A growing number of people are turning to health insurance alternatives when they can’t afford to buy health insurance on the Affordable Care Act’s Obamacare-only Marketplaces.
Affordable Care Act (ACA) plans are comprehensive, offering all 10 Essential Health Benefits. As a result, the plans come with higher premiums and deductibles. In the vast majority of cases, only people eligible for government subsidies can afford them. That’s where non-Marketplace plans come in. They carry far lower premiums but come with numerous restrictions, such as very limited covered services, short coverage periods, sky-high deductibles and more.
Consider these six non-Marketplace choices if you can’t afford to buy health insurance on Obamacare-only exchanges. While these coverage options are by no means perfect, they are a lot cheaper than most major medical policies.
1. Private, Non-Marketplace Plans
There are Non-Marketplace plans that generally mirror Marketplace plans, except that these off-Marketplace plans don’t provide premium subsidies. Enrollees must pay rate increases out-of-pocket. They also go not accept people with pre-existing health conditions.
What’s Covered: Like Obamacare, non-Marketplace plans cover the 10 Essential benefits. Some plans may include out-of-network coverage and/or coverage for a wider selection of prescription drugs.
Cost: Private plans tend to be less expensive than Marketplace plans.
Who’s Eligible: Most people.
Best-Suited For: People who want an Obamacare plan, but make too much money to qualify for subsidies, generally around $50,000 for individuals, $100,000 for families.
Non-Marketplace plans are only available to healthy people with no pre-existing conditions. You can customize coverage, choosing some benefits like substance abuse counseling and, rejecting others, like maternity. And you can sign up or drop out at any time. Costs tend to be lower because the members tend to be healthier than an ACA pool with people suffering from pre-existing conditions. But beware of non-coverage gaps. You could get sick and find your illness, injury, or hospital care are not covered.
Regardless of whether you shop on-Marketplace or off-Marketplace, the ACA’s regulations and consumer protections apply to all plans in the individual and small group market. Some health insurance companies only offer off-Marketplace plans.
If you’re eligible for premium subsidies, an ACA compliant Marketplace healthcare plan will almost always be the most affordable coverage choice. However, if you make too much money to qualify for subsidies, but not enough to afford high premium costs, Marketplace health insurance alternatives can be worth consideration. Some people shop outside the exchange if they know they won’t qualify for subsidies and want more options.
In some cases, non-Marketplace plans may offer coverage for a wider range of prescription drugs than Marketplace healthcare plans do. If you take a particular brand-name medications, you may be better off with a non-exchange plan that includes those drugs in its formulary, instead of a Marketplace healthcare plan that only provides coverage for a similar medication, or the generic version.
2. Temporary Health Insurance: Short-Term Health Insurance
What’s Covered: Benefits for unexpected illnesses and injuries. Otherwise, very limited health benefits and no coverage for pre-existing conditions or for preventative care, maternity care, and prescription drugs.
Cost: Cheaper than Marketplace healthcare plans and most traditional medical plans.
Who’s Eligible: People in good health (providers reserve the right to deny coverage to those who have pre-existing conditions).
Best-Suited For: People who are in-between major medical insurance plans and need a temporary. Safety net for unforeseen emergencies due to serious illnesses or accidents.
Short-term health insurance plans (also referred to as “short-term medical plans”) are designed to provide a temporary solution for people experiencing an unexpected gap in healthcare coverage.
Like their name implies, short-term health plans generally offer limited 90-day plans that can be renewed for up 364 days for people who are in-between major medical insurance plans, maybe because of a sudden job loss or due to aging out of a parent’s plan in their late twenties.
