MICHIGAN — Congress decided late last year not to extend enhanced marketplace tax credits, prompting some consumers to turn to cheaper, non-ACA-compliant health insurance alternatives. Melanie Miller, a 59-year-old retired teacher who moved from Ohio to Michigan, saw her monthly premium rise from about $361 to $914 and switched to two alternative plans costing a combined $341 per month.
Neither of Miller’s new plans meets federal standards for comprehensive coverage under the Affordable Care Act. One covers routine and urgent care, while the other pays a flat $2,000 for a hospital stay—far below the average $30,000 cost of such care. "I don’t gamble. But I may as well. This is gambling," Miller said.
Alternative health plans include short-term policies, fixed-indemnity plans, and healthcare sharing ministries. These products are not required to cover essential health benefits like preventive care, can deny claims without offering consumers robust appeal rights, and often exclude preexisting conditions. Fixed-indemnity plans pay set amounts per service regardless of actual medical costs and are designed for supplemental use, not as primary coverage.
Miller is now considering dropping her preventive care policy because she has struggled to find in-network providers in her area. "I have not had a good experience with it," she said. Critics argue that major problems arise when people rely on these limited plans as their main insurance and later face major medical expenses they cannot afford.
A 2023 peer-reviewed study found that only half of participants understood prescription drugs were not covered after reviewing a summary of a short-term policy’s benefits and its non-ACA-compliant status. Insurance industry insiders report that alternative plan marketers have increased outreach following the expiration of enhanced subsidies. Brian Blase, president of Paragon Health Institute, defended consumer choice in health coverage, saying, "People should be able to spend their own money financing healthcare the way that works best for them." His organization had advocated for ending the enhanced tax credits, arguing they encouraged improper enrollment through incentives for unscrupulous brokers. Amy Killelea, an assistant research professor at Georgetown University’s Center on Health Insurance Reforms, offered a cautionary perspective: "Humans have bodies that can fail them."