Priced Out of ACA Plans, Millennials Seek More Affordable Health Insurance Options
New Study Quantifies Double-Digit Premium Savings Driving Growth in Short Term Health Insurance Market
MOUNTAIN VIEW, CA-- As premiums for Obamacare plans continue to rise, millennials are seeking more affordable options in the term health insurance market. A study released today by AgileHealthInsurance.com quantifies the double-digit savings driving this trend.
Average premiums for Obamacare exchange plans increased by double digits from 2015 to 2016. Bronze plans, which are generally the least expensive type of Obamacare plan, had premium hikes of 11 percent in 2016. Given that term health insurance premiums were substantially less expensive than unsubsidized premiums for Obamacare bronze plans in the 2015 plan year, AgileHealthInsurance examined premiums for term health insurance and Obamacare plans to determine how prices compare for 2016. The analysis compared only term plans with lower deductibles and out-of-pocket caps than the average bronze plan.
On average 30-year-olds would pay 28 percent less for their term health insurance than for an Obamacare bronze plan, even when the cost of paying a penalty is included. Term health insurance plans are not qualified health plans under the Affordable Care Act so enrollees in term insurance plans have to pay the Obamacare uninsured penalty unless they qualify for an exemption. However for younger enrollees, term insurance combined with the cost of the uninsured penalty is still considerably less expensive than Obamacare. For a household income of $20,450, a 30-year-old male paying the uninsured penalty would save $76 a month with term insurance and a 30-year-old female would save $47 a month.
"Young people are savvy when it comes to buying health insurance, especially when shopping online," said Sam Gibbs, executive director of AgileHealthInsurance.com. "As some millennials struggle to afford Obamacare premiums, they are doing their homework and finding term health insurance often makes financial sense, even if they aren't exempt from the uninsured penalty."
Premiums were collected for male and female non-smokers ages 30, 40, and 50 in the most populous city in each of the 38 states that will use HealthCare.gov in 2016. Average premiums for Obamacare bronze plans were compared to average premiums for term insurance plans available on AgileHealthInsurance.com.
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 term health insurance, consumers may still be subject to the Obamacare Tax unless they qualify for one of several exemptions from the tax. The cost of 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.