As uncertainty continues to surround the future of the ACA, Marketplace insurance, and cost saving subsidies that have helped many Americans, it’s no surprise that people are worried and searching for alternatives to health insurance.
I can not stress this enough: RESEARCH ANYTHING AND EVERYTHING BEFORE EVEN CONSIDERING ENROLLING OR MAKING A PURCHASE.
Many people are poised to be in a very vulnerable position if they lose their health coverage and there’s no shortage of unscrupulous individuals who are happy to mislead consumers to benefit themselves. They’re more than ready to offer you a fantastic bargain (that later on will turn out to be a frustrating and potentially dangerous disappointment). Consumers’ best defense is to be prepared by knowing what to watch out for when looking for affordable care options.
Proceed with caution
A warning from the Texas Department of Insurance (TDI) highlights some of the immediate things to remember:
“Some consumers look at alternative health plans as a way to save money. Don’t assume they’ll provide traditional major medical coverage. Alternative plans may not be regulated by the state, and they don’t have to follow federal Affordable Care Act (ACA) rules. Unlike ACA plans, these plans:
- May not cover all injuries or illnesses, including pre existing and chronic conditions.
- May have waiting periods to join, pay less for each service, and limit their total yearly payments (annual caps).
- Don’t allow you to get federal help – such as tax credits and cost-sharing reductions – to lower your premiums and out-of-pocket costs.
Alternative health plans
Spot Health Insurance Scams | Consumer Advice
Rising popularity is not a sign of superiority
A simple web search for "health insurance alternatives" is enough to see how in demand this is and how many different options are easily available to consumers. What isn’t so easy to see is what to look out for when choosing one. All make promises of big savings and are quick to reassure potential customers of the extent of their coverage but they’re not always what they seem.
Remember that health insurance premiums can seem like a waste of money if you don’t need to use your insurance much, but you don’t want to go uninsured and risk serious financial and medical problems.
In order to make informed choices, it is critical to research, investigate, and be aware of the potential drawbacks, limitations, and exclusions of any health plan, just as you do when choosing a traditional insurance plan.
Overview of the options
To begin, here are the most common “alternatives” to health insurance being marketed to consumers today with a brief summary of:
- what they are/what they do (definition)
- quick glance at pros/cons
- examples of who this option might appeal to
- additional notes/considerations to keep in mind
In the upcoming posts for each type, we’ll do a deep dive into those benefits, pros and cons, etc. but for now, let’s just get an overview of what’s available.
Types of "Alternatives to Health Insurance" 2025
(You can find a list of definitions and links to further information at the end of this post.)
Definition:
- Also known as limited benefit plans, short-term health insurance plans are major medical insurance plans that provide temporary coverage for a limited duration, often used to bridge gaps in coverage during transitions.
Pros:
- Can have a lower premium than other forms of major medical insurance plans and can be purchased outside of the Marketplace annual open enrollment period.
Cons:
- Do not meet the minimum essential coverage requirements under the ACA (meaning they are not guaranteed to offer the 10 EHBs and they don’t fulfill the MEC requirement for being granted a SEP for certain qualifying life events (QLEs))
Who/what is this good for?:
- Someone looking to bridge a temporary gap in coverage. Example: you’ve changed jobs which ended your existing coverage but you can’t get a SEP (special enrollment period) to get a Marketplace plan before the next open enrollment period and you can’t enroll in your new employer’s plan yet. Many will opt for a short term plan under these and similar circumstances.
Notes:
- Because short-term plans are not subject to ACA requirements, they can deny coverage or charge more to people with preexisting conditions. When the term of the policy runs out, you have to purchase another and you may not be able to get one if you are sick or have ongoing/chronic conditions.
Beware of targeted advertising: As the Trump admin scales back efforts to inform people about comprehensive ACA plans, it is actively promoting short-term plans as a viable alternative with low premiums. It is not making an effort to highlight the limitations and potential drawbacks of this option. As always, DO YOUR RESEARCH before making any decisions.
What is Short-Term Health Insurance?
Definition:
- Nonprofits that limit membership to people of a similar faith and where members share healthcare costs among themselves. Members agree to make monthly payments to pay for the medical expenses of other members.
Pros:
- Generally have lower monthly contributions than traditional health insurance plans with a wider variety of providers
- A “sense of community”
- Sometimes offer additional perks like dental and vision discounts
Cons:
- Because they are not regulated like traditional health insurance, they are free to deny coverage due to pre existing conditions and making certain lifestyle choices (example: typically don’t cover people with a history of recent/current tobacco use, out-of-wedlock pregnancies, etc.).
