Health Insurance Innovations will probably generate less than $160 million in sales revenue this year, but its core product frightens the U.S. Department of Health and Human Services so much that HHS recent developed a regulation to slow sales of the product.
The Tampa, Florida-based web broker sells a number of health insurance and supplemental health insurance products, but it’s best known as a distributor of short-term health insurance policies, or policies that cover an insured’s medical care for less than a year at a time.
Executives at the company say they will try to cope with HHS efforts to curb short-term health insurance sales by promoting another “gap filler” product: limited medical indemnity insurance policies that pay a fixed amount of benefits when covered events occur.
Patrick NcNamee, the company’s chief executive officer, said the market for the indemnity coverage includes people with high major medical deductibles as well as people with no major medical coverage.
Because of that, “the market opportunity may be even greater than for short-term medical,” McNamee said today during a conference call with securities analysts that was streamed live over the web.
Health Insurance Innovations held the call to go over third-quarter results.
The company reported $5.1 million in net income for the quarter on $46 million in revenue, up from $1.5 million in net income on $26 million in revenue for the third quarter of 2015.
Sales of short-term health products have been especially strong because “people can’t afford health insurance, and they need it and want it,” McNamee said.