Study: Insurance brokers express skepticism about alternative coverage 

A paper reading 'short term health insurance'
Researchers at Georgetown surveyed insurance brokers about the state of the market. (Getty/designer491)

Insurance brokers give alternative coverage, such as short-term health plans, a mixed review, according to a new study. 

Researchers at Georgetown University conducted interviews with 18 brokers in seven states and found that while brokers in some states viewed short-term plans favorably, many expressed concerns about the benefits available in such plans. 

“I’m apprehensive to sell them,” one Iowa broker told the research team. “I don’t want someone to get into a limited plan and then...develop cancer.” 

The Trump administration expanded the length of short-term plans to up to 12 months in mid-2018, though state policies on length do vary. Critics of these plans deride them as “junk” coverage, as they’re not required to meet coverage standards laid out in the Affordable Care Act. 

RELATED: Study—Consumers don’t understand short-term plans 

The brokers expressed skepticism about these types of coverage despite often earning a higher commission for them, according to the study. 

Due to the skimpier coverage, some brokers did say there were notable affordability challenges for people who enroll in these plans. However, short-term plans aren’t for everyone, and can be a good option for healthier people, the brokers said. 

One broker, who works in a state where these plans are limited to six months, said she suggests people enroll in ACA-compliant individual market plans for the first half of the year and then in a short-term plan in the latter half of the year. This both allows them six months of more comprehensive coverage and can avoid adverse selection on the exchanges, she said. 

There were also interviewed brokers who said they preferred the older three-month length of such plans, as they offered an effective stopgap for people who lose coverage without becoming a more permanent solution. 

A broker from Mississippi told the researchers “that product was a lifesaver for a lot of people.” 

RELATED: State approaches to short-term, association health plans vary, experts say 

The interviewed brokers largely expressed similar skepticism about other types of alternative coverage, such as healthcare sharing ministries and association health plans. 

None of the brokers said that healthcare sharing ministries were marketed in any significant way in their states, but also said they were unlikely to sell such products as they’re not actually insurance.  

Association health plans, meanwhile—which were also expanded by the Trump administration—have a “long and sordid history,” many of the brokers said. It’s not uncommon for them to go bust or ultimately be a scam. 

“The problem is that they inevitably collapse in a death spiral,” a Mississippi broker said. “Everyone loves them initially, but as claims come in, premiums increase, healthy individuals jump off for greener pastures and you go broke.” 

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