Are Affordable Health Plans Really Affordable?

With inflation on the rise and an uncertain job market, choosing the right healthcare coverage is more important than ever. 

Most people know about health insurance through employer plans or government sponsored plans, for example the Affordable Care Act (ACA).  However, are ACA plans really affordable if you need to find a health plan on your own? 

Key Points

• The Affordable Care Act previously known as “Obamacare” was designed to provide lower cost health insurance for most Americans.
• However, ACA plans are not always affordable for everyone. The same ACA plan can cost $0 OR as much as $800/month depending on someone’s income level.
• If your household income is 100-400% of the federal poverty level, you will qualify for lower ACA plan premiums on a sliding scale. For example, an eligible single person can earn from $13,590 to $54,360 to qualify for lower premiums. Rest of others pay much more.
• But there are other options –– There are non-ACA plans that could provide good coverage for your health needs, at less than half the cost of an ACA plan for people who don’t get subsidies on ACA.  
• It’s important to understand your specific needs when assessing ACA vs non-ACA health insurance programs.

What Happened Since the Affordable Care Act Was Written?

When the ACA was written, it was assumed that coverage would be affordable without subsidies at most income levels.  

But, because premium costs have increased so much in some areas of the country,  healthcare costs can easily exceed 25% of household income for a family that is just a little above 400% of the poverty level.  

• Check out this online calculator to help you determine your ACA monthly cost.

ACA vs. Non-ACA Plans 

Most ACA plans are HMO-type, so it’s important to have a Primary Care Physician and to carefully check if your doctors are in network.  Other features include: 

• Asking about pre-existing conditions when applying is not allowed.  
• There is a fixed enrollment period, usually between November and January.  
• If you don’t qualify for subsidies, plan costs can be very high. 
• Medical care is comprehensive but high deductibles can be an issue.  

Non-ACA health plans are usually PPOs with a broad network (over 90%) of US doctors and hospitals included. Doctor visits, hospital, surgery, and labs are all covered expenses.  Other key aspects are:

• There are no enrollment time limits.  
• You  can often find coverage within a day or two before the effective date. 
• Plan costs and deductibles are lower than ACA plans without subsidies.
• These plans are considered private insurance.  A few short medical questions must be answered to assess  general health needs and your eligibility for certain plans.   

Recommendations:

• Assess your healthcare needs carefully and shop around for the best affordable plan for you and your family.  
• Find out if you would have to pay back any subsidies if your income level changes.  
• If you’re generally healthy, consider private, non-ACA plans that have some limits but might give you the coverage you need.    
• For more information on upcoming changes to ACA enrollment and plan selection, check out this recent article.

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