When Melanie Miller saw that her health insurance premium payment was set to nearly triple to $914 a month this year, she stopped shopping on the Affordable Care Act marketplace.<\/p>\n
The 59-year-old retired teacher, who recently moved from Ohio to Michigan, now pays $341 a month for a pair of plans, one that covers routine and urgent care and another that pays fixed amounts for hospital stays. Neither meets federal standards for comprehensive coverage.<\/p>\n
Though she practices yoga and is healthy, Miller said she still feels \u201cvulnerable.\u201d If she lands in the hospital, her plan pays a flat $2,000, a fraction of the $30,000 price tag<\/a> of an average hospital stay.<\/p>\n \u201cI don\u2019t gamble. But I may as well,\u201d she said. \u201cThis is gambling.\u201d<\/p>\n Congress\u2019 decision late last year not to extend enhanced marketplace tax credits has boosted the appeal of alternatives to comprehensive insurance \u2014 plans like Miller\u2019s, which have lower premiums but don\u2019t meet ACA standards for coverage or consumer protections. Unlike plans sold on the exchanges, these options \u2014 some sold by major insurers, others by small companies or nonprofits \u2014 can deny claims with few or no legal rights for consumers to appeal. The plans are not required to cover \u201cessential health benefits,\u201d such as preventive care, and can impose annual or lifetime caps on benefits.<\/p>\n There is debate over whether these options help or harm patients. Consumer advocates dismiss them as \u201cjunk insurance,\u201d while proponents say restricting alternatives to pricey marketplace plans risks driving up the number of uninsured. Some states, including Kansas and Florida, and the federal government itself have eased regulations on such plans or created incentives to join them, while other states, including California and Massachusetts, have tried to deter enrollment in alternative insurance. Those regulatory guardrails, however, are now being stress-tested as premiums blow out household budgets.<\/p>\n Alternative insurance takes many forms, including short-term policies, which were designed to bridge temporary gaps in coverage and often exclude preexisting conditions, and fixed-indemnity plans, which pay a flat rate per service regardless of how high costs go and are intended for supplemental use. Arrangements in which people pool their money to cover one another\u2019s bills, including faith-based \u201chealthcare sharing ministries,\u201d also provide a cheaper alternative to the marketplace options. Because they are not considered insurance under federal or state law, they are not legally bound to pay for even eligible medical bills<\/a>.<\/p>\n Enrollment data for alternative plans is mostly confidential, but several indicators point to shifts in the market. Recent estimates suggest marketplace enrollment declined about 20%<\/a> from 2025, and a KFF survey<\/a> of people on the exchanges last year found that 5% switched to private, nonmarketplace individual coverage, including plans that don\u2019t comply with the ACA. Covered California, the state\u2019s marketplace, plans to survey former enrollees to find out where they went.<\/p>\n Insurance industry insiders also report that, amid the expiration of subsidies, alternative plans are making a marketing push. Colorado insurance broker Samantha Albritton said that before ACA open enrollment, she saw more marketing from fixed-indemnity plans than in previous years. One healthcare sharing plan, Zion HealthShare, had more than 75,000 members in February \u2014 a 50% increase since last June, it said in a statement.<\/p>\n Critics of these alternative plans say the major issues occur when people use them as primary insurance and don\u2019t realize the coverage is inadequate until they need it most. \u201cHumans have bodies that can fail them,\u201d said Amy Killelea, an assistant research professor at Georgetown University\u2019s Center on Health Insurance Reforms.<\/p>\n A Premium Spike Drove Her From the Marketplace. An Alternative Left Her Exposed.<\/strong><\/p>\n Melanie Miller, 59 To avoid a $553 monthly premium hike this year, retired teacher Melanie Miller<\/strong> replaced her Affordable Care Act coverage with two alternative plans, one that covers preventive services and another that pays fixed amounts for hospital care. She considers her limited hospital coverage a calculated risk given her good health but is now weighing whether to drop the preventive care policy, given her struggles to find in-network providers in her area. \u201cI have not had a good experience with it,\u201d she said.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n Killelea and other health insurance experts say that the fine print on these plans can be difficult to parse and that enrollees don\u2019t have the protections of traditional insurance to fall back on. A 2023 peer-reviewed study<\/a> found that after reading a summary of a sample short-term policy\u2019s benefits and a disclosure that the plan was not ACA-compliant, only half of participants understood that prescription drugs were not covered.<\/p>\n When Jade Ramsey was 24, she declined insurance from her employer due to the cost of the premiums. After experiencing fatigue and unexplained bruising, she sought low-cost coverage from Southern Guaranty Insurance Company through a policy similar to a fixed-indemnity plan.<\/p>\n Two weeks after enrolling, Ramsey, who lives in Arizona, was unable to walk. An emergency room visit led to a six-day hospital stay and a $143,823 bill in 2021. She was diagnosed with acute lymphoblastic leukemia. Her insurer denied coverage for this and other bills, labeling the cancer a preexisting condition and offering no other recourse after rejecting her appeal, she said.<\/p>\n Those bills landed in collections, and her credit score nose-dived. Ramsey said she once visited the ER with chest pain she attributed to the stress of the six-figure debt. She eventually qualified for Medicaid, and her credit score has since recovered even though she never paid off the debt. She said collection agencies still call, but she ignores them.