- Also due to the lack of regulation, consumers have little to no legal recourse if a claim is denied or the ministry goes bankrupt.
- They also carry a potential for greatly increased out-of-pocket costs for members if the ministry experiences financial difficulties.
Who/what is this good for?
- This option is often appealing to people who are young, healthy, have no pre-existing conditions, and are looking for something affordable, or if their beliefs align with those of the ministry’s ethical principles.
Notes:
- While members can see any provider without the restriction of a network or need for referral, there is no guarantee they’ll be able to find a provider willing to accept the sharing ministry coverage.
- If a ministry primarily attracts healthy individuals, it may create a smaller, sicker risk pool in the broader insurance market, leading to higher premiums and fewer choices.
- May require members to attend church regularly, abstain from tobacco and illegal drugs, and attest to a specific statement of faith.
Definition:
- A healthcare model where patients pay a monthly membership fee to a physician or practice for access to comprehensive primary care services, bypassing traditional insurance-based billing. (AKA subscription health plans, concierge care plans)
Pros:
- Predictable costs, enhanced doctor-patient relationships, and increased access to care, particularly for patients with chronic conditions.
Cons:
- The need for supplemental insurance coverage for specialized care, potential limitations in access to care in certain areas, and the need for patients to pay a fixed monthly fee for membership.
Who/what is this good for?
- DPC is a popular choice for individuals or families who prioritize access to their primary care provider, want personalized care, and value transparent costs.
- May also be a good choice for those seeking a more flexible and convenient healthcare experience, particularly those who travel frequently, have small children, or require regular monitoring for chronic conditions.
Notes:
- Evaluate your health needs, budget, and preferences before choosing Direct Primary Care. Because DPC arrangements are often paired with high-deductible health plans, they might not be the best choice for everyone. However, if you’re considering a HDHP or already have one, DPC membership might make sense for you.
- It might make more sense to go with the HDHP and a health savings account to keep expenses in check.
- As with all options, you need to make sure it makes financial sense for YOUR circumstances.
Direct Primary Care (DPC): A Consumer's Guide to This Payment Model
Definition:
- Available both in and out of the Health Insurance Marketplace®, catastrophic health insurance is a type of medical coverage open to people under 30 years of age and adults of any age who have a government-approved general hardship exemption. It has lower premiums than most metal-level Marketplace plans, but the highest possible deductible and out-of-pocket (OOP) maximum.
Pros:
- Lower monthly premiums compared to other health insurance options.
- Protection against major medical expenses (serious accidents or illnesses).
- Essential health benefits (EHBs) are covered after the deductible is met.
- Many preventive services are 100% covered, even before the deductible is met. (Thanks, ACA!)
- Can be a suitable choice for generally healthy young adults needing coverage for major medical events
Cons:
- High deductibles mean substantial OOP costs must be paid before insurance coverage begins.
- Routine doctor visits and prescriptions billed at full cost until the high deductible is met.
- Eligibility is restricted to individuals under 30 or those who qualify for a hardship exemption.
- Ineligible for premium subsidies to lower the cost of these plans.
- Those with ongoing healthcare needs may end up paying more compared to plans with lower deductibles due to higher OOP costs.
Who/what is this good for?
- Catastrophic health insurance policies are best for people who are young and healthy without ongoing health conditions that need regular care.
- They can be a cost-effective option for people who want basic health insurance coverage without paying for expensive premiums.
- However, it's important to note that these plans are not suitable for individuals who anticipate having significant medical costs or chronic health conditions.
Notes:
- Catastrophic plans do not meet the IRS rules for HSA-qualified high deductible health plans (HDHP). A person enrolled in a catastrophic plan cannot make contributions to a health savings account (HSA).
- Deductibles are higher than the allowable limits for HDHPs (in 2025, the deductible and OOP max for a catastrophic plan is $9,200).
What is a catastrophic health insurance plan? | healthinsurance.org
Medical Services Discount Cards/Discount Health Care Programs/Medical Discount Plans
AUTHOR’S NOTE: The thing I noticed immediately when researching discount cards/plans/programs was the consistent warning to be cautious above all else. These programs are notorious for being scams or for misrepresenting the extent to which they cover costs for consumers.
BEWARE THE “BARGAIN”
“You want to get the best medical care you can at the best price. One option to help you do that is a discount health plan. These work sort of like coupons: They provide you with discounts on medical procedures or other medical costs, such as prescriptions.
