The Affordable Care Act (ACA), or Obamacare, has provided millions with access to healthcare coverage through the ACA Marketplace. However, there are individuals who either choose not to use ACA Health Insurance, don’t qualify for subsidies, or find it difficult to afford. If you fall into either of these categories, read on as we explore health insurance alternatives to Obamacare.
Why You May Not Want to Use Obamacare
If you read our article ACA Health Insurance or Qualified Health Plans (QHPs): Coverage and Protections, you know that these plans offer certain benefits.
These include:
- coverage for preexisting conditions
- coverage for essential health benefits
- no lifetime limits.
However, many find it difficult to afford ACA health insurance premiums, don’t qualify for subsidies, or don’t need the full range of benefits offered by Obamacare insurance.
Alternatives to Obamacare
Non-ACA Individual Health Insurance
Non-ACA individual health insurance plans, or health plans sold in the private commercial market from insurance agents and brokers, are also known as off-exchange plans. Insurance carriers may sell different plans on and off the Exchange (ACA Health Insurance Marketplace). That means you could have different options in the private market, and may potentially find lower premiums.
Off-exchange plans offer more flexibility in terms of coverage and pricing. Health insurance plans in the private market aren’t regulated by the Affordable Care Act. Therefore, they don’t have to cover preexisting conditions, birth control, maternity care, substance abuse or behavioral health treatment, prescription drugs, sports injuries, etc. Alternatives to Obamacare can also impose annual limits. It’s important to fully understand what’s covered and what isn’t.
On the other hand, you can also find QHPs or ACA-compliant comprehensive coverage in the private market from issuers, agents, and brokers who are certified to participate in the Federally-facilitated Marketplaces. However, off-exchange plans don’t qualify for ACA subsidies to help cover the costs of the policy.
While alternatives to Obamacare may not provide the same level of comprehensive coverage, they can be a viable option if you are looking for more affordable premiums or don’t require certain benefits mandated by the Affordable Care Act.
Short-Term Health Insurance:
Short-term health insurance plans are available off the Exchange in the private market. They offer temporary coverage for individuals who need insurance for a limited duration, such as when switching jobs or while waiting for open enrollment or new coverage to begin. You can find network-free and PPO plans, available all year. These last 12 months or less and can sometimes be renewed for up to 3 years.
However, short-term insurance:
- may provide limited coverage
- isn’t available in all states
- your application can be denied based on most preexisting conditions
These plans typically have lower premiums and higher out-of-pocket costs but can be a viable option if you need immediate coverage.
Catastrophic Health Insurance:
Catastrophic health insurance plans are designed to pay for covered healthcare services resulting from worst-case health scenarios, like getting seriously sick or injured. These plans have high deductibles and lower premiums. After you reach your deductible, your insurance pays for all covered services, with no copayment or coinsurance.
Outside of the Exchange, catastrophic plans can be found from private brokers and insurance agents.
On the ACA Marketplace, they are available to individuals under 30 or those who qualify for a hardship exemption. Older adults can buy a catastrophic plan if no other qualified health plan offered through the Marketplace in 2024 would cost less than 7.97% of income.
Catastrophic plans:
- can’t paired with a Health Savings Account (HSA)
- are ineligible for ACA Premium Tax Credits and cost-sharing subsidies
- don’t cover family members if purchased on the Exchange
- may not be a good fit for those who have chronic conditions or must visit their primary care provider regularly
Individuals generally in good health who don’t anticipate frequent medical costs might consider these plans.
Supplemental Insurance:
To learn how to further protect your finances, check out What Is Supplemental Insurance And Why Do You Need It? You’ll learn how these types of insurance can help cover the out-of-pocket expenses left behind by your chosen health coverage.
More Healthcare Coverage Options
In our article, What if I Can’t Afford Health Insurance? we explore ACA subsidies, Medicaid, CHIP, Community Health Centers, and government-sponsored health programs available to specific populations.
In Cash for Healthcare and Options for the Underinsured and Uninsured, you can read about healthcare alternatives to traditional health insurance. These include Direct Primary Care, Health Cost Sharing Plans, Retail Clinics, Urgent Care, and medical tourism.
If you want a comprehensive overview of healthcare coverage options in the U.S., check out the book, Decoding Health Insurance and the Alternatives: Options, Issues, and Tips for Saving Money, by Lauren R. Jahnke.
Take-Aways:
- While Obamacare has expanded access to healthcare coverage, many may find it challenging to afford the premiums.
- Non-ACA individual insurance plans can be a good option if you don’t require all of the benefits offered by ACA health insurance.
- Short-term insurance can be a viable alternative if you need immediate coverage.
- Catastrophic insurance can help protect against significant medical expenses resulting from severe illnesses or injuries.
- Remember to carefully evaluate each option, considering factors such as your health needs, budget, and long-term goals, before making a decision.