Survey: Older adults more likely to be drawn to short-term plans

Document titled, Affordable Care Act
Older adults are more likely to choose short-term plans over ACA plans. (Getty/Designer491)

Older enrollees are more likely than younger ones to consider short-term insurance over Affordable Care Act (ACA) plans, according to a new survey by eHealth.

And it seems affordability and longer durations are the primary reason these people are choosing such plans. Specifically, 70% of respondents ages 55 to 64 cited affordability as their top reason for selecting short-term coverage versus 53% of adults ages 18 to 24. 

And cost is still more important than the scope of the insurance coverage. According to the survey, 88% of older adults, and 78% of younger adults, say they value affordable monthly premiums more than comprehensive coverage, according to the survey (PDF). 

In addition, most of the older respondents, 64%, sought coverage for seven months or longer, versus 56% of younger respondents intending coverage for no more than six months. 

"When the 90-day coverage limit was rescinded last year and people could suddenly buy short-term plans with policy terms of up to a year, the common wisdom said that young people would treat short-term as a less-costly alternative to ACA," Lisa Zamosky, senior director of consumer affairs at eHealth, told FierceHealthcare. "Our survey findings contradict that. While it may be true, in terms of raw numbers, that more young people choose short-term, they choose short-term coverage for different reasons. Older consumers are more likely than younger ones to see short-term plans as an affordable alternative to ACA coverage."

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Overall, respondents seemed happy with their short-term coverage. More than nine out of 10 people said they were satisfied with their short-term plan, with 40% being very satisfied and 51% being somewhat satisfied. And wealthier enrollees, those in households making greater than $100,000 a year, were most likely to be satisfied with short-term benefits. 

Respondents between the ages of 35 and 44 were more likely to say that comprehensive benefits were more important than affordable premiums.

But ACA plans were considered by 61% of all survey respondents before choosing to buy a short-term plan instead. And specifically by age, respondents ages 35 to 44 were most likely, 69%, to consider an ACA plan before choosing a short-term plan. 

So what do these results tell us about the choices being made? Zamosky notes that the cost of coverage for an ACA plan increases significantly as a person gets older.

"If you’re a middle-income individual age 55 to 64 who doesn’t qualify for ACA subsidies, you could be paying two-to-three times more for your ACA plan than someone in the 18 to 24 age range," she said. "Many of these older folks may simply be unable to afford ACA coverage on their own, but they don’t want to go entirely uninsured—so they turn to short-term plans to provide them with a measure of coverage in case of unexpected illness or injury."

And cost continues to be the top issue.

Zamosky notes that many people cannot afford to buy ACA coverage, and that’s what may be driving many consumers into the short-term market. The average monthly premium for an ACA plan purchased at eHealth during the last open enrollment period was $448 for an individual, and it can be hundreds of dollars more per month for someone over the age of 55. In comparison, short-term coverage costs between one-quarter and one-third of this price. 

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She also suggests that insurance companies interested in attracting older adults with short-term health insurance products may want to consider adding 36-month renewable plans to their offerings. In addition, coverage for things that older consumers value, like prescription drugs or certain preventive care services, might also prove attractive.

"Insurers will have to be careful, however, that they don’t move the price point up too high on these products or else more of these folks may end up priced out and totally uninsured," she said. 

Findings from the eHealth survey conclude that short-term plans are taking a strong place in the healthcare market. 

"They’re not just about filling temporary gaps in coverage anymore," Zamosky said. "With longer policy terms available and with the repeal of the tax penalty for not having ACA coverage, more consumers (and especially older consumers) are seeing short-term as a viable 'Plan B.' Unless something is done to bring down the cost of coverage in the ACA market for more consumers, the trend may continue."