Alternatives to Obamacare, explained plainly

First, what "not ACA" means

ACA plans must accept everyone and cover ten essential health benefits. The alternatives below don't have to.

That can lower the price. It also means gaps, limits and health questions.

Fixed indemnity plans

These pay a set cash amount for each covered service, such as a doctor visit, hospital day or surgery. The money goes to you or the provider.

• Pro: predictable payouts, usually lower premiums
• Drawback: payouts may be far less than your actual bill
• Drawback: not major medical insurance

Hospital indemnity plans

A hospital indemnity plan pays you cash when you're admitted, often per day. Use it for deductibles, rent or anything else.

• Pro: pairs well with any health plan
• Drawback: pays little or nothing for outpatient care
• Drawback: a stand-alone plan won't cover a large hospital bill

Specified disease plans

These pay benefits after a diagnosis of a named illness, such as cancer, heart attack or stroke. Some pay large lump sums.

• Pro: strong big-bill protection for the conditions listed
• Drawback: covers only those conditions, not everyday care
• Drawback: meant to supplement other coverage, never replace it

Level-funded and association plans

Level-funded plans let a small business or self-employed person pay a fixed monthly amount, with the plan funding claims behind the scenes. Association plans offer coverage through membership in a group.

• Pro: can use large PPO networks, such as Cigna's
• Drawback: health questions and eligibility rules apply
• Drawback: rules and availability vary by state

Short-term health plans

Short-term plans cover a limited period, typically a few months. Federal and state rules restrict how long they can last.

• Pro: quick start, useful for a short gap
• Drawback: usually exclude pre-existing conditions
• Drawback: benefit caps and no renewal guarantee

Layering: the realistic approach

Many people combine a base plan with hospital indemnity and specified disease coverage. Together they can cover more ground than any one alone.

A licensed advisor can show you exactly what the combination does — and doesn't — pay.

How to compare alternatives honestly

Alternatives are easiest to judge with a worst-case example. Picture a three-day hospital stay and ask what each plan would actually pay.

Then compare that payout with the bill. The difference is what you'd owe, and it's the number that matters most.

• Is it major medical, or does it pay set amounts?
• Are pre-existing conditions excluded or delayed?
• Are there annual or lifetime benefit caps?
• Is renewal guaranteed, and can the rate change?
• What does it pay for outpatient care and prescriptions?

Health sharing ministries are different

You may also see health sharing ministries. Members share medical costs, but these programs are not insurance and have no legal obligation to pay a claim.

If you consider one, read the membership guidelines closely, especially the rules on pre-existing conditions and caps.

When the ACA is still the better choice

Alternatives can save money, but the exchange is the safer pick in several situations. Be honest with yourself about your health and budget.

If any of these apply, compare an exchange plan first and treat alternatives as add-ons rather than replacements.

• You have a chronic condition or ongoing treatment
• You're pregnant or planning a pregnancy
• Your subsidy covers most of the premium
• You want guaranteed renewal with no health questions