Health Insurance Innovations, a brokerage that sells many short-term health plans, appointed a new CEO Tuesday but offered few details behind the switch.
The move comes a week after Donald Trump was elected president, creating uncertainty about what's in store for the health insurance market given the transition and possibility that Congress will push for repeal of the Affordable Care Act.
However, Trump's election has helped companies like the publicly traded Health Insurance Innovations, of HII, on the premise that health insurance regulations will loosen and medical underwriting will return. HII's stock price days after Trump's election hit $9.20, its highest point since late 2014.
Effectively immediately, Gavin Southwell is the CEO of HII, replacing Patrick McNamee, who will stay on in a transition role until the end of the year. Southwell, originally a citizen of the U.K., said in a statement that McNamee joined HII with “the short-term goal of helping to build a solid foundation for growth, and he accomplished this goal.”
McNamee made almost $2 million in 2015. Southwell, 38 years old as of this summer, received a $350,000 salary and $50,000 sign-on bonus when he was hired earlier this year.
The company did not respond to requests for more information. HII is the parent organization of AgileHealthInsurance.com, an avenue for buying short-term plans, as well as HealthPocket, a consumer research site for health plans.
The federal government and consumer advocates criticized short-term health plan brokers this year for luring healthier people into these policies and draining the risk pool in the new ACA markets. These types of plans, also called term insurance, are not compliant with ACA coverage standards, so people who bought one also had to pay the individual mandate penalty. There's also no guarantee a sick person could get such a plan. Members and brokers argued the options were still cheaper than what was offered on the federal and state insurance exchanges.
The purpose of short-term health plans has been to bridge gaps in employment. HII had more than 252,000 active short-term health plans as of Sept. 30, a significant jump from the 137,000 it had last year.
Last month, HHS quietly finalized a rule that restricted short-term policies to last no more than three months, dealing a blow to term insurers. Previously, the coverage just had to last less than 12 months.
But it's unclear if a Trump administration will issue its own regulations to reinstate broader use of short-term plans and medical underwriting. That would immediately help insurance companies and brokers that sell those plans.
HII projects revenue to be as high as $178 million by year-end.