The Affordable Care Act public exchange system has been having public supply problems, and carriers in the private health insurance product distribution system have been facing challenges of their own.
Many of the state-based ACA exchange programs publish detailed budget and financial performance information.
Information about private distributors and “Web-based insurance store” builders tends to be harder to find. The companies may be the players with the results most directly aligned with those of traditional brick-and-mortar insurance agents and brokers.
For a look at what Health Insurance Innovations, Connecture and Benefitfocus are seeing, read on:
Health Insurance Innovations executives see consumers resisting the ACA open enrollment period system. (Image: Thinkstock)
1. Health Insurance Innovations
Health Insurance Innovations, a company that sells short-term medical insurance, dental insurance, indemnity health insurance, and other health-related products that fall outside the scope of the ACA major medical coverage benefits and underwriting rules, is facing a strange problem: Short-term health products have been selling so well that federal regulators see the products as a potential threat to the stability of the ACA public health insurance exchange system, and of the individual major medical insurance market.
Federal regulators, state regulators, ACA exchange program managers and insurers developed an “open enrollment period” system, or limits on when people can apply for major medical coverage without showing they have a good excuse to be applying for coverage, in an effort to keep healthy people from using the new ACA ban on medical underwriting as a chance to pay health insurance premiums only when they know they will be sick.
Some consumers have been using the kinds of short-term health products Health Insurance Innovations sells for periods of up to almost a year.
Patrick McNamee, Health Insurance Innovations’s chief executive officer, said the company is still hoping federal regulators will give up trying to put new curbs on short-term medical sales.
“There’s been significant stakeholder pushback,” McNamee said during a conference call with securities analysts that was streamed live on the Web.
Health Insurance Innovations has found that consumers are extremely sensitive to price, frustrated with the cost and features of ACA-compliant major medical products, and not at all in sync with the ACA open enrollment period calendar, McNamee said.
Thanks in part to strong “nap period” demand for short-term health insurance, Health Insurance Innovations is reporting $4.8 million in net income for the second quarter on $44 million in revenue, up from a net loss of $165,000 on $23 million in revenue for the second quarter of 2015.
Adoption of private exchange technology has been slower than Connecture had expected. (Image: Thinkstock)