Private health plans if you don’t qualify for Obamacare: what they are and how to choose

Who usually looks for a private plan

These are the most common situations in 2026 and 2027:

• You earn more than 400% of the federal poverty level. According to the IRS, starting in 2026 there is generally no help above that limit.
• Your immigration status no longer qualifies for help starting in 2027. According to HealthCare.gov, starting January 1, 2027, help is only for lawful permanent residents, Cuban or Haitian entrants and COFA migrants; other statuses can buy in the Marketplace, but without help.
• Open enrollment is over and you don’t have an event that gives you a Special Enrollment Period.
• You want everyday coverage that fits your budget while you decide.

Type 1: major medical insurance outside the Marketplace

Some insurance companies also offer individual plans that follow Obamacare rules outside the Marketplace. According to HealthCare.gov, if you buy a plan outside the Marketplace you can’t get the premium tax credit or other income-based savings, and most plans offered outside open enrollment don’t count as qualifying coverage. The insurance company can tell you whether a plan counts as minimum essential coverage. If you earn more than the help limit, it makes sense to compare these plans with full-price Marketplace plans.

There are also private major medical plans that ask health questions before approving you. If you qualify, they cover hospital stays, surgery and emergencies, usually with a deductible, coinsurance and an out-of-pocket maximum that depend on the plan. Because approval depends on your answers, not everyone qualifies. If you have a serious condition, the Marketplace is usually the way to go: according to HealthCare.gov, a Marketplace plan can’t refuse to cover you or charge you more because of a pre-existing condition.

Type 2: private limited-benefit plans

These plans cover certain services up to the amounts the plan sets, such as doctor visits, lab work or hospital days. You can buy them any month of the year.

Many cover doctor visits with a fixed copay, telemedicine at no cost, lab work and generic drugs. Depending on the plan, hospital stays are not covered or are covered for only a few days a year and a limited number of surgeries. They generally do not cover brand-name drugs, treatments such as chemotherapy, dialysis or transplants, or a pregnancy that has already started; some cover maternity only after a waiting period.

This group includes short-term plans and fixed indemnity plans. According to CMS, short-term plans are not subject to the federal prohibitions on pre-existing condition exclusions, and fixed indemnity plans pay a fixed amount per event, regardless of what the care costs, and are not a substitute for comprehensive coverage.

The 2024 federal rule limits short-term plans to 3 months initially and 4 months in total. In August 2025, the federal departments announced they would not prioritize enforcing that definition until a new rule is in place, which they intend to propose. As of November 10, 2026, that new rule had not been published. In practice, the length depends on your state’s law and the plan.

Important about limited-benefit plans: they are not major medical insurance, they do not replace Obamacare coverage, they do not follow its rules, they may exclude pre-existing conditions and they have payment limits. They generally do not count as minimum essential coverage, so they do not help you avoid the penalty in the states that charge one (California, Massachusetts, New Jersey, Rhode Island and D.C.).

Questions to ask before you sign

Ask for the answers in writing, in the plan’s official document:

• Is this major medical insurance or a limited-benefit plan?
• Does it cover my current health conditions? What does it exclude?
• Does it cover hospital stays and surgery? How many days and how many surgeries a year?
• What is the most it pays per visit, per hospital day or per year?
• Does it cover brand-name drugs or only generics?
• Will I have to answer health questions to be approved?
• How long does it last, and can it be renewed?
• Are my doctors, my hospital and my medications included?
• If I live in a state with a penalty, does it count to avoid it?

In Florida, the law requires short-term plans to include a written notice, which you sign at purchase, stating that the plan is not required to comply with certain federal rules, mainly Obamacare’s, and that you should check exclusions for pre-existing conditions. Read that notice before you sign.

How to choose for your situation

If you have health conditions that need ongoing treatment, an upcoming surgery or a planned pregnancy, major medical insurance generally protects you better, even if it costs more or you have to wait for open enrollment. If you are healthy and want doctor visits, lab work and some hospital coverage at a lower cost, a limited-benefit plan may work for you, as long as you understand its limits.

A benefits consultant compares both paths, along with the full-price Marketplace, against your budget and your health.

Frequently asked questions