Alternatives to the Affordable Care Act
Whether it’s because the Open Enrollment Period was missed or the cost of Affordable Care Act plans is simply too high for the budget, there are choices available when it comes to ACA alternatives, or as some misleadingly pitch them, “private plans.” For the record, ALL ACA PLANS, and even Medicare Advantage and Part D plans, are private insurance. The Affordable Care Act, otherwise known as “Obamacare,” is a law that required individual and group health insurance plans to cover ten essential health benefits. When the law was written, states had the choice to either form their own state-based insurance marketplace or participate in the federally facilitated marketplace known as HealthCare.gov.
As time has gone on, many states have chosen to start their own marketplaces and move away from HealthCare.gov. Regardless of what a state has decided, these are still federal dollars involved in the Advanced Premium Tax Credit (APTC). The marketplaces may be operated at the state or federal level, but they are simply a means of qualifying for a tax credit based on projected Modified Adjusted Gross Income (MAGI) for the upcoming year. For example, during Open Enrollment, which runs from November 1 through December 15 for most states, the income being used is projected 2026 MAGI, which will be the same income reported when filing 2026 taxes in 2027. Make no mistake, the plans being offered on these certified exchanges are private insurance options.
When comparing health coverage, the focus should be on whether a plan is compliant, noncompliant, or exempt from ACA regulations. There are three main types of non-ACA plans available: Indemnity Plans, Association Plans, and Short Term Medical Plans.
Indemnity Plans
An indemnity plan pays a fixed amount toward specific medical services regardless of the total cost. Aflac is one of the most recognized examples. These plans often function alongside major medical coverage by helping offset deductibles, copayments, or hospital expenses. For instance, if an indemnity plan specifies a $50 payment for a doctor visit, that is the amount paid directly, no more, no less.
Companies such as Philadelphia American, USHEALTH/Freedom Life, Manhattan Life, and UnitedHealthcare offer similar indemnity-style products. While these plans can help reduce medical costs, they often provide limited protection when used as standalone coverage. For example, a plan that pays $1,500 per day for hospitalization may leave significant financial exposure in the event of a major surgery costing hundreds of thousands of dollars.
Many indemnity plans operate through networks associated with major insurers such as UnitedHealthcare, Cigna, or Aetna, which negotiate medical charges down by approximately 40 to 60%. This can make a meaningful difference, but it is not equivalent to the comprehensive protections of an ACA-compliant plan that covers preexisting conditions and essential health benefits as required by law.
In modern use, indemnity-style products are most effective when combined with a high deductible health plan or another form of coverage that includes a guaranteed stop-loss feature, such as an out-of-pocket maximum (OOP) or maximum out-of-pocket limit (MOOP) on Medicare Advantage plans.
Association and Health Share Plans
Association-based and health share arrangements represent another category of ACA alternatives. These programs are typically offered through religious ministries, professional organizations, or union groups. A common example is the health share (Christian ministry) model, where members contribute monthly amounts to help pay one another’s medical expenses. These associations are often exempt from ACA law and function through collective membership rather than traditional insurance underwriting.
Participation requires adherence to the association’s principles and terms. Claims may be denied if medical expenses conflict with the organization’s stated guidelines or code of conduct. These programs also use their own terminology, often referring to financial obligations as “Member Shared Responsibility Amount” instead of standard insurance terms like deductible or copay.
Professional association and union-based plans are typically governed by the Department of Labor under ERISA regulations, which establish federal standards for employer and group-sponsored benefit programs. These plans operate differently from religious health shares and are subject to specific compliance and disclosure requirements. Associations can offer plans priced based on the makeup of the group and often remain valid across all states being served, which can make them appealing for individuals who move or work across state lines.
While association and health share programs can serve specific populations effectively, they often lack the legal and contractual guarantees of ACA-compliant insurance. Before the Affordable Care Act, medical underwriting determined eligibility year round. With the ACA, all individuals became eligible regardless of health status, but enrollment was restricted to designated periods or qualifying life events such as loss of employer coverage or Medicaid eligibility.
Those managing chronic health conditions or ongoing prescriptions generally find greater protection under ACA-compliant coverage than through health share or association plans. Do It For Me Insurance has plenty of association options, book a phone or zoom appointment with us to discuss more, and please no solicitations they will not be responded to.
Short Term Medical Plans
Short Term Medical, or STM, plans form the third major category of ACA alternatives. Originally created for transitional situations, these plans provided temporary coverage for individuals between jobs or awaiting new insurance to begin.
Underwriting typically consists of a brief health questionnaire. As long as all the answers are “No,” the policy is usually issued. This approach, sometimes referred to as “underwrite later,” means the insurer may review large claims after they occur, and if evidence suggests the condition was pre-existing, the claim can be denied. The availability and maximum duration of coverage vary widely by state.
After the ACA’s introduction, short term medical plans gained popularity among those seeking lower-cost alternatives to marketplace coverage. Some states allowed these policies to last up to a year, prompting federal action to limit durations. The Obama administration, through executive order, restricted them to three months, though multiple consecutive policies could still be purchased to maintain continuous coverage. This became known as the “4×3” model, where four three-month policies were purchased at once to provide up to a full year of coverage.
The first Trump administration, also through executive order, later rescinded those limits, allowing states to set their own rules. Pennsylvania approved terms up to three hundred sixty days, while states such as New Jersey and New York banned them entirely. Several southern states introduced Tri Term plans, allowing three consecutive one-year policies with expanded benefits beginning after the first year.
The Biden administration, again by executive order, reinstated shorter limits, restricting coverage to three months with a one-month renewal period within any twelve-month span. A subsequent executive order has been signed under the current Trump administration to extend availability once again, with further changes expected in the near future.
Short term medical coverage is not comprehensive but can provide a safety net for individuals who miss Open Enrollment or experience a lapse in coverage. These plans typically pay eligible medical expenses after the deductible and coinsurance until reaching a set maximum benefit, often one to two million dollars. UnitedHealthcare’s Short Term Plus Elite A Series plan is one example that can offer reliable temporary protection when properly coordinated. They have been especially popular among individuals who need coverage for a few months to a couple of years before becoming eligible for Medicare.
Final Thoughts
The Affordable Care Act is not without flaws, yet it guarantees coverage for preexisting conditions and establishes consistent standards that alternative plans do not match. Non-ACA options can serve valuable purposes, particularly for short term or supplemental use, but require careful consideration.
Each category offers distinct advantages and trade-offs. Indemnity products can help reduce out-of-pocket expenses when paired correctly, association-based programs can provide access to group-rated options for eligible members, and short term medical plans can serve as temporary coverage solutions between major medical policies. None, however, replicate the stability or consumer protections of ACA-compliant insurance.
As federal and state rules continue to evolve, understanding these differences is essential. Staying informed ensures coverage decisions align with both financial goals and long-term health needs. Do It For Me Insurance is here to help build the ideal package for you, and our services are always fee-free.