Editor’s Note: Reviewed in December 2023 to update citation sources and ensure compliance standards.
Affordable Care Act (ACA) plans are individual major medical plans available through the federal and state health insurance exchanges and can be an excellent option for those with no insurance coverage available, a moderate household income, or who have a pre-existing condition. Others, however, may be looking for alternative insurance options.
While ACA average benchmark monthly premiums have dropped in price since 2018, many people who don’t qualify for subsidies have decided that these plans are still too expensive for them and are looking elsewhere for healthcare benefits.
Data shows enrollment numbers have steadily increased since 2021, primarily because of the American Rescue Plan that helps subsidize monthly premiums, not allowing individuals or families to pay more than 8.5% of their total household income toward health insurance premiums. About 67% of federal exchange enrollees were eligible for $10 monthly premiums or less in 2023. The rule will be in effect until 2025.
- 2023 – 16.4 million
- 2022 – 14.5 million
- 2021 – 12 million
- 2020 — 11.41 million
- 2019 — 11.44 million
- 2018 — 11.7 million
- 2017 — 12.2 million
- 2016 — 12.6 million
- 2015 — 11.6 million
- 2014 — 8 million
For the 2024 coverage year, ACA plan rates average nationwide are as follows (Kaiser Family Foundation analysis based on rates for a 40-year-old and weighted by county plan selections):
- Lowest-cost bronze premium — $364.
- Lowest-cost silver premium — $468.
- Benchmark (second-lowest-cost silver plan) premium — $477.
- Lowest-cost gold plan — $488.
If you don’t qualify for a subsidy and have to pay full price for an ACA plan, you may already be carefully evaluating your options in an attempt to identify the most affordable coverage available for you. There are some alternatives to consider, including short-term medical, private health insurance, zero deductible plans or fixed indemnity plans, and faith-based plans.
1. Short-Term Medical Insurance
Short-term medical insurance offers benefits for medical costs related to injury and unexpected illness. Because limited-duration short-term insurance plans are designed as temporary health insurance coverage for those between major medical plans, it can be a nice option when you’re trying to figure out how to afford permanent coverage.
Short-term medical policies are available for as few as 30 days and up to 364 days, depending on your needs and where you live. However, they aren’t for everyone. Short-term medical insurance is not subject to Affordable Care Act requirements, which means you can be denied coverage based on your health history, and your policy will not include all of the ACA’s essential health benefits—this is why short-term plan premiums are typically lower than unsubsidized ACA monthly plan premiums.
If you’re relatively healthy, don’t qualify for ACA subsidies, and don’t need the full range of benefits offered by a major medical insurance plan, then a short-term medical plan could be an option that makes sense for you.
Advantages
- Available year-round, not subject to open or special enrollment periods. This allows you to get coverage the next day or select an upcoming date within 60 days of needing a policy.
- Premiums can be economical. To better understand potential costs, run a no-obligation quote.
- Choose your plan length, from 30 days to 364 days, depending on the state. In some states, you can extend your coverage for up to 36 months.
- Network-free plan options that allow you to use your preferred healthcare providers. The choice is yours. Select from national PPO plans where you are encouraged to stay in-network for the best pricing or keep your current doctor.
- You don’t pay for benefits you wouldn’t need during a temporary amount of time (e.g., maternity). Why pay for benefits you would not use?
Disadvantages
- Not guaranteed—your application can be denied based on most preexisting conditions. Short-term health plan applications should generally be healthy individuals.
- Limited coverage—not all of the ACA’s preventive services and essential health benefits are included (e.g., maternity). If you know you will need surgery at a later date or plan to get pregnant soon, short-term medical insurance isn’t the best option.
- Not available in every state. Short-term health plans are both federally regulated and regulated by each state.
- In some states, when your policy ends, you will need to reapply and gain approval to begin a new policy.
2. Private Health Insurance
If you don’t qualify for a subsidy but want ACA-compliant coverage, then a private health insurance plan could be the right alternative for you. Private plans are available directly from a carrier that sells major medical insurance or a web entity such as Healthcare.com.
While some carriers offer plans both on and away from the federal and state-based health insurance exchanges, others may only participate in one or the other. Carriers may also sell differing plans through the exchange and private market. That means you could have different options in the private market, and you may potentially find lower premiums there as well.
