Rising ACA Health Plan Costs Prompt Shoppers to Explore Alternatives

As the January 15, 2026, deadline for selecting Affordable Care Act (ACA) health plans approaches, millions of Americans face significant premium increases and the expiration of enhanced tax subsidies. This situation has prompted many to seek advice from insurance brokers or ACA marketplace call center representatives. According to Audrey Morse Gasteier, executive director of the Massachusetts Health Connector, “We’re hearing from people with complex medical conditions who don’t think they can survive if they don’t have access to medical care.” In light of rising costs, some individuals are considering options outside the ACA, although this path requires careful consideration.

Congress has not indicated plans to extend the enhanced subsidies before the year’s end. On the evening of December 6, 2023, the House passed a conservative-backed package that does not address the subsidies, which is largely seen as unlikely to progress in the Senate. Earlier that day, four Republican moderates aligned with Democrats to initiate a discharge petition aimed at forcing a vote on a potential three-year extension in January. Should this measure pass, it could allow for retroactive application of the subsidies, contingent on approval from the Senate and President Trump.

The open enrollment period for ACA plans is rapidly closing, with the final day set for January 15. Those seeking coverage beginning February 1 must act soon, as enrollment for plans starting January 1 has already closed. Given the urgency, shoppers must consider five critical factors when evaluating their health insurance options.

Understanding Short-Term Plans and Their Risks

Some ACA shoppers might contemplate short-term insurance plans available outside government-run marketplaces. These plans, designed for temporary coverage during life transitions, can appear similar to traditional insurance but often come with significant limitations. They typically do not meet ACA compliance standards, which means they may impose annual and lifetime caps on benefits, exclude maternity care, and potentially not cover prescription drugs.

Most short-term plans require applicants to complete a medical questionnaire, allowing insurers to deny coverage or retroactively cancel policies for those with preexisting conditions. Additionally, if a medical issue arises during the coverage period, renewal may not be guaranteed. Critics have dubbed these plans “junk insurance” due to their shortcomings.

Ronnell Nolan, president and CEO of Health Agents of America, cautions, “They’re not for everyone. You have to be healthy.” These plans are only available in 36 states, with states like California imposing strict prohibitions.

Exploring Alternative Coverage Options

Shoppers should also be aware of indemnity plans, which supplement traditional health insurance by covering deductibles or copayments. However, similar to short-term plans, indemnity plans do not adhere to ACA coverage rules, often resulting in insufficient payouts for medical expenses.

Faith-based sharing plans offer another alternative. These plans pool member contributions to cover medical bills but are not classified as insurance and are not bound by the same financial guarantees as traditional plans. The Commonwealth Fund has raised concerns regarding the lack of oversight and potential for fraud in these arrangements.

While these options may be cheaper, Nolan warns, “It would be my last resort.” Shoppers should thoroughly evaluate these plans and understand their limitations.

Evaluating ACA Plan Tiers

For those determined to stay within the ACA framework, plans categorized as “catastrophic” or “bronze” typically offer the lowest premiums. Jessica Altman, executive director of California’s ACA exchange, has noted an increase in enrollments for bronze-level plans. While these plans feature lower premiums, they come with high annual deductibles, averaging nearly $7,500 nationally, according to the Kaiser Family Foundation (KFF).

Additionally, new eligibility criteria for catastrophic plans, previously limited to those under 30, now extend to individuals losing subsidies due to the expiration of enhanced tax credits. These plans are designed for those seeking coverage for severe health events and can carry deductibles approaching the ACA’s out-of-pocket limits, which stand at $10,600 for individuals and $21,200 for families.

Insurance broker Lauren Jenkins explains that clients earning below $25,000 may have qualified for low-cost plans this year, but next year’s costs could rise significantly. As a result, she is advising them to consider bronze plans, which could still lead to unaffordable deductibles.

Shopping Strategies for Lower Premiums

Consumers are encouraged to shop around, as switching to a different plan—even within the same insurance company—could yield lower premiums. Coverage levels vary from bronze to platinum, and surprising pricing structures can lead to gold-level plans being more affordable than silver plans in certain regions.

Additionally, individuals who are self-employed with only one employee may qualify for group plans, which can be less expensive than individual policies. Nolan cites a case where a client, with his wife as the sole employee, is exploring this option for potential savings.

Preparing for the Enrollment Deadline

As the enrollment deadline looms, experts advise people to take preliminary steps sooner rather than later. Shoppers should visit the official federal or state marketplace websites to update their applications with necessary income and personal information. Although subsidies will remain available, they will be smaller, and there are income limits for households earning over four times the poverty level, which is set at $62,600 for individuals and $84,600 for couples in 2026.

Consumers must ensure they access authentic ACA websites, as look-alike sites may not offer compliant plans. The official site, Healthcare.gov, provides pathways to state exchanges and connects consumers with licensed brokers and counselors to assist with applications. Lastly, remember that paying the first month’s premium is essential for coverage activation.

As the health insurance landscape evolves, understanding these options and their implications is critical for navigating the challenges of the upcoming enrollment period.