What would you do if your health insurance bill doubled overnight?
Is this a mistake? I can’t pay this much!
How bad would it be to just drop my plan?
Isn’t there anything cheaper out there?
These are no longer hypothetical questions for millions of people shopping for Marketplace coverage. On November 1, Marketplace Open Enrollment will begin for most of the country. Unless Congress acts to extend premium tax credits (PTCs) at current levels before December 31, average out-of-pocket premium costs will more than double nationwide next year.
People living in counties with high insurance premiums, households with older members, and people with incomes under 150% or above 400% of the Federal Poverty Level (FPL) will experience even more severe cost increases. $0 mid-level plans will no longer be available for people with incomes under 150% FPL (about $23,000 for an individual), forcing very low-income households to drop coverage if they cannot find room in shoestring budgets for a new monthly bill. Older people, whose premiums can be up to 3 times higher than younger enrollees, could see some of the most alarming increases, particularly if their incomes make them newly ineligible for PTCs. A Center on Budget and Policy Priorities analysis determined that a 60-year-old West Virginia couple making just over the 400% cap will see annual premiums for a mid-level plan increase nearly eightfold, to over $54,000 per year. For many families, this type of cost hike is simply untenable.
Unfortunately, these conditions are perfect for scammers to prey on desperate consumers.
Regulators, advocates, and lawmakers have long raised concerns about “junk insurance”. These plans are often marketed as flexible, bargain-friendly alternatives to comprehensive coverage. Sound too good to be true? It is. Most of these products are artifacts of the era before the Affordable Care Act and are not required to adhere to the same consumer protections as Marketplace plans. While some states’ laws may provide greater protections, federal law does not prevent these junk plans from denying coverage based on pre-existing conditions, excluding essential services, and even retroactively canceling coverage if you get sick.
Open Enrollment has always been a busy time for con artists, who have been known to spoof Healthcare.gov and plaster their websites with “Obamacare” references to trick unwitting consumers. Because these junk plans operate as cash cows for insurance companies by taking in more in premiums than they ever pay out, issuers offer higher commissions for selling them. This year, with legitimate coverage costs skyrocketing, people shopping for insurance may be particularly vulnerable.
What types of plans should you view skeptically?
Short-Term Limited Duration Insurance (STLDI): Traditionally, these policies were intended to bridge a short coverage gap, like a job transition. The Obama and Biden Administrations limited their length to 3 months. The first Trump Administration relaxed requirements so that STLDI plans could be renewed for up to 3 years. The current Trump Administration recently announced that it would not “prioritize enforcement” of stricter Biden-era rules that limited policy duration and required enhanced consumer notices. STLDI premiums are often lower than unsubsidized Marketplace coverage – because the policies generally provide fewer benefits, impose higher cost-sharing, and exclude people with health problems, leaving enrollees in the lurch when they need coverage the most.
Fixed Indemnity/Hospital Indemnity Coverage: These policies offer a set cash benefit after an enrollee experiences a health-related event. For example, a policy may pay $500 per day of hospitalization, leaving the policyholder liable for the remainder of the bill. Fixed indemnity coverage is a form of “excepted benefits” and thus not subject to most federal insurance requirements or consumer protections. Increasingly designed to mimic Marketplace coverage, they offer scant financial protection in the case of a costly emergency or chronic needs.
Health Care Sharing Ministries: HCSMs are not insurance, but membership organizations that pool monthly fees to cover medical expenses in accordance with a common set of religious or ethical beliefs. While HCSM fees may be lower than unsubsidized Marketplace premiums, they do not provide comprehensive coverage or even guarantee payment of claims. Similarly, Farm Bureau plans are non-insurance products sold in six states (IA, IN, KS, SD, TN, and TX) and sponsored by private entities known as Farm Bureaus. Like HCSM plans, Farm Bureau plans are exempt from state and federal rules that apply to comprehensive health insurance, meaning that they can offer limited coverage that leaves members on the hook for costly bills.
Catastrophic Health Plans: Unlike the other products profiled here, catastrophic plans are not junk insurance – they provide comprehensive coverage and are available on the Marketplace, although they accounted for fewer than 1% of 2025 Open Enrollment plan selections. However, these plans come with significant drawbacks. Although they often have lower premiums than other Marketplace plans, catastrophic health plans are only available to people under 30 and those meeting specific eligibility criteria. They include very high deductibles ($10,600 in 2026) and enrollees cannot use PTCs to lower premium costs. The Trump Administration recently expanded eligibility for catastrophic plans to people who are newly ineligible for PTCs or cost-sharing reductions – including many who will lose subsidized coverage if Congress fails to extend enhanced PTCs. An influx of newly eligible consumers could drive up premium costs for these plans, diminishing their advantage over standard metal-tier coverage while maintaining sky-high deductibles that will limit enrollees from actually accessing health care.
Before purchasing a non-comprehensive or catastrophic plan, consumers should understand their options:
- Educate yourself about plan types, key features of private insurance, and common red flags. Do you know if you are buying comprehensive coverage or if the salesperson is legitimate? If you’re not sure, check with your state Department of Insurance or consumer protection agency.
- Meet with a local Navigator or Certified Application Assister. These trained experts do not charge fees or take industry commissions. If you choose to work with an agent or broker, research how to find trustworthy assistance and ask about their commission structure – if they get paid more for promoting certain plans, that could influence their advice. Be skeptical of cold calls and texts, and never provide money or personal information to an unsolicited contact or anyone you don’t trust.
- Gather paperwork related to income, household information, recent or ongoing healthcare needs, and current insurance coverage; update your current contact information with the Marketplace and your current insurer; and spend time browsing plans to identify your options. But consider waiting a few weeks before making a final coverage decision. It is not too late for Congress to act to extend PTCs, which would reduce out-of-pocket premiums for millions of people next year. Consumers have until December 15, 2025 to purchase Marketplace coverage for January 1, 2026. In most states, you can return to the Marketplace anytime before January 15, 2026 to buy coverage that begins on February 1, 2026.
Bad actors have always used the high cost and complexity of shopping for health insurance as an opportunity to exploit consumers during Open Enrollment. This year, Republicans in Congress are making consumers even more vulnerable. As people log on to shop for coverage beginning on November 1, millions will be shocked by dramatic premium increases. Many of these households will be targeted by savvy scammers hoping to profit off of their confusion and fear. But consumers are not helpless. By arming themselves with information and reaching out to trusted sources of assistance, people shopping for health insurance coverage this fall can protect themselves from falling victim to junk insurance scams.