Short-term health plans don’t provide as much coverage as a Marketplace healthcare plan, but they are much cheaper and can serve as a temporary solution for people until they get more comprehensive coverage. But be warned: You’ll have to complete a complex questionnaire, face higher costs based on gender and age, can be denied coverage or pay through the nose for a pre-existing condition. Also, the plans almost always do not provide coverage for mental health, substance abuse, maternity or sports injuries. And the plans commonly impose caps on hospital stays of about $1,000 a night, despite the $3,000 national average, and sometimes even restrict what nights you can enter the hospital and be covered at all
Depending on where you live and how healthy you are, short-term health coverage can last up to 364 days (with the possibility of up to three years in a few states ) and has a lower monthly premium cost than regular insurance coverage does. Planholders can choose when their period of coverage ends and usually have the option to re-enroll or renew their policy, assuming they remain healthy. If you get sick, you will almost certainly get dropped. That said, short-term health plans provide basic coverage in a pinch–and will protect you from tallying up a huge medical bill if you get injured or ill in the interim.
Because short-term policies are not ACA-compliant, they can discriminate against people with pre-existing conditions and rarely offer benefits like maternity care or prescription drug coverage. That means someone with diabetes isn’t likely to get coverage, and short-term plans tend not to offer free screenings and other essential benefits plans that Marketplace plans are mandated to cover under the ACA.
3. Primary Care Membership (AKA “Concierge Medicine”)
What’s Covered: A pre-agreed list of healthcare services and exams, like family primary care or pediatrics.
Cost: Often cheaper than actual health insurance with more predictable out-of-pocket costs for the services covered, like an annual exam.
Who’s Eligible: Anyone.
Best-Suited For: Healthy individuals who can’t afford Obamacare premiums and are seeking an alternative way to receive predetermined preventative care.
Concierge medicine is primary care offered directly from doctors to consumers and employers without the involvement of health insurance companies. In physician practices offering a concierge membership model, patients pay a monthly or annual retainer–typically between $60 and $100 per month–to their doctor or medical office for a pre-ordained bundle of services.
Membership medicine is also referred to as “direct primary care (DPC),” “direct-pay medicine,” and “membership medicine,” and the medical services offered tend to be standardized within a practice and are not individually negotiated. It’s a simplified model of healthcare which enables doctors to provide care without the doctor or the patient having to deal with insurance companies. It serves as both an affordable solution for people who can’t afford to pay Marketplace healthcare premiums and as an alternative practice model for doctors who want to spend less time on paperwork and more time with patients.
Most membership practices provide common healthcare services and exams, but rarely cover surgeries and more complex procedures. Therefore, even with concierge services, many people still sign up for insurance for catastrophic occurrences such as a heart attack, accidents, or contracting a disease.
On the plus side, concierge practices offer personalized care, streamlined billing, and priority scheduling to their member patients. If you are attracted to this type of care, you may want to lean to a large and diversified group practice, with the team of doctors offering an array of services
4. Health-Sharing Plans
What’s Covered: Medical care that is consistent with a certain group’s Biblical teachings, meaning perhaps prenatal care for out-of-wedlock mothers, sterilization services or , alcohol and drug addiction treatments, sterilization procedures> Also, gay conversion therapy might be included, in state’s where that’s still legal.
Cost: Usually cheaper than comprehensive health insurance.
Who’s Eligible: All health-sharing ministries have different philosophies and religious affiliations. Read the statements of faith for each ministry to find out which plan lines up with your personal health needs and personal beliefs.
Best-Suited For: People seeking a community-based approach that match their religious beliefs
A faith-based health plan, also known as a health-sharing ministry, isn’t actually a type of health insurance policy; rather, it’s an alternative to health insurance. In these plans, members share the cost of their medical bills with other like-minded individuals in the organization.
Faith and community health groups had their heyday early in the last century, before the health insurance industry took shape in the 1920s.
Health-sharing plans are generally much less expensive than individual health insurance plans. Additionally, they typically don’t limit choice when it comes to selecting treatment options or medical providers. But they may have limited assets and insurance acumen. Experts say many of these kinds of groups have gone belly up because they often lack both funds to pay out and executive insurance experience.
