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AgileHealthInsurance Report | 2017-07-18

Limited Medical Leads in Consumer Awareness of Obamacare Alternatives

Limited Medical had twice the consumer awareness of short-term medical insurance and three times the awareness of Healthcare Sharing Ministries

With the announcement from the Centers for Medicare & Medicaid Services that there is 38 percent fewer health plan rate filings for Affordable Care Act (ACA) exchanges in 2018 versus 2017, many consumers across the nation will be faced with fewer ACA insurance choices or, in some counties, no choices. A decline in exchange choices may worsen the ability of consumers to find health insurance that combines an affordable monthly premium with an affordable deductible. Since this environment may lead some health insurance buyers to explore alternative coverage that either replaces ACA as primary health coverage or combines with an ACA plan to lower out-of-pocket costs, AgileHealthInsurance conducted a nationwide poll that asked "What private health insurance (or health coverage) options are you familiar with OTHER than Obamacare?" Respondents could select one or more of the following options: short-term medical insurance, Healthcare Sharing Ministries coverage, Limited Medical, or none of the above (a "none of the above" answer could not be selected along with another answer).

Most Americans receive their health insurance either from an employer or from a government program such as Medicare or Medicaid. With regard to the remaining privately-purchased health insurance options, below is a brief overview.

  • Affordable Care Act (Obamacare) insurance is a comprehensive major medical insurance that can be purchased on a government marketplace (exchange) or directly from an insurer or broker. These plans have 10 standard categories of benefits (e.g. ambulatory care, maternity care, etc.)
  • Short Term Medical Insurance is limited duration major medical coverage typically used to fill temporary gaps in health insurance coverage. short-term medical plans include coverage for doctor and specialist visits, hospitalization, emergency care, lab tests, and other healthcare
  • Healthcare Sharing Ministries plans are technically not insurance but do provide major medical benefits similar to insurance plans. As is the case with traditional insurance, there are deductibles and copays for covered healthcare services
  • Limited Medical is a relatively new name for a combination of established indemnity and non-indemnity products (e.g. hospital insurance, telemedical services, prescription drug discounts, etc.) that can be used alongside a major medical plan to lower medical out-of-pocket costs and/or to help offset lost income due to an illness

The poll was conducted in July 2017 and 1,288 adults participated nationwide producing 1,346 answer selections.

Obamacare, ACA, alternatives

For those respondents who were familiar with non-Obamacare alternatives, Limited Medical was the most well known option. 17 percent of survey respondents indicated they were aware of Limited Medical. Seven percent were aware of short-term medical insurance. Five percent were aware of Healthcare Sharing Ministries coverage. Taken together, the combined awareness for short-term medical insurance and Healthcare Sharing Ministries did not equal the awareness for Limited Medical. Considered separately, Limited Medical had twice the consumer awareness of short-term medical insurance and three times the awareness of Healthcare Sharing Ministries.

Limited Medical’s name recognition may benefit from consumers associating this phrase with other coverage such as pre-reform individual/family health insurance. Another potential factor is that Limited Medical packages together health products that have already been in the marketplace for decades.

Limited Medical product category is assuming greater relevance due to multiple market conditions. First, and most important of these conditions, is the lack of consumer relief for high health insurance out-of-pocket costs. For example, consumers ineligible for subsidies face a single coverage deductible that averages over $6,000 for entry-level bronze plans on an exchange with that amount exceeding $12,000 for bronze family deductibles according to a HealthPocket study on 2017 ACA plans. A secondary factor contributing to the increased relevance of health benefit plans is their ability to be used in conjunction with any of the insurance options mentioned in the poll (ACA, short-term medical insurance, Healthcare Sharing Ministries) as well as with employer-based coverage. This compatibility with a diversity of coverage options maximizes the number of consumers who can potentially purchase these plans.

CONCLUSION

While the health insurance market continues to evolve, the lack of collaboration between America’s major political parties may prolong the problems consumers face when shopping for health coverage that combines affordable premiums and affordable out-of-pocket costs. Should that be the case, market solutions such as health benefit plans will continue to gain popularity.

METHODOLOGY

Results are based on 1,288 respondents to a nationwide survey conducted from July 5, 2016 to July 7, 2016. The survey asked respondents, "What private health insurance (or health coverage) options are you familiar with OTHER than Obamacare?" Respondents had the option of selecting one or more of the following four answers: "Healthcare Sharing Ministries coverage," "short-term medical Insurance," "Limited Medical" and "None of the Above." If the user selected "None of the above" than no other answer could selected alongside this answer. The answer options were displayed in randomized order across respondents.

The survey was displayed within a network of over 100 different news websites 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 +2.1/-2.2.