4 Effective, Affordable Alternatives to Health Insurance

by Nick Versaw Updated November 19th, 2021

Alternatives to health insurance: mother and daughter consulting a doctor

In the United States, more than two-thirds of people get their health insurance coverage from private insurance companies. Half of this coverage is provided by employers. If you’re one of the many Americans who’s ineligible for a health insurance plan through these routine methods, understanding how to get coverage can be difficult. 

Without health insurance coverage, medical expenses can quickly shoot through the roof, particularly if you have a preexisting condition, require prescription drugs on a regular basis, or need frequent care for a pre-existing condition

Thankfully, there are four major alternatives to health insurance to explore. These are the best fit if you’re unemployed, denied private insurance, or employed by a small business that doesn’t offer health insurance.

These programs offer a wide range of coverage, from bare bones essential benefits, to more expanded coverage for mental health and preventative care, like many traditional health insurance plans offer. 

Your Options: 4 Alternatives to Health Insurance

There are a variety of insurance products for people who are unable to get coverage through traditional methods. Many of these medical plans require a monthly premium or monthly fee. And while many of these alternatives to health insurance have high deductibles and higher insurance premiums than conventional coverage options, they can still make paying for basic medical services more affordable than having no insurance at all.

Affordable Care Act Plans

The passage of the Affordable Care Act (ACA, or “Obamacare”) in 2010 created a health insurance Marketplace operated by the U.S. federal government. 

Eligibility for plans offered by the ACA varies from state to state. It’s determined by factors such as personal income, marriage status, and number of dependents. All of these factors can affect copays, health care costs, and out-of-pocket costs for the ACA plan you choose.

That said, there are numerous benefits to choosing insurance on the federal health insurance marketplace

For instance, enrollees in all federally offered health insurance plans offer coverage of 10 “essential” health benefits. These are:

  1. Ambulatory patient services
  2. Emergency services
  3. Hospitalization
  4. Pregnancy, maternity, and newborn care
  5. Mental health and substance abuse disorders
  6. Prescription drugs
  7. Rehabilitation services
  8. Laboratory services
  9. Preventative wellness and disease management services
  10. Pediatric services

It’s worth noting that dental and vision care for adults are not considered essential health benefits under ACA insurance programs.

If you’re interested in getting health insurance coverage through an ACA plan, you can get an estimate of potential plan prices when you register at healthcare.gov

Association Health Plan

Patient handing a card to a doctor

Another potential alternative to health insurance is an association health plan, or AHP. An AHP is a type of group medical insurance coverage that allows small businesses as well as freelance and self-employed professionals to access conventional health insurance programs.

One advantage of choosing an AHP insurance program is that they’re often less expensive than health insurance coverage offered through the federal government. AHPs also tend to offer income-based reductions on the cost of many medical services.

That said, AHPs rarely, if ever, cover nonessential care, which is a stark contrast to many health insurance programs. In addition, the selection of providers you can choose for care is often limited within AHP programs. AHPs also do not cover many of the “essential health benefits” outlined by plans in the federal health insurance marketplace.  

In addition to providing basic insurance coverage for a variety of situations, several AHPs offer coverage for pre-existing conditions. If you’re sick or have a health problem prior to choosing an AHP, you can’t be denied coverage just because your medical expenses may be higher than an otherwise healthy person.

More information on association health plans including types of coverage and how to apply is available at: associationhealthplans.com.

Medical Cost-Sharing Programs

Alternatives to health insurance: elderly couple talking to a nurse

A medical cost-sharing program is made up of a large group of people who pool their money to pay their medical bills. These programs are almost always faith-based initiatives that are associated with churches or other religious organizations. That’s also why medical cost-sharing programs are sometimes referred to as “health care sharing ministries.”

Medical-cost sharing programs are run by nonprofits rather than private insurance companies. Members pay a monthly fee, which goes into a group fund. When a member of the group receives a bill for medical services or treatment, the cost-sharing fund pays some or all of the cost.

Medical cost-sharing programs are a good choice for healthy people who don’t have health insurance coverage and are looking for a short-term plan, or are experiencing a lack of coverage due missing an open enrollment period. They’re also feasible for those who can’t afford private health insurance premiums.

That said, the religious-based nature of these programs may mean participants can’t get costs covered for things that contradict a certain set of beliefs. This might mean an alcohol-related accident or birth control might not be eligible for coverage. In addition, they rarely cover pre-existing conditions such as diabetes, nor do they offer supplemental coverage for preventative health care services such as routine physical exams or mental health programs.

One of the more popular medical cost-sharing programs in the United States is run by the Christian Healthcare Ministries, a faith-based program based out of Barberton, Ohio. It should be noted that that applicants must “abstain from practices inconsistent with a biblical lifestyle, including (but not limited to) illegal drugs, tobacco, nicotine, marijuana, any smoking device (including, but not limited to, cigarettes, cigars, pipes, herbal cigarettes, e-cigarettes, vape pens, etc.)” and avoid “sexual immorality” in order to qualify for coverage.

Short-Term Insurance Coverage

Many people lose insurance coverage due to no longer being eligible as a beneficiary of their parents, losing a job, or closing a small business. Short-term health insurance was invented to cover such people. Short-term health insurance is also a potential option for uninsured people who need coverage in the event of an emergency or those who are between jobs and seeking coverage before their new job begins.

While short-term insurance plans cover things like emergency room visits, certain prescription medications, and some doctors appointments, they do not cover essential health benefits like ACA plans do, nor do they cover pre-existing conditions.

Some additional automatic disqualifcations for most short-term insurance companies include: applicants who are technically obese, pregnant, aren’t a legal resident of the United States, or those who are currently insured with another policy. 

Some short-term health insurance providers include Everest, UnitedHealthcare, and Pivot Health, each of which have their own individual qualifications for coverage. 

Making Sure You’re Covered

If you or a family member are without health insurance coverage, there are a number of options available to you. Whenever possible, it’s best to arrange alternative coverage prior to lapses. Receiving medical care without medical insurance coverage of any kind can result in very high out-of-pocket costs for medical care that, depending on the nature of procedure or service, can take years to pay off.

Interested in learning more about the cost of medical procedures or treatment in your region before you seek care? The Compare.com medical cost comparison tool helps you compare costs of several common treatments and procedures in your area.

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