Undoubtedly, ACA-compliant health plans available through the federal and state health insurance exchanges are an excellent option for people having household income between 100% and 400% of the federal poverty level, or for people having a pre-existing condition. Though premiums of the ACA plan have significantly dropped, at an average of 4% for 2020, still many people do not qualify for subsidies. Such people find these plans too expensive for them, and hence they look for some other healthcare alternatives. Around 2.5 million people not receiving federal premium tax credits left the individual health market from 2016 to 2018, which is a 40% drop in two years, as per the Centers for Medicare and Medicaid Services. People who don’t qualify for a subsidy in 2020 for an ACA plan might be evaluating their option, to find the most affordable coverage available to them. People should know that there are some alternatives to ACA-plans like short-term medical, private health insurance, zero deductible plans, or fixed indemnity plans, and faith-based plans.
Short-Term Medical Insurance
Short-term plans are a good alternative to ACA-plans, offering healthcare costs related to unexpected illness and injury. Designed as temporary health insurance coverage for people between major medical plans, short-term plans are a good option for individuals who are trying to afford permanent coverage. Short-term plans can be obtained for a short duration ranging from as few as 30 days to up to 364 days, depending on an individual’s need and area. Since short-term plans are not ACA-compliant plans, so people looking for this plan can be denied coverage based on their health history, and their plan will not have all the ACA’s essential health benefits. This is the reason behind the low premium cost of the short-term plans compared to unsubsidized ACA plan premiums. Short-term plans are ideal for individuals who are healthy, and who don’t qualify for ACA-subsidies, and who don’t require complete benefits offered by a major medical plan.
The best part of short-term plans is that these plans are available all through the year, and these plans are not subjected to open or special enrollment periods. Individuals enrolled in these plans have the option to visit their preferred healthcare providers. Another benefit is that individuals are not required to pay for benefits that they would not require during a temporary amount of time. Besides merits, there are also some demerits of short-term plans like these plans are not guaranteed issues, and individuals can be denied coverage based on pre-existing conditions. These plans are not available in every state, and come with limited coverage, as not all the preventive and essential health benefits are included. Individuals enrolled in the plan need to renew their plan after its term-end.
Private Health Insurance
Individuals who are looking for only ACA-compliant plans, but do not qualify for the federal subsidy, then a private health plan could be the best alternative for them. People can buy private health insurance plans from an insurance carrier, or through the web portal of these carriers. Some of the health insurers offer both private and federal government health plans, whereas some carriers offer only either federal government plans or private plans. Thus, people can buy ACA-complaint plans from the private marketplace, and may even find plans with lower premiums.
It should be remembered that health plans available for sale at the private marketplace do not qualify for premium tax credits and cost-sharing subsidies. Thus, if people’s financial situation changes and they become eligible for a subsidy, then they will need to enroll in an exchange-based plan to avail the subsidies benefits. However, people are allowed to enroll or switch between ACA plans through the exchange or private market, only during the open or special enrollment periods.
ACA-compliant private health plans are available in every state, and individuals are guaranteed to receive coverage under this plan. These plans include all the ACA’s essential health benefits and preventive services. Besides, there are more plan options, and the rates of these plans are generally lower than the plans offered by the federal and state-based exchanges. Some of the demerits of these include, these plans are not available outside open enrollment period unless individuals qualify for a special enrollment period, deductibles are quite high, individuals will not be eligible for subsidies, even if their financial condition changes and enrollees of these plans are required to visit in-network providers.
Fixed Indemnity Plans
Fixed indemnity plans or no deductible plans are also a good alternative of ACA-plans that provide set benefit amounts for the covered healthcare services at specific durations. For instance, people having this plan on receiving healthcare covered under the plan will receive a fixed benefit amount per visit, per day, per event, per week, or per month up to a set limit. During the plan term, the amount and time-frame will vary depending on the benefit included. Individuals directly receive the benefits after receiving the covered care, and individuals can use the amount to pay for their out-of-pocket medical expenses. Besides, this plan can also be paired with other plans for additional protection.
Fixed indemnity plans are available throughout the year, and individuals can use the benefit to pay for their major medical plan’s deductible and other out-of-pocket expenses. The demerit of these plans is that plans have limited coverage, not all essential benefits and preventive services are included, these plans do not cover pre-existing conditions, and these plans are not guaranteed issues.
Individuals who don’t qualify for ACA subsidies, and are considering alternatives for healthcare coverage can avail membership in a healthcare sharing ministry or faith-based healthcare organization. Though these plans might appear similar to health insurance as people are required to pay a fee to obtain access to coverage, these plans are not health insurance. These plans do not provide the same legal protections, do not have financial reserves, and even claims are not guaranteed to be paid.
These plans are healthcare cost-sharing arrangements between like-minded individuals, who agree to pool medical expenses to help one-another pay for their healthcare costs. Besides financial support, members may also support one another in the form of notes of encouragement or prayer. This health coverage option is economical for people who cannot even afford health plans having a low cost than traditional plans. These plans are also available throughout the year and are available in every state. Demerits of these plans are that these are not considered health insurance, not eligible for ACA subsidies, may not cover pre-existing conditions, and offer limited coverage benefits, as not all essential health benefits and preventive services are included.