<\/p>\n Southern Guaranty Insurance Company did not respond to requests for comment.<\/p>\n Proponents of alternative insurance argue that stifling these more affordable options will just increase the ranks of those without any coverage.<\/p>\n \u201cPeople should be able to spend their own money financing healthcare the way that works best for them,\u201d said Brian Blase, president of Paragon Health Institute, an influential conservative think tank. Paragon pushed for ending the enhanced marketplace tax credits, arguing they fueled improper enrollment by heightening incentives for unscrupulous brokers to sign people up without their knowledge.<\/p>\n Robert Godfrey of Clearwater, Florida, appreciates having choices. When Godfrey\u2019s monthly premium payment was slated to jump from $879 to around $1,250 this year, the 64-year-old hair salon owner switched to a $320-a-month membership with Zion HealthShare. Rarely needing medical care, Godfrey viewed the shift to a cheaper plan as a pragmatic choice. \u201cThank God I\u2019m healthy,\u201d he said.<\/p>\n Healthy and Outraged by Rising Premiums, He\u2019s Betting on Alternative Insurance<\/strong><\/p>\n Robert Godfrey, 64 Robert Godfrey<\/strong>, a hair salon owner, says he doesn\u2019t need healthcare beyond preventive services and has never hit his deductible. So last year, when the expiration of enhanced federal subsidies was going to push his marketplace premium payment up 40% \u2014 to around $1,250 a month \u2014 he walked away. He called it an \u201coutrageous increase.\u201d Just months away from becoming eligible for Medicare, Godfrey opted for a cheaper alternative: a $320-a-month healthcare sharing plan. These arrangements, in which members pool their funds to cover one another\u2019s medical costs, aren\u2019t legally obligated to pay for expenses.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n The Trump administration has relaxed regulations on some alternative plans. Last year, federal agencies stopped enforcing<\/a> Biden-era rules on how long short-term plans could last and how they could be marketed, then offered states<\/a> a marginal advantage in the competition for a share of $50 billion in federal rural health funding if they followed suit.<\/p>\n In a statement, CMS spokesperson Christopher Krepich said the administration is focused on ensuring \u201caccess to affordable coverage options, strengthening competition, and reducing unnecessary regulatory burdens, while maintaining appropriate consumer protections.\u201d<\/p>\n State oversight of alternative insurance is a patchwork. In much of the nation, these plans face few restrictions. Many states, including Florida<\/a>, Arizona<\/a>, and Indiana<\/a>, have eased limits on short-term plans in the wake of the Trump administration\u2019s moves, allowing them to be renewed for up to three years in total.<\/p>\n In Kansas, lawmakers overrode the governor\u2019s veto to pass a bill<\/a> in March providing a tax break for people who enroll in healthcare sharing ministries. In her veto, Democratic Gov. Laura Kelly warned that these ministries are unregulated, \u201cwhich opens the door to all sorts of fraud and abuse.\u201d Kansas House Speaker Daniel Hawkins countered in a news release that \u201cHouse Republicans believe families should have more flexibility and more control over their healthcare decisions, not fewer options and higher costs.\u201d<\/p>\n Oklahoma weighed a similar bill<\/a> earlier this year, though it did not pass.<\/p>\n Not all states are friendly toward alternative plans. Over a dozen<\/a> ban short-term policies or have rules restrictive enough to deter insurers from selling them. California and Massachusetts are among the states with the most stringent rules, banning short-term plans and requiring clear warnings to people considering a healthcare sharing ministry in certain circumstances. Both also tax adults who forgo comprehensive coverage, while subsidizing marketplace premiums to encourage enrollment.<\/p>\n Still, the higher premiums will test these guardrails, said H\u00e9ctor Hern\u00e1ndez-Delgado, a director at the National Health Law Program, which advocates for quality healthcare for low-income people. He worries that consumers lured by the plans\u2019 low prices could \u201cbe worse off down the road,\u201d saddled with burdensome medical debt.<\/p>\n Now in remission, Ramsey urges those considering cheaper insurance to do careful research. \u201cMake sure it\u2019s covering what you need to be covered,\u201d she said. \u201cIt could be too good to be true.\u201d<\/p>\n Are you struggling to afford your health insurance? Have you decided to forgo coverage? <\/em>Click here<\/em><\/a>\u202fto contact KFF Health News and share your story.<\/em><\/p>\n<\/div>\n KFF Health News<\/a> is a national newsroom that produces in-depth journalism about health issues and is one of the core operating programs at KFF\u2014an independent source of health policy research, polling, and journalism. Learn more about KFF<\/a>.<\/em><\/p>\n This <a target=”_blank” href=”https:\/\/kffhealthnews.org\/health-industry\/alternative-health-plans-growth-sharing-ministries-short-term-aca-premiums\/”>article<\/a><\/a>; first appeared on <a target=”_blank” href=”https:\/\/kffhealthnews.org”>KFF<\/a> Health News<\/a> and is republished here under a <a target=”_blank” href=”https:\/\/creativecommons.org\/licenses\/by-nc-nd\/4.0\/”>Creative<\/a> Commons Attribution-NonCommercial-NoDerivatives 4.0 International License<\/a>.<img src=”https:\/\/kffhealthnews.org\/wp-content\/uploads\/sites\/8\/2023\/04\/kffhealthnews-icon.png?w=150"<\/a>; style=”width:1em;height:1em;margin-left:10px;”><\/p>\n
Harbor Springs, Michigan<\/strong><\/p>\n
Clearwater, Florida<\/strong><\/p>\n
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