment systems had serious technical problems.

Many market watchers said the exchange systems worked much better during the second open enrollment period, but some said many exchanges continued to perform poorly.

Michael Hershberger, HII’s interim chief financial officer, is siding with the market watchers who say the exchange systems worked better.

“This time around, it was a much smoother process,” Hershberger said. “The smoother that process is, the more unfavorable it is to us.”

See also: 5 PPACA open enrollment nightmares


2. Regulators and insurers have an incentive to keep making the major medical open enrollment period shorter.

In 2014, the first open enrollment period started Oct. 1, 2013, officially ended March 31, 2014, and seemed to drag on through broad, unofficial extensions through most of the country until sometime in the distant future.

This year, the second open enrollment period started Nov. 15, 2014, and officially ended Feb. 15. Many states offered a special “tax season” enrollment period that ended April 30.

See also: Insurers and PPACA exchanges do enrollment time warp again

For 2016, officials say the enrollment period will start Nov. 1, 2015, and end Jan. 31, 2016.

Widespread access to the tax season enrollment period hurt HII, but reducing the number of would-be health insurance buyers shut out of the regular major medical market, HII executives said.

But HII executives said they think insurers and insurance regulators have a strong incentive to stop offering long, broad enrollment extensions.

“The longer that open enrollment period is, the bigger the chance for anti-selection is,” Kosloske said.


3. Agents and brokers may be paying more attention to the major medical enrollment period calendar, even for products not subject to the open enrollment period rules.

In theory, agents and brokers can sell HII products whenever they feel like it and consumers want to buy the products.

In the real world, HII executives said, the same agents, brokers and call centers that sell HII products usually sell major medical products, too, and they focus on selling the PPACA products while the open enrollment period is under way.

See also: PPACA nap period: Can you get special?


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