Private health plans must follow ACA rules to include the 10 essential mandated benefits. You get full maternity benefits if you become pregnant, preventive care, mental health services, and more. Moreover, you cannot be denied coverage due to a prior diagnosis or ongoing preexisting condition.
Keep in mind that plans purchased in the private market do not qualify for cost-sharing subsidies. If your financial situation changes and you become subsidy-eligible, you will need to enroll in an exchange-based plan to take advantage of ACA subsidies. Keep in mind that open and special enrollment periods are the only times you can enroll in or switch ACA plans through the exchanges or in the private market.
Advantages
- Guaranteed to receive coverage.
- Includes all of the ACA’s essential health benefits and preventive services.
- Available in every state.
- Your rate is based on age, location, tobacco use, individual or family enrollment, and plan category; it cannot be based on your health history or sex.
- Additional plan options and potentially lower rates than plans offered through the federal and state-based exchanges.
Disadvantages
- Can be expensive when unsubsidized (subsidies are not available in the private market).
- Requires use of provider networks in some instances, which can be limited.
- Not available outside of open enrollment unless you experience a qualifying life event to become eligible for a special enrollment period.
- Not subsidy-eligible, even if your financial situation changes mid-year.
- Deductibles can be high.
3. Fixed Benefit Medical / Indemnity Plans
Indemnity plans, also known as fixed benefit medical plans or ‘no deductible’ plans, provide set benefit amounts for covered medical services at specific durations. For example, when you receive medical care covered by your policy, you will receive a fixed benefit amount per visit, per event, per day, per week or per month, up to a set limit. Within your policy, the amount and duration will vary depending on the benefit that applies.
The benefit is either paid directly to you (or the provider – your choice in most cases) after you receive covered care, and you can use it to pay for out-of-pocket medical expenses. Because a fixed indemnity plan can be paired with any other insurance for added protection, you can use your benefits to pay for the coinsurance, copay and deductible amounts for your ACA or short-term policy, as well as any medical care it doesn’t cover.
Advantages
- Available year-round.
- If you choose, it can be paired with any other health insurance for added protection.
- You can use benefits paid to you to pay your major medical deductible (if applicable) and other out-of-pocket costs, like childcare, the mortgage, car payments, etc.
Disadvantages
- Limited coverage—not all ACA essential health benefits and preventive services are included.
- Not guarantee-issue in most cases.
- Will not typically cover pre-existing conditions.
4. Faith-Based Plans
Membership in a healthcare sharing ministry, also known as a health cost sharing ministry or faith-based healthcare organization, is another coverage option if you don’t qualify for ACA subsidies and are considering alternatives.
On the surface, faith-based health plans can appear similar to health insurance—you pay a fee to receive access to coverage. However, faith-based plans are not health insurance. As such, it doesn’t have the same legal protections as health insurance—complaints can’t be made to state insurance commissioners, plans are not required to have financial reserves, and claims are not guaranteed to be paid.
Faith-based plans are a healthcare cost-sharing arrangement among like-minded people who pool expenses to help one another pay for healthcare. In addition to financial support, members may provide one another with other types of support, such as notes of encouragement or prayer.
Advantages
- Can be an economical option for individuals or families who think they can’t afford health insurance with premiums that cost less than traditional plans.
- Supporting and receiving support from others who share your values.
- Available year-round.
- Available in every state.
Disadvantages
- Not considered health insurance.
- Limited coverage—not all ACA essential health benefits and preventive services are included.
- May not cover pre-existing conditions or preventive care.
- Not eligible for ACA subsidies.
Which Health Insurance Alternative is Best?
There’s not a universal best choice when it comes to choosing coverage other than an ACA plan. Your decision will depend on factors such as your healthcare needs, your eligibility for policies that aren’t guaranteed issue, and what you can afford to pay for a monthly premium and out-of-pocket costs if you need medical care.
Most will agree, however, that if you qualify for a subsidy, then an ACA plan is probably your best option. It is a way to gain access to the most coverage at the most affordable rate. If you don’t qualify for a subsidy, or if your subsidy is not big enough to make an ACA plan affordable, then it may be worthwhile for you to investigate the options mentioned above.
There can be a lot of information to navigate and consider as you make a decision, and some of it may be confusing. If you need help understanding these options, have questions about them, or want help determining which might be right for you, contact a licensed health insurance agent or the company that provides the coverage you’re investigating.
877-246-0106