So what’s the catch? It’s a big one: Discount health plans are not health insurance. And they’re not a substitute for it, either. They don’t provide the protections that insurance plans offer.
Because discount plans aren’t health insurance, they can be purchased from private companies and are regulated on a state-by-state basis.
What discount health plans might do is provide you with additional savings on products and services that may not be included or covered under your health insurance plan.”
Is a Discount Health Plan Right for You? - Healthmarkets Agents/Content/Plans
Definition:
- Discount healthcare programs are designed to offer savings on healthcare services and/or meds, but they are not insurance. They typically involve paying a fee (monthly or annual) to access discounted rates from participating providers. These programs are not a substitute for health insurance and do not provide the same protections.
Pros:
- Lower monthly fees than health insurance premiums
- Can help reduce OOP costs for uninsured and underinsured consumers, and those with high deductible plans
- No waiting periods or medical underwriting makes them accessible to a wider range of individuals
Cons:
- Not Insurance: Discount cards/plans don't cover medical bills or pay claims; instead, they offer discounts on services.
- Limited Network: Discounts are only available from participating providers within the plan's network, potentially limiting your choice of doctors and specialists.
- No Financial Protection: Unlike health insurance, discount plans don't offer financial protection against catastrophic medical events like serious illnesses or hospitalizations.
- Potential for Deceptive Practices: Some discount plans may exaggerate potential savings or use misleading marketing tactics. Always verify the legitimacy of a plan and carefully review its terms before enrolling.
- May Not Cover All Needs: Some plans may not offer discounts on all services or may have limitations on coverage for certain conditions.
Who/what is this good for?
- Individuals without health insurance or those underinsured may find these programs helpful for reducing out-of-pocket costs for healthcare.
Important considerations
- Verify Provider Participation: Before enrolling, confirm that your preferred doctors and other healthcare providers participate in the discount plan's network and offer the promised discounts.
- Compare Costs and Benefits: Evaluate the plan's monthly fees, enrollment costs, and potential savings against the cost of healthcare services you anticipate needing.
- Read the Fine Print: Carefully review the plan's terms and conditions, including any limitations, exclusions, or waiting periods.
- Be Wary of Scams: Be cautious of plans that make unrealistic promises, use high-pressure sales tactics, or refuse to provide clear information about their offerings.
RED FLAGS
Be wary of programs that:
- Claim excessive discounts (e.g., 80% off)
- Refuse to provide written information about the plan
- Pressure you to buy immediately.
- Require large upfront fees or debit/credit card information.
Definition:
- Association Health Plans (AHPs) are group health insurance plans that allow small businesses, self-employed individuals, and associations to band together to purchase healthcare coverage, potentially at lower costs than individual plans. They operate like large-group health plans, allowing participants to access broader benefits and potentially lower premiums by sharing risk and negotiating collectively.
Pros:
- Cost Savings: AHPs can significantly reduce healthcare costs for individuals and small businesses.
- Broader Coverage Options: AHPs can offer a wider range of benefits and coverage options than individual plans.
- Access to Large Group Rates: AHPs allow participants to access the cost-saving advantages of large-group health plans.
- Flexibility in Plan Design: AHPs can be designed to meet the specific needs of their members.
- Compatibility with Health Savings Accounts (HSAs): Many AHPs are compatible with HSAs, allowing participants to save money on healthcare costs.
Cons:
- Membership Requirements: AHPs may have specific membership requirements, such as being part of a particular industry or profession.
- Regulatory Differences: AHPs may be subject to different regulations than traditional employer-sponsored health plans, which can affect coverage and costs.
- State and Federal Laws: AHPs are subject to both state and federal laws, which can affect plan design and coverage.
Who/what is this good for?
- AHPs offer a way for individuals and small businesses to access the benefits and cost-saving advantages of large-group health plans, making healthcare more affordable and accessible.
Notes:
- There are many kinds of association health plans. Some are set up by member-based associations, while others are set up by employers. Association plans are sometimes exempt from state and federal laws and might not cover as many services as major medical plans. If you have to join an association to buy its plan, look carefully at the membership dues, the plan’s coverage, and its consumer reviews.
Things to remember about association health plans:
- Must be a real association with a purpose other than offering health insurance.
- Can consider someone’s health condition when setting premiums.
- Provide coverage to employers with at least one employee who isn't a spouse.
- Can't offer coverage to self-employed people with no employees.
- Your business may need to meet certain requirements to buy an association health plan.
- Your health may affect the cost of your premium.
