As "Young Invincibles" Examine Coverage Options, Many Opt Out of Obamacare
Young Adults Find More Affordable Coverage Outside Government Marketplaces
MOUNTAIN VIEW, CA--A study released today by AgileHealthInsurance.com shows that 26-year-olds with incomes between $27,015 and $75,630 would pay less for short term health insurance than Obamacare, even with subsidies and the uninsured penalty factored into the costs. Since short term health insurance plans are not qualified health plans under the Affordable Care Act, short term health insurance enrollees pay the Obamacare uninsured penalty unless they are among the millions that qualify for an exemption. Yet, short term health insurance plans usually have much lower premiums than Obamacare, meaning that enrollees still see cost savings even with the penalty.
When factoring in premium subsidies and the uninsured penalty, term insurance had the greatest cost advantage over Obamacare at household incomes near $38,000. For a 26-year-old female with a household income of $38,250, the least expensive term insurance plan was $67.80 less expensive per month than the least expensive subsidized Obamacare bronze plan. For a 26-year-old male with the same household income, term insurance was $73.50 less expensive per month.
"The unintended consequence of requiring one-size-fits-all benefits for Obamacare plans is that they become very expensive," said Sam Gibbs, executive director of AgileHealthInsurance.com. "For millennials who don't use those expensive benefits, term health insurance provides a compelling and more affordable solution."
The cost advantages of term health insurance may prove to be particularly attractive to 26-year-olds leaving their parents' health coverage, given the age group's general trend towards good health and fewer pre-existing conditions. Ideally, any health plan decision should be informed by a consumer's health considerations and anticipated benefit needs. When choosing a plan, it's important for consumers to consider not only premiums, subsidies and penalties, but also out-of-pocket costs, including deductibles and coinsurance fees.
Term health insurance plans are a compelling alternative for dissatisfied Obamacare consumers who struggle with the cost of those plans. Term insurance plans have broader provider network coverage than most Obamacare plans, so enrollees can go to most doctors and still be covered. Out-of-network coverage is available in 100 percent of term insurance plans sold on AgileHealthInsurance.com.
Term health insurance represents a distinct category of health insurance and does not provide identical coverage as Obamacare plans, and benefit and eligibility differences contribute to the cost savings observed. Consumers apply and, depending on their health status (including pre-existing conditions), they may or may not be eligible for specific plans. Consumer applications are approved or rejected based on health status (including the nature of pre-existing conditions). Additionally, with short term health insurance, consumers may still be subject to the Obamacare Tax unless they qualify for one of several exemptions. The cost of short term health insurance is so affordable that even for some consumers facing the tax penalty, the combination of penalty and premium is still less expensive than an unsubsidized Obamacare premium. Read the article on AgileHealthInsurance's Learning Center.
AgileHealthInsurance.com is a Silicon Valley-based technology company and independently managed division of Health Insurance Innovations, Inc. (NASDAQ: HIIQ). This press release contains "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements other than historical fact, and may include statements relating to goals, plans and projections regarding new markets, products, services, growth strategies, anticipated trends in our business and anticipated changes and developments in the United States health insurance system and laws. Forward-looking statements are based on our current assumptions, expectations and beliefs are generally identifiable by use of words "may," "might," "will," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential" or "continue," or similar expressions and involve significant risks and uncertainties that could cause actual results, developments and business decisions to differ materially from those contemplated by these statements. These risks and uncertainties include, among other things, our ability to maintain relationships and develop new relationships with health insurance carriers and distributors, our ability to retain our members, the demand for our products, the amount of commissions paid to us or changes in health insurance plan pricing practices, our ability to integrate our acquisitions, competition, changes and developments in the United States health insurance system and laws, and our ability to adapt to them, the ability to maintain and enhance our name recognition, difficulties arising from acquisitions or other strategic transactions, and our ability to build the necessary infrastructure and processes to maintain effective controls over financial reporting. These and other risk factors that could cause actual results to differ materially from those expressed or implied in our forward-looking statements are discussed in HIIQ's most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) as well as other documents that may be filed by HIIQ from time to time with the Securities and Exchange Commission, which are available at www.sec.gov. Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. You should not rely on any forward-looking statement as representing our views in the future. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.