Is it time to look into Non-ACA Plans for those that are overpaying by as much as 400%?

Now that we’re well into the lifecycle of the Affordable Care Act “Obamacare”, what I hear regularly is “my insurance costs have gone up by hundreds of percent in the ACA era.” Now that’s not a fair across-the-board statement….there are some (the minority of covered staff/Americans) who have benefited from guaranteed-issue products that are exclusively offered via That said, the economics of the ACA charge everyone the same rates for the benefit of the chronically ill and often sick, at the expense of the healthy, who rarely use coverage. Those are simple economics of most insurance plans, the healthy pay for the sick.

So what does that leave the healthy to purchase? Simply, non-ACA compliant plans; and that’s not necessarily adverse or bad news for these folks looking for coverage. There are several new entrants in the US marketplace who offer much more affordable options, similar to those available before the ACA era. All of these plans medically underwrite and require honest, complete health questionnaires, similar to purchasing life insurance. It’s not uncommon to be able to buy plans with large annual total coverage (2 million coverage annual for example) maximums that are difficult to exceed inside of a year’s time. Additionally, if someone on one of these plans became ill early in a policy year, or throughout the year, they always have the option to move over to an ACA plan during annual open enrollment. This is one of the deficits of the ACA, as it allows folks to jump into the pool of covered Americans when they need care or are severely ill, and then go back to another coverage medium when they are not ill. This is called adverse selection. It is built into the economics of the ACA.

There has been a lot of venture capital pouring into this area again, as we find ourselves with a new Administration (Biden was there when the ACA rolled out) and a very similar overpriced marketplace for health insurance. The majority of America gets coverage through employers and group plans that are mostly, guaranteed-issue just like the ACA. So that said, the risk-reward we find smaller employers (under 50 full-time employees, which is the majority of businesses in the U.S.) facing is to abandon employer-sponsored plans and move to a defined contribution of dollars being given to staff to buy what is right for themselves. This is a less socialized methodology, as the healthy can buy products at a fraction of the cost of the ill who will need to select an ACA plan at a much higher premium basis. At least half of the employers we talk to, opt to get out of the game of selecting coverage, but rather participating financially in the assistance for staff coverage. This is where an employer can continue to assist staff in affording coverage rather than being on their own without that “subsidy” common in group health insurance.

Today this is only an option for smaller employers with less than 50 eligible staff, and in some states under 100 eligible staff. Unfortunately for the larger employers, group insurance remains the benchmark as the ACA employer mandate is still in place to offer applicable coverage per the structure of the ACA.

Please offer comments and your experience in this matter, as we love to hear from our clients, prospects, and anyone else interested in finding affordable health plans.


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