Association health plans | Office of the Insurance Commissioner
- HDHP: A high-deductible health plan (HDHP) is a type of health insurance that typically has lower monthly premiums but a higher annual deductible than traditional plans. This means you'll pay more out-of-pocket for medical care until you meet your deductible before your insurance begins to cover costs. HDHPs are often paired with a health savings account (HSA) to help offset those out-of-pocket expenses.
- QHP: As defined in the Affordable Care Act (ACA), a qualified health plan (QHP) is an insurance plan that is certified by the Health Insurance Marketplace, provides essential health benefits (EHBs), follows established limits on cost sharing, and meets other requirements outlined within the application process.
- EHBs: Essential Health Benefits (EHBs), mandated by the Affordable Care Act (ACA), are a minimum set of healthcare services that most health insurance plans in the individual and small group markets must cover. These benefits are defined broadly into ten categories.
- MEC: Minimum Essential Coverage (MEC) refers to health insurance plans that meet the Affordable Care Act (ACA) requirement for having health coverage, generally including preventive services like checkups and vaccinations.
- ACA: The Affordable Care Act (ACA) is a comprehensive reform law, enacted in 2010, that increases health insurance coverage for the uninsured and implements reforms to the health insurance market.
- SEP: A Special Enrollment Period (SEP) is a timeframe, outside of the regular open enrollment period, when individuals can enroll in or change their health insurance coverage due to a specific qualifying life event. These events, like marriage, birth of a child, or loss of coverage, allow individuals to enroll or switch plans even when the open enrollment period has passed.
- Pre existing conditions: A pre-existing condition is a medical illness or injury that a person has before they sign up for or start a new health insurance plan. It's essentially a health issue that exists prior to the effective date of coverage.
- Annual caps/limits: The yearly maximum amount that the insurance company will pay for the benefits for which you are covered.
- OOP costs: Out-of-pocket costs refers to money paid by the enrollee on medical expenses other than premiums. Deductibles, copayments, and coinsurance fees are all examples of out-of-pocket costs. Out-of-pocket costs are normally capped by a MOOP (max out-of-pocket) provision within a health plan.
Spot Health Insurance Scams | Consumer Advice
Be Careful with Strategies to Lower Healthcare Costs
A guide to short-term health insurance
ACA vs Short-Term Health Insurance
What is minimum essential coverage? | healthinsurance.org
Popular health insurance alternatives
Healthcare sharing ministries: A leap of faith?
Healthcare sharing ministry pros & cons
Navigating the Pros and Cons of Healthshare Plans
Direct Primary Care (DPC): A Consumer's Guide to This Payment Model
Pondering direct care? 13 potential benefits and drawbacks | American Medical Association
Catastrophic health plans | HealthCare.gov
What is a catastrophic health insurance plan? | healthinsurance.org
What is a Catastrophic health plan? | KFF
Catastrophic Health Insurance: What It Is, How It Works
How to Know If Catastrophic Health Insurance Is Right for You
What is a medical discount plan? | healthinsurance.org
Is a Discount Health Plan Right for You? - Healthmarkets Agents/Content/Plans
Be Careful When Purchasing a Discount Health Card
Association Health Plans - Actuary.org
The Virtues and Vices of Association Health Plans
Association health plans | Office of the Insurance Commissioner
Broken link? How embarrassing! Please email me and let me know so I can fix it ASAP!
In conclusion
There are plenty of programs and plans being presented as “alternatives to health insurance” but none truly are. This doesn’t mean they won’t work for you. They could be a great option but the key, as always, is to make sure whatever option you choose is right for your specific needs and circumstances.
It’s always important to learn about any product you’re considering before making a purchase but even more important in this instance. Predatory individuals and companies see a big opportunity when people are vulnerable and with so many on the brink of losing coverage or facing costs that just aren’t sustainable, the scams and scammers are getting ready to take full advantage of consumers’ desperation.
If you want to explore these options, start shopping around as soon as possible so you will have plenty of time to investigate any product/service you’re considering, and so you won’t have to make quick decisions that may lead to regret later.
Keep watching my blog for a full article about each of the options listed above with an in depth look at exactly what they offer and how they provide it. The list of changes that are right around the corner for the ACA and Marketplace insurance is significant and it’s going to be important for all of us to move forward with eyes wide open to make informed choices for ourselves and our families.
Have a great day and thank you for your interest! As always, please contact me if you have questions, comments, or need help with anything. I’m happy to help in any way that I can.
Health Insurance Marketplace® is a registered service mark of the U.S. Department of Health & Human Services.
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