AgileHealthInsurance Survey | 02-18-2015

Surveys Find Lack of Consumer Awareness of Term Health Insurance & Its Affordability

With the Annual Enrollment Period for Affordable Care Act (ACA) insurance now closed, consumers who still want ACA (also called Obamacare) plans must have a special life event to be able to enroll off-season. Otherwise, they must wait for the next annual enrollment period to apply for coverage that will begin no earlier than January 1, 2016.1

However, consumers still have the option of applying for Term Health Insurance, a short-term health insurance option that consumers can apply for any time during the year. In the interest of determining consumer awareness of Term Health Insurance products, we conducted a nationwide survey of over 1,000 adults and asked “Are you aware of term health insurance as an alternative to Obamacare?” 61% of respondents answered “no.”

Interestingly, respondents from the Lone Star state did not reflect the national answer trend. In fact, they were a polar opposite with respect to their responses. 64% of Texans answered that they were aware of term health insurance as an alternative to Obamacare.

With more than 50% of respondents unaware of Term Health Insurance as an alternative to Obamacare, it was not surprising that a separate nationwide survey found that only thirty percent of adults realized that Term Health Insurance is less expensive than Obamacare. In response to the question “How do the premiums of term health insurance compare to the premiums of entry-level Obamacare plans?” only three out of ten responded “less expensive.” Yet, as a separate study by AgileHealthInsurance shows, on average Term Health Insurance premiums are dramatically lower than premiums for entry-level Affordable Care Act plans.

Among survey respondents, women were more likely than men to believe that Term Health Insurance and entry-level Obamacare plans were roughly the same cost. 43% of female respondents answered “about the same cost” compared to 31% of male respondents. Respondents in the western US were most likely to think Term Health Insurance was more expensive than an entry-level Obamacare plan; 37% of respondents from this region answered “more expensive” to the question. In comparison, only 27% of respondents from the northeast were least likely to answer “more expensive.”

With consumers facing an application ‘lock-out’ between Obamacare Annual Enrollment Periods, insurers offering Term Health Insurance face the task of not only promoting their products, but also educating consumers on this category of health insurance. That education will need to encompass costs, benefits, and the consumer profiles best served by Term Health Insurance.

METHODOLOGY

The first survey’s results are based on 1,078 responses to a nationwide online survey conducted from January 30, 2015 to February 1, 2015. Respondents were asked, "Are you aware of term health insurance as an alternative to Obamacare?" Respondents had the option of selecting one of the following two answers: “Yes” or “No.” The answer options were displayed in randomized order across respondents. The survey was displayed within a network of over 100 different news web sites and other content sites. Demographic inferencing and methodology to acquire survey respondents who approximate national statistics on age, gender, income, and region was performed by Google-administered technology. Race, education, and health insurance status were not examined. Margin of error across survey responses is estimated at +3.2/-3.2.

The second survey’s results are based on 1,097 responses to a nationwide online survey conducted from January 30, 2015 to February 1, 2015. Respondents were asked, " How do the premiums of term health insurance compare to the premiums of entry-level Obamacare plans?" Respondents had the option of selecting one of the following three answers: “More expensive,” Less expensive,” and “About the same cost.” The answer options were displayed in randomized order across respondents. The survey was displayed within a network of over 100 different news web sites and other content sites. Demographic inferencing and methodology to acquire survey respondents who approximate national statistics on age, gender, income, and region was performed by Google-administered technology. Race, education, and health insurance status were not examined. Margin of error across survey responses is estimated at +3.0/-2.7.

  1. See the government’s discussion of Special Enrollment Periods. https://www.healthcare.gov/glossary/special-enrollment-period/ Last accessed February 11, 2015">

AFFORDABLE CARE ACT TAX. Term health insurance is health insurance outside of the Affordable Care Act ("Obamacare"). It does not include all ten of the minimum essential benefits of Obamacare and it does not cover pre-existing conditions. To learn more about the tax, its exemptions, and how to calculate the affordability of term health with the tax, see here. To learn more about the differences between Term health insurance and Obamacare, see here.