Rising ACA Premiums Prompt Shift to Alternative Coverage Options
Melanie Miller, a retired educator from Michigan, faced a significant rise in her Affordable Care Act (ACA) marketplace premiums, which nearly tripled to $914 monthly. Consequently, she opted out of the exchange entirely. Now paying $341 monthly for two plans that do not meet federal comprehensive insurance standards, Miller describes her decision as "gambling" with her healthcare coverage.
As the enhancements to ACA premium tax credits expired in 2025, consumers like Miller have seen increased insurance expenses, prompting them to seek less costly alternatives that pose substantial financial risks. A recent Kaiser Family Foundation (KFF) report revealed a 37% increase in ACA marketplace deductibles—from $2,759 in 2025 to $3,786 in 2026—marking the largest increase in the program's history. Concurrently, monthly premiums rose by 58% on average, leading many enrollees to shift from silver to more affordable bronze plans. This shift increased bronze plan enrollment from 30% to 40%, while silver plan enrollment dropped to an all-time low of 43%.
During the 2026 open enrollment period, overall marketplace enrollment fell by over a million. KFF projects a 21.5% decrease in effectuated enrollment, from 22.3 million in 2025 to about 17.5 million, as policyholders struggle with premium payments. Additionally, a KFF survey indicated that 67% of marketplace participants might reduce essential household expenditures if their health costs increased by $1,000 annually.
Alternative Coverage Options Emerge
To bridge the coverage gap, low-premium but limited-benefit policies, such as short-term policies, fixed-indemnity plans, and healthcare sharing ministries, have gained popularity. Short-term policies typically exclude coverage for pre-existing conditions. Fixed-indemnity plans offer fixed payments per service, regardless of actual costs. Healthcare sharing ministries function as faith-based arrangements for sharing medical expenses, though they are not recognized as insurance under federal or state law.
The growth of these alternative plans is noteworthy. For instance, Zion HealthShare, a healthcare sharing ministry, reported a 50% increase in membership since last June, reaching over 75,000 members. Meanwhile, marketing efforts for fixed-indemnity plans have ramped up in anticipation of the enrollment period.
Impact of State Regulations
The regulatory landscape for these alternative coverage options varies widely across states. Some states, like Kansas and Florida, have facilitated short-term plan renewals, while others, such as California and Massachusetts, have banned them altogether. Proponents of these low-cost options argue that restricting them could drive up the uninsured rate. "People should be able to spend their own money financing healthcare the way that works best for them," said Brian Blase, president of the Paragon Health Institute. However, Jade Ramsey, a consumer who faced crippling debt after her insurer rejected claims citing pre-existing conditions, advises consumers to thoroughly scrutinize their policies to ensure they meet coverage needs.