Cheaper, Alternative Health Plans Are Having a Moment, but Critics Urge Caution

Congress' decision not to extend enhanced marketplace tax credits has boosted the appeal of alternative health coverage with lower monthly premiums. When Melanie Miller saw that her health insurance premium payment was set to nearly triple to $914 a month this year, she stopped shopping on the Affordable Care Act marketplace.

The 59-year-old retired teacher, who recently moved from Ohio to Michigan, now pays $341 a month for a pair of plans, one that covers routine and urgent care and another that pays fixed amounts for hospital stays. Neither meets federal standards for comprehensive coverage.

Though she practices yoga and is healthy, Miller said she still feels “vulnerable.” If she lands in the hospital, her plan pays a flat $2,000, a fraction of the $30,000 price tag of an average hospital stay. Congress’ decision late last year not to extend enhanced marketplace tax credits has boosted the appeal of alternatives to comprehensive insurance — plans like Miller’s, which have lower premiums but don’t meet ACA standards for coverage or consumer protections.