Jesse Smedley is a Principal of Oakbridge Insurance and the founder of iHealthBrokers. He founded iHealthBrokers in 2007, and Oakbridge acquired iHealthBrokers in 2025. He has spent nearly two decades teaching people how to save money on their health insurance and navigate Medicare, and he is the author of Medicare A to Z: Your Roadmap to Medicare.
Everything is expensive right now, so it’s no surprise that so many people are searching for the cheapest health insurance they can find.
But the “cheapest plan” can end up costing you far more. It’s one of the most common mistakes we see. People shop for health insurance the way they shop for a TV: compare prices and pick the lowest monthly premium.
Then, six months later, they get sick. They need surgery or treatment, and that’s when they find out the plan doesn’t cover what they expected. Suddenly, that “cheap” plan becomes very expensive.
Look Beyond the Monthly Premium
When you shop for coverage, the monthly premium gets most of the attention. That makes sense. It’s the amount you pay every month to keep your coverage active, and it’s easy to compare against your budget. You might be choosing between a $50-a-month plan and a $300-a-month plan. But the lower premium isn’t necessarily the cheaper plan.
You also need to compare deductibles, copays, coinsurance and out-of-pocket maximums, along with provider networks and covered benefits. So instead of asking, “What’s the cheapest monthly premium?” ask, “What’s the cheapest plan for my situation?” If any of those terms are new to you, our individual health plan guide explains them.
ACA Premium Tax Credits
The biggest way to save money without lowering the quality of your plan is a premium tax credit (PTC), also called a premium subsidy. It’s a tax credit paid in advance and applied directly to your monthly premium. For example, a $300-a-month plan could drop to $150 or less with a PTC.
How Eligibility Works
Your eligibility depends on your household size and your Modified Adjusted Gross Income (MAGI). Depending on where you fall, a PTC can save you thousands of dollars a year. Some people also qualify for Cost-Sharing Reductions (CSRs), which lower deductibles and copays on Silver plans.
The Subsidy Cliff Is Back
Premium tax credits have been in the news a lot. The American Rescue Plan Act made subsidies larger and expanded who could get them, and the Inflation Reduction Act extended those enhanced credits through 2025. They also removed the “subsidy cliff,” the old rule where earning even $1 over the limit meant losing your premium tax credit entirely.
Congress did not extend the enhanced credits, so they expired at the end of 2025. For 2026, the subsidy cliff is back: households with income above 400% of the federal poverty level generally don’t qualify for a premium tax credit. That means small differences in income can cost you thousands, but there are ways to lower your MAGI. Learn more on our Affordable Care Act page.
Metal Tiers
Marketplace plans come in four metal tiers. From lowest to highest premium, they’re Bronze, Silver, Gold and Platinum.
It’s a common misconception that Bronze is “bad” and Platinum is “best.” It’s not that simple. Bronze plans have lower premiums but higher costs when you use care. Platinum plans have higher premiums but lower costs when you use care. Which one comes out ahead depends on how much care you use.
If you qualify for Cost-Sharing Reductions, pay close attention to Silver plans. With CSRs, a Silver plan can cover more of your costs than a Gold or even a Platinum plan. If you’re eligible, compare Silver plans carefully.
Health Savings Accounts (HSAs)
If you earn a little too much to qualify for a premium tax credit, or you want a bigger one, you have options. We recommend talking with an accountant or financial advisor, but one healthcare strategy to look at is a plan that works with a Health Savings Account (HSA).
HSAs used to be available only with high-deductible health plans. Starting in 2026, all Bronze and Catastrophic plans on the Marketplace are HSA-eligible as well.
HSAs offer a triple tax advantage:
- Contributions are pre-tax, which lowers your taxable income and your MAGI. That may help you qualify for a premium tax credit.
- Interest and investment earnings in the account grow tax-free.
- Withdrawals for qualified medical expenses are tax-free.
The money never expires and rolls over year after year. You can use it for qualified medical expenses like copays, over-the-counter medications and most other medical costs. In general, you can’t use it to pay your monthly premiums. Read more in HSAs: The Good, the Bad and the Ugly.
Short-Term Medical Plans
There are also options outside the Marketplace, like short-term medical plans. These are private plans that don’t follow ACA rules. They’re highly customizable and are often best for people who don’t qualify for a premium tax credit.
Because they aren’t ACA-compliant, they use medical underwriting. That can mean higher premiums, a denial, or exclusions for pre-existing conditions. On the other hand, younger, healthier people can often get much lower premiums.
Short-term plans can also offer nationwide PPO access and more flexibility. But they’re not a good fit for people with significant medical needs, families with young children, or anyone planning to become pregnant, because pregnancy usually isn’t covered.
How long you can keep a short-term plan depends on federal rules and your state. A 2024 federal rule limits new plans to four months total, but the federal government has said it plans to propose longer terms again, and state rules vary. Check what’s available where you live.
Catastrophic Plans
Catastrophic plans are bare-bones, high-deductible plans available on and off the Marketplace.
Marketplace catastrophic plans are generally for people under 30 or people who qualify for a hardship exemption. For 2026, that exemption was expanded to include people who don’t qualify for a premium tax credit or Cost-Sharing Reductions because of their income. These plans have low premiums, high deductibles, HSA eligibility, and cover three primary care visits a year before you meet your deductible.
Catastrophic plans sold off the Marketplace have different benefits and rules, so compare them carefully.
Direct Primary Care (DPC)
Direct primary care isn’t insurance. It’s a monthly membership with a doctor’s practice that makes routine care easier to get. Because it doesn’t cover major medical events or hospital stays, you’ll need to pair it with other coverage, such as a catastrophic plan.
Supplemental Protection Plans
Two common types of supplemental coverage are hospital indemnity plans and critical illness plans. Both pay you a cash benefit based on the terms of your plan.
With a critical illness plan, you receive a lump-sum payment if you’re diagnosed with a covered illness. You can use it however you need to: medical bills, groceries, your mortgage and so on. A hospital indemnity plan works the same way, except the benefit is triggered by a hospital stay. Learn more in Hospital Indemnity Insurance: Is It Right for You?
Alternative Health Coverage Models
There are also newer coverage models, such as plans where members pay providers directly and then get reimbursed. These models depend less on provider networks and have some similarities to health sharing ministries.
They can offer lower premiums, more flexibility and more choice of providers. But in our view, the risk of balance billing outweighs those advantages. For example, say your plan allows $6,500 for a procedure, but the hospital charges $10,000. You would owe the $3,500 difference.
That can get expensive fast. Without negotiated provider contracts, it’s hard to price shop in an emergency, and people who use a lot of care face the most risk. That’s why we generally don’t recommend these plans.
Get Help Finding the Right Plan
The cheapest premium isn’t always the cheapest plan. Our licensed brokers can compare Marketplace and off-Marketplace options for your situation at no cost to you. Get your free quotes or call us at (866) 260-9829.
