HEALTH COVERAGE CONSUMERS SHOULD BE WARY OF SUBPAR PRODUCTS

The following information was released by the Center on Budget & Policy Priorities (CBPP):

Open enrollment for marketplace plans for 2027 health coverage is approaching beginning November 1 in most states and millions of people will be looking for health coverage. Facing significant affordability changes and, in many cases, paying more for less generous coverage, some may turn to subpar health products offered outside the marketplace, or companies may target them with aggressive marketing for such products. But these subpar products lack benefits and consumer protections that are standard in Affordable Care Act (ACA) plans.

The expiration of premium tax credit enhancements at the end of 2025, Trump Administration policies that limit eligibility and enrollment, and rising premiums have left millions of people struggling to afford comprehensive coverage. Nearly 3 million fewer people were enrolled in marketplace health insurance in February 2026, compared to the previous year, a 13 percent decrease. And 17 percent of those who remained enrolled said they were not confident they'd be able to afford their premiums all year.

Some people may seek out subpar health coverage products when looking for lower-premium coverage for 2027. Also, research suggests that some agents and brokers steer healthier consumers into non-ACA compliant plans and products in misleading ways. Unlike qualified health plans offered on the ACA marketplaces, subpar products do not have to meet ACA standards to provide comprehensive coverage to all people, including those with pre-existing conditions.

Some of these options, like short-term, limited-duration insurance, provide only minimal coverage, often leaving out maternity and mental health care, substance use disorder treatment, and prescription drugs and charging higher premiums to people with health conditions.

Other options may appear to be equivalent to insurance but are not; they fall outside the purview of insurance regulators who are tasked with protecting consumers. Examples include health plans that Farm Bureaus offer to their members and health care sharing ministries, where members pay monthly fees to cover other members' health expenses.

Some states have helped create markets for subpar products through legislation. Many states have defined Farm Bureau plans as not insurance to exempt them from state insurance oversight and protections. Indiana, Kansas, Missouri, and Montana allow contributions to health care sharing ministries, which have no obligations to pay members' medical costs, to be deductible from state income taxes.

Some subpar health plans differ from ACA marketplace plans in important ways. This table shows how four such products that people looking for individual coverage might confront bypass consumer protections and regulations.

1 Essential health benefits: A set of ten categories of services that plans in the individual market must cover under the ACA, such as doctors' services, inpatient and outpatient hospital care, prescription drug coverage, pregnancy and childbirth, and mental health services. Some plans cover more services.

2 Short-term, limited-duration insurance (STLDI): A type of coverage originally designed to fill temporary coverage gaps for individuals transitioning from one plan or coverage to another. A 2024 federal rule limits STLDI to a three-month contract term and a maximum total coverage period of up to 12 months, including renewals and extensions, but the Trump Administration has decided not to enforce this regulation.

3 Farm Bureau health plan: A plan offered by a Farm Bureau to its members. (The Farm Bureau is an organization of people affiliated with the agricultural industry, but typically anyone who pays a membership fee can apply for a Farm Bureau health plan.) These plans are not comprehensive coverage and are not subject to ACA requirements.

4 Health care sharing ministry: A membership group, often among people sharing certain religious or ethical beliefs, in which members contribute monthly into a pool of money used to pay for other members' medical costs. Membership may be limited based on health status or other characteristics, and there is no guarantee for costs to be covered. This is not insurance and not subject to state or federal insurance regulations.

5 Excepted benefit/fixed indemnity plan: An excepted benefits plan offers coverage for specific services, diseases, or illnesses; it is not considered comprehensive coverage subject to ACA regulations. A fixed indemnity plan is type of excepted benefit plan that provides enrollees with a fixed cash benefit when a health-related event or service occurs.