The “gig” economy is flourishing. Approximately 57 million people in the United States do not have traditional full-time jobs but instead, have an “alternative” work arrangement. By 2020, it is estimated that 40% of U.S. workers will be independent contractors in some form, from ride-share drivers to freelancers. Without a traditional employee group benefits package to depend on, these solopreneurs will need to buy health insurance on their own.
Short term health insurance can be a win-win alternative for individuals looking for budget-friendly coverage without the permanency of health insurance through the federal or state exchanges. Short term medical plans are temporary plans that can be purchased for just 30 days, but can also have more extended terms for nearly a year or consecutive years in some states. They fit a lifestyle that is in flux without tying down someone working multiple jobs. That’s just a few reasons why short term health plans will be big business in 2020 and beyond.
The National Association of Insurance Commissioners recently reported that at the end of 2017, about 122,000 Americans were enrolled in short-term medical plans. Federal actuaries now estimate 600,000 more people might purchase short term health insurance coverage in 2019 because regulations surrounding the plans have been loosened by the current administration – and federal courts have backed the rule up. That means come open enrollment time, short term health insurance will be a viable contender next to more costly ACA plans.
Consumer Advantages of Buying Short Term Health Insurance
- Control. When consumers buy health insurance on their own they can move between part-time jobs, try new gigs and not lose coverage. What they purchase on their own is theirs to keep.
- Choice. Individuals can pick the health insurance company they want to work with, not what their employer requires them to use. There are several marketing organizations in the short term medical space that allow consumers to compare plans side-by-side to make the most informed decisions about their potential purchase.
- Network. Whether a PPO network or an open, all-access network, many short term health plans offer network options that work for consumers in both urban and rural areas without the worry of not being able to either keep a current doctor or find a doctor close to home.
- Variety. Not all short term health insurance plans are created equal. Some “lite” plans offer coverage for everyday medical expenses like doctor office visits, but not as much coverage for inpatient hospitalizations or surgeries. More robust plans can offer doctor office visit copays, prescription drug coverage and even preventive care. Again, choice and flexibility are the name of the game when it comes to short term medical plans.
Innovation Is Leading The Wave
Even though elected officials are struggling to create a consistent, relevant road map to guide change, the health insurance market is evolving. A record $2.5 billion was invested in U.S. insurance startups in 2018. Companies are finding new and innovative ways to connect consumers and agents to products like short term health insurance, fixed indemnity and supplemental plans online. Many startups are making meaningful changes to improve access and choice while lowering costs. These modernizations are also making open enrollment easier for agents to enroll clients and easier for clients to better understand what they are signing up for.
One outcome of the Affordable Care Act was the reduction of the uninsured. Consumers have proven they want health insurance coverage, but in an economy ever in motion, it has to be on their terms and on a budget they can afford. One size does not fit all and the demand for tailored insurance solutions will accelerate as America transitions to a bigger and better economy full of workers in alternative careers.