Because these Christian healthcare ministries were grandfathered into the ACA as an exception to the Obamacare mandate, the ministries can choose whether or not to cover any essential health benefits (such as preventative care, mental health treatment, and care for pre-existing conditions).
5. High-Deductible Health Plans (HDHPs) + Health Savings Accounts (HSAs)
What’s Covered: Preventive care and all health benefits.
Cost: Inexpensive monthly premiums, but extremely high out-of-pocket expenses due to high deductible.
Who’s Eligible: Anyone.
Best-Suited For: People who rarely get sick
High-deductible health plans (HDHPs) can be an appealing choice for healthy consumers looking to lower their monthly expenses. Iindividuals pay a small premium amount each month, but they must also pay thousands of dollars out-of-pocket for treatment before the insurerbegins to pay one dollar of their medical expenses.
For example, if your high-deductible health plan has a deductible of $8,000, and you get hit with a $14,000 hospital bill, you must pay the $8,000 out-of-pocket before your insurance kicks in and helps cover the rest of your bill.
Preventive care services are a notable exception to deductible fulfillment, as HDHPs – like all plans under the ACA – are required to cover the cost of in-network preventive care, such as annual checkups, well-woman exams, and mammograms.
HDHPs are regularly sold with health savings accounts (HSAs). HSAs allow members to save pre-tax dollars and spend their balances later for qualified medical and healthcare expenses. If a member has few health costs, an HSA can help that policyholder save money long-term. On the other hand, members can get sick or injured and run through their entire savings.
HDHPs are best-suited for people who are relatively healthy and rarely get sick or go to the doctor. Many routine health services intended to keep you well (e.g. colonoscopies, mammograms, and vaccinations) are covered at 100% by HDHPs. However, HDHPs are not a practical choice for people with chronic conditions or little extra money to save. HDHP coverage can also be problematic if you have an emergency or accident and run into unanticipated medical costs you have to pay yourself, before you reach your deductible threshold.
If you’re considering HDHP coverage, it’s crucial to know what is and isn’t covered by the plan.
6. Catastrophic Health Insurance
What’s Covered: Preventive care and essential health benefits.
Cost: Inexpensive monthly premiums, but policyholders must pay for all their healthcare costs out-of-pocket until they meet their plan deductible.
Who’s Eligible: Catastrophic plans are only available to people under age 30 or people 30 and older who qualify for an ACA hardship/affordability exemption (which means that because of economic hardship, the person is not required to maintain health insurance coverage). While the ACA’s individual mandate penalty was eliminated after the end of 2018, the mandate itself still exists. Thus, people can still seek hardship exemptions from the mandate to enroll in catastrophic plans.
Best-Suited For: People who feel they don’t need comprehensive coverage, but want a modicum of financial protection.
In the past, “catastrophic health insurance” was a term that could refer to any kind of health plan with a really high deductible. Since the ACA’s passage, the term refers to a category of individual and family health insurance plans that are sold on the state and federal health insurance exchanges, largely to young people.
To qualify for this type of coverage, policyholders must be under the age of 30 or have a hardship or affordability exemption from the ACA’s individual mandate penalty. Also, if you’re eligible for a health insurance subsidy to help you pay your monthly health insurance premiums, you can’t use that subsidy toward the cost of a catastrophic healthcare plan.
Catastrophic plans are designed to protect individuals in a worst-case scenario or medical emergency. Monthly plan premiums do tend to be lower than those of traditional plans, but policyholders generally need to pay for all their healthcare costs out-of-pocket until they meet their plan’s deductible, which is a little over $8,000.
All things considered, catastrophic coverage is a limited type of policy for adults under the age of 30 with a daunting deductible for many young people. But these plans do cover catastrophic events, and they also count as ACA-compliant insurance.
Taking the Next Steps
Depending on different factors – how long you want to be covered, or how much coverage you want – there are numerous Obamacare alternatives that might meet your needs.