Right now people are enrolling in their health insurance plans for 2026. Many people are shocked to see premium increases near 40% on their individual ACA plans, and staggering increases for group plans as well.
Maybe you’re asking what everyone else wants to know from our team:
“Do you have PRIVATE insurance? I heard private insurance is cheaper.”
The truth is, you are likely already on a private health insurance plan.
Yes. You probably already have private insurance.
If your plan is through:
- an employer group plan
- an individual plan purchased from a broker
- a plan you got through HealthCare.gov or a state exchange
Then you already have private insurance.
Private insurance is issued by a private carrier (these include carriers like Aetna, BCBS, Cigna, UHC, Ambetter, etc.).
The public marketplace/ACA exchange is just the shopping platform. It is not the insurer.
So What is Not Private Insurance?
Public / government-funded insurance:
| Public (NOT Private) | Who It Covers |
|---|---|
| Medicare | primarily age 65+ and certain disabilities |
| Medicaid | low-income, disabled, pregnant individuals, etc. |
| CHIP | children in families that don’t qualify for Medicaid |
| VA, IHS, TRICARE, Other Government Programs | specific qualified populations |
These are all public government programs.
Everything else? That’s private insurance. In fact, the U.S. Census Bureau reported that in 2024, private health insurance coverage continued to be more prevalent than public coverage, at 66.1 percent and 35.5 percent, respectively.
So Why Is Everyone Suddenly Saying “Private” Insurance Like There Is Some Big Secret?
The insurance industry can be confusing, but often it is because marketers purposefully make it so.
When companies use the word “private,” people are assuming it means:
- outside the ACA
- cheaper
- better
- secret
- VIP
- no networks
- “cash-like” healthcare
In reality, these companies are probably selling something else entirely, which brings us to discussing these types of supplemental insurance plans.
Short-Term Medical, Fixed Indemnity, or Limited Benefit Plans
If you’ve ever heard the words “fixed indemnity” or “short-term medical,” you may wonder if these can be a (cheap) replacement for insurance. All of these are special names for technically private plans too, but they are not usually the kind of private insurance that replaces real major medical coverage.
What you need to understand, most importantly, is that these kinds of plans are not required to follow ACA consumer protections.
These kinds of plans can:
- reject you for pre-existing conditions
- deny claims
- cap benefits
- exclude essential services
What are Short-Term, Fixed Indemnity, and Limited Benefit Plans?
These plans are being marketed as “private” plans, as if that makes them better or secretly unavailable to certain populations. These plans ARE a kind of private plan, but they are not considered major medical insurance.
What is a Short-Term Medical Plan?
These are temporary health plans that typically last 30 days to 12 months (varies by state).
They were designed to fill a short gap like:
- If you’re between jobs
- If you’re waiting for employer coverage to start
- If you missed Open Enrollment and are not eligible for a Special Enrollment Period
Pros: lower premiums, quick to issue
Cons: can deny pre-existing conditions, limited coverage, can cap benefits, not ACA-compliant
Who might benefit?
Someone healthy who needs a 2–3 month bridge until real major medical starts.
What is a Fixed Indemnity Plan?
A Fixed Indemnity plan is not a medical insurance plan. These do not pay based on medical necessity, but instead they pay flat cash dollar amounts per service.
Example: $200 per ER visit, $100 per day you’re admitted to a hospital, $40 per doctor visit.
Pros: can provide cash to offset unexpected events, very cheap
Cons: does NOT replace comprehensive insurance, your bill could be $12,000 and they might only pay $1,000 total
Who might benefit?
Someone who already has a real ACA-compliant plan and wants extra cash benefits for hospitalization or to help with deductibles.
What is a Limited Benefit Plan?
Limited Benefit Plans are plans with preset dollar limits on what they’ll pay out — and those limits are often low.
Example: Plan might cap yearly benefits at $25,000. A single hospitalization can blow that out in one day.
Pros: affordable, can provide some help for basic routine services
Cons: severe risk exposure in a major event; not a substitute for major medical
Who might benefit?
If you truly cannot qualify or afford major medical coverage, a limited benefit plan could help offset every day doctor visits.
The Right Way To Think About These
These are supplements or temporary Band-Aids.
They are NOT “replacements” for real health insurance.
Real comprehensive coverage = ACA-compliant major medical.
Everything else should be treated as:
- gap coverage
- expense offset coverage
- hospital cash coverage
…not your main protection.
What Counts as Major Medical Insurance
Legitimate private major medical plans are typically:
- Employer group coverage
- Individual coverage (on or off exchange)
- ACA-compliant (covers essential health benefits)
These plans must:
- cover pre-existing conditions
- include a max out-of-pocket limit
- follow ACA rating rules
Whether you purchased that through a broker OR through healthcare.gov, it doesn’t change the type of plan. It is the same private carriers with the same rules.
The Best Question To Ask When Shopping For Insurance
Is this plan ACA – compliant?
If yes, it is major medical insurance and your family is protected. If not, it is supplemental or limited benefit insurance. These plans can sometimes make sense as add-ons to a major medical insurance plan.
When you hear someone say “I need private insurance – my premium is suddenly so high!”
What they actually mean is “I need something more affordable.”
Private insurance does not equal affordable insurance.
Private insurance does not equal better insurance.
And, if you have a carrier like BCBS, Aetna, Humana, Oscar, etc…you ALREADY have private insurance!
The term is simply being confused and misused. If you’re shopping for a replacement insurance plan, know exactly what you’re looking at so you don’t get tricked into buying a plan that leaves you unprotected. Let our team help you look at all your options today and clearly explain anything you find confusing. Get in touch by emailing health@abenefitsolutions.com.