Jesse Smedley is the Principal Broker for iHealthBrokers and the founder, president, and CEO of Smedley Insurance Group, Inc. and iHealthBrokers.com. Since the inception of SIG in 2007, Jesse has been dedicated to helping people save money on their health insurance by providing them with resources to educate themselves on all their health insurance options, both under age 65 and Medicare beneficiaries. He is featured in many publications as well as writes regularly for expert columns regarding health insurance and Medicare.
This year, many consumers looking at 2026 ACA Marketplace plans have been shocked by rising costs!
Premiums are increasing, out-of-pocket maximums are going up, and premium tax credits may shrink dramatically. So if you absolutely can’t afford a marketplace plan, what are your other options?
Rising Costs
For the past few years, ACA plans were artificially affordable due. Enhanced premium tax credits under the American Rescue Plan Act (ARPA) and Inflation Reduction Act (IRA) meant that most Americans were eligible for a plan under $10! This boosted enrollment tremendously.
These laws created expanded premium tax credits so that no household paid more than ~8.5% of income toward premiums. Many middle-income families received subsidies for the first time with the elimination of the subsidy cliff.
What Happens Now?
These enhanced subsidies expire at the end of 2025. If Congress does not act, premiums can rise up to 75% for some families. Sadly, most people relying on Marketplace subsidies will feel major financial strain. Many will choose to forego insurance entirely if it becomes unaffordable.
Rising Out-of-Pocket Maximums
Premiums are not the only cost on the rise. Out-of-pocket maximums are increasing as well. The out-of-pocket maximum (OOPM) is the most you pay for covered in-network services before the plan covers 100%.
Although these have always been high for Marketplace plans, 2026 is worse! In 2026, the max OOP max is. $10,600 for an individual plan and $21,200 for a family plan.
Even though OOP maximums offer protection from huge medical bills, they are still far beyond what many families can afford.
Lower Your Premium
Your eligibility for a premium tax credit (PTC) is determined by your MAGI (Modified Adjusted Gross Income). Even if enhanced subsidies expire, PTCs still exist, and lowering your MAGI can dramatically increase them.
Pre-Tax Retirement Contributions
Traditional retirement accounts can reduce taxable income. If it’s financially feasible, contribute the maximum allowable. Make sure to consult your tax advisor or financial planner for more strategies!
Self-Employed Health Insurance Deduction
Also, if you are self-employed, you may be able to deduct your ACA premiums! We recommend working with an insurance broker and a tax professional.
Open and Fund a Health Savings Account (HSA)
The easiest strategy may be to utilize a Health Savings Account (HSA). Starting inhttp://”about us”https://ihealthbrokers.com/about-ihealthbrokers-medicare-advisors/ 2026, all Bronze Plans will be eligible for HSAs in addition to several regular HDHPs (High Deductible Health Plans).
HSAs offer what’s known as the triple tax advantage. Pre-tax contributions reduce MAGI. Additionally, these accounts are interest bearing and the interest grows tax-free. You can even invest most of your account, and the earnings are tax-free.
Withdrawals for qualified medical expenses are not penalized, and funds roll over annually — you never lose them. If you hold onto your HSA until you retire, you can convert it to a retirement account at age 65.
In 2026, the maximum contribution for an individual is $4,400, and for a family it is $8,750.
Even lowering MAGI by $3,000–$5,000 can push you into a more favorable PTC bracket — often saving thousands per year!
Pick the Right Plan!
Marketplace plans vary widely in premiums, deductibles, out-of-pocket maximums, prescription coverage, and networks. Choosing poorly can cost you majorly.
Costs are balanced in one way or another. Low premium or low metal tier plans may have higher deductibles, cost sharing or out pocket maximums. These plans are better for people who rarely use healthcare, want catastrophic protection, and/or need to minimize monthly expenses.
Conversely, higher premium or higher metal tier plans often have lower deductibles, cost sharing or out of pocket maximums. These types of plans are better for people with more extensive medical needs.
And if you are eligible for cost sharing reductions, a silver plan is often the best option.
Short-Term Medical Plans
Despite your best efforts, at this time, a marketplace plan may just be unaffordable. But there are other options as well. As of now, most states allow up to 3 years of short-term coverage. STM can offer much lower premiums for younger, healthier individuals. Additionally, they offer nationwide PPO options and allow you to tailor the plan more specifically to your needs.
However, they will not cover pre-existing conditions (although some may cover more basic conditions after the first year of a multi year plan). Because medical underwriting is required, you can be denied or charged more. Also, there is no pregnancy/maternity coverage, and they may not cover more extensive conditions.
Lump-Sum Payout Coverage
There are also lump sum payout plans, such as critical illness plans or hospital indemnity plans. A critical illness plan will pay a lump sum if you are diagnosed with covered conditions (cancer, heart attack, stroke, etc.). Similarly, hospital indemnity plans will pay cash for hospital stays, surgeries, ICU, etc.
These do not replace insurance but help with large unexpected expenses. You can use the payout for medical bills, but you can also use it however you see fit (mortgage, groceries, etc…)
Catastrophic Coverage Plans
There are also catastrophic coverage plans. These are available on and off the Marketplace.
These are bare bones plans with very low premiums and very high deductibles. They are designed strictly for protection from major medical events.
The marketplace is a little stricter with catastrophic coverage plans. You must be under the age of 30, except in the case of a hardship/income exemption. However, marketplace catastrophic coverage plans will include some up to three visits with your PCP before having to meet your deductible.
Direct Primary Care (DPC)
Another potential option is DPC (Direct Primary Care). This is not insurance, but is instead a membership with your doctor for direct access to some included services
You will still need separate major medical coverage, typically a catastrophic plan or even a short-term plan.
