Over the last few years, the number of people opting for alternatives to Obamacare has steadily risen. Just over 8 million people enrolled for Obamacare in 2020, down from over 10 million in 2018 and 2019.
For most people, the reason is clear: alternatives to ACA plans offer cheaper rates and better coverage. This disparity between the ACA and alternatives is especially noteworthy for self-employed individuals and small business owners.
The ACA boasts the most expensive rates for those who are self-employed or own small businesses. When these individuals earn enough through their business and surpass certain thresholds, they no longer receive ACA subsidies for insurance. At this point, it would be wiser to seek alternative options to ACA coverage.
Some of those alternative options include the following.
Limited Benefit Indemnity Insurance
Limited Benefit Indemnity Insurance is a unique form of insurance. These plans provide a fixed sum of money for each medical incident, regardless of its severity. What constitutes a medical incident varies between providers, but they generally cover most operations or appointments.
Typically there are no annual deductibles, and these plans are not subject to ACA regulations. This gives providers a bit more flexibility in both pricing and coverage options.
Popular policy options might cover primary care but little to no inpatient care. Rather than paying for a plan with a $10,000 deductible and $500,000 in coverage, individuals with limited benefit indemnity insurance have no deductibles, lower premiums, and the same $500,000 in coverage.
For young and healthy professionals or small business owners, this option can save a tremendous amount of money.
Short term medical insurance
Short term medical insurance has often been used by individuals seeking just that… short term coverage. However, recent legislation by the Trump Administration has now made it possible for short term coverage to essentially last indefinitely. When it comes for renewal, there will simply be updated policy and coverage options.
These plans often come with coverage reductions and cheaper rates. For that reason, many young professionals, self-employed individuals, and small business owners have opted for short term coverage as an alternative to the ACA. For those facing some economic uncertainty – during a lay off for example – a short term insurance policy can help as well.
Under an ACA policy, a 25-30 year old might pay close to $400 per month for their policy. This would likely include a steep deductible. Short term plans are more flexible, as they are unregulated by the ACA and typically exclude pre-existing conditions, so they can provide the necessary coverage for only $100 – $150 per month.
Ordinarily, short term medical insurance is a great coverage option for gaps in employment or when more expensive alternatives are out of the question. Most individuals would not provide more than a year of coverage. However, recent legislation under the Trump administration essentially eliminates that threat. Short term medical insurance can now be renegotiated year over year. Its affordability and flexibility are making it an increasingly popular option for business owners.