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In this series of posts, e123 President Brendan McLoughlin will explore how the incoming Trump administration may impact the health insurance landscape, and the measures health insurance marketers should take to prepare for this new reality.
Part 1: Short-Term Medical
In his second term, Donald Trump’s administration could bring sweeping changes to short-term medical (STM) insurance—a market known for its affordability but fraught with controversy. For health insurance marketers, STM could become a game-changer or a minefield, depending on how these anticipated changes unfold. Let’s dive into what might happen and how you can prepare.
The Short-Term Medical Landscape: Then and Now
STM plans have always been a mixed bag: they offer a budget-friendly option for consumers needing temporary coverage but lack the comprehensive protections of ACA-compliant plans. These policies often omit essential health benefits like maternity care and mental health services, and they can deny coverage for pre-existing conditions.
During Trump’s first term, his administration expanded STM plan durations from 3 months to 12 months, with renewals lasting up to 3 years. For insurers, this opened up new market opportunities. Critics, however, argued that these plans siphoned healthy individuals out of ACA marketplaces, destabilizing risk pools and driving up premiums for everyone else.
The Biden administration reversed course, limiting STM plans to a maximum of 4 months within a 12-month period. Their aim: push consumers toward ACA-compliant coverage.
What’s Coming in Trump’s Second Term?
If Trump follows his earlier playbook, expect another push to deregulate STM plans. Here’s what might be on the table:
- Eliminating Renewal Caps: Giving consumers the option to stay on STM plans indefinitely.
- Boosted Marketing Freedom: Relaxing advertising restrictions to make STM plans more visible and attractive.
- State-Level Flexibility: Encouraging states to broaden the availability of non-ACA-compliant plans.
These changes could appeal to insurers eager for product flexibility but may pose challenges for marketers navigating fluctuating regulations and potential consumer confusion.
Timing: A Moving Target
Change in health insurance policy doesn’t happen overnight. While Trump eased STM restrictions relatively quickly during his first term, the timeline for a second-term initiative remains unclear. Leadership appointments—such as Robert Kennedy Jr. for HHS and Dr. Mehmet Oz for CMS—bring unique priorities that may delay STM reforms.
Depending on the administration’s focus, these changes could be fast-tracked for the next open enrollment period or pushed back by competing priorities.
How to Prepare
For health insurance marketers and carriers, now is the time to plan for a potentially volatile STM market. Here’s how:
- Stay Agile: Product development timelines are long, so prepare your organization to act quickly when new regulations emerge. First movers will have a distinct advantage in capturing market share.
- Evaluate Your Sales Force: Not all agents are equipped to sell STM plans effectively. Assess your distribution network to ensure you have the right mix of agents in the right markets with the skills to thrive in a deregulated STM environment.
- Anticipate Market Shifts: Even if your organization opts out of STM plans, understand how their expansion could affect your business. Increased STM adoption may lead to higher premiums for ACA plans and greater marketplace volatility.
The Bottom Line
Short-term medical insurance may seem like a niche market, but its impact can ripple across the entire health insurance industry. For marketers, the opportunity is real, but so are the risks. By staying informed, evaluating your strategy, and building flexibility into your operations, you can turn potential disruption into competitive advantage.
It’s a new chapter for health insurance, and the marketers who adapt quickly will lead the way. Stay tuned as we continue to explore the implications of Trump’s second term on health insurance.
Reach out to us here to learn more about e123 and the future of health insurance distribution.
