Statement on 2018 NAIC report and short-term health coverage
For more than 50 years, LifeMap has helped people pick the right coverage for every stage of life, including life and disability insurance, dental, vision, accident and illness coverage. Helping members understand their health insurance choices is our top priority.
One of the products we offer are short-term health plans that are designed to meet short-term needs (90 days or less). Offered in Idaho, Oregon, Utah and Washington, they provide consumers with an affordable, temporary health insurance option during a gap in coverage, such as when they are between jobs. These plans are not for everyone, and consumers need to fully understand the costs and benefits before opting for one.
Recently, LifeMap’s 2018 medical loss ratio (or “MLR,” the portion of premium that is spent on medical care) was criticized based on a NAIC report that provided an incomplete view. Short-term plans are a small and highly variable part of our overall business with dramatic swings in enrollment, claims, and financial results. Comparing medical loss ratio between short-term plans and medical plans without this additional context is problematic and incomplete.
Our MLR in 2018 for these short-term plans, when based on claims incurred that year, was 32%.*
Over the past nine years, our MLR range has fluctuated between 23% and 107%. To further highlight the variability of this product quarter to quarter and year to year, our Q1 2019 statutory filed MLR is more than 280%. We expect this to fall in line with our historical range as the year progresses.
For additional context, in 2018 LifeMap had an average of 1,426 individuals each month on short-term plans (compared to 660,000 total LifeMap members) that represented 3% of LifeMap’s total annual premium.
*Please note: the 9% MLR figure cited by the 2018 NAIC report resulted from claims paid that year, not incurred, and higher reserve amounts that were held and later released to pay additional 2017 claims. The incurred 2018 MLR figure after these claims were paid was 32%.