Why Most Americans Haven't Heard About Free-Market Plans

If you are self-employed, a freelancer, or a small business owner, you’ve likely felt the “sticker shock” of the health insurance marketplace. You see premiums that look like mortgage payments and deductibles so high they feel like “un-insurance.”

But there is a strange paradox in the American healthcare system: there are private, free-market plans—like Short-Term Medical (STM) and Fixed Indemnity—that often cost 50% to 70% less than traditional plans. Yet, almost no one is talking about them.

If these plans are “objectively better” for many healthy, self-employed people, why haven’t you heard of them? The answer isn’t a single conspiracy; it’s a perfect storm of political pressure, corporate profit motives, and a “broken” marketing machine.

1. The “Subsidized” Revenue Machine

The biggest reason major insurance companies don’t shout about free-market plans is simple: the government is their biggest customer.

Under the Affordable Care Act (ACA), the federal government pays billions of dollars in subsidies directly to insurance companies to lower premiums for low-income individuals. For a major carrier, it is much easier and more profitable to collect a “guaranteed” check from the IRS than it is to convince a self-employed professional to buy a private plan with their own hard-earned money.

2. The Fear of “Junk Insurance” Headlines

In Washington, D.C., free-market plans are often derisively labeled as “junk insurance.” This political labeling creates a massive reputational risk for household-name insurance brands.

Large carriers live in fear of a “heart attack headline”—a story about a customer who bought a low-cost plan, had a major medical event, and discovered the plan didn’t cover 100% of the bill. To avoid the PR nightmare and potential lawsuits, many big-name insurers simply choose not to market these products to the general public, even if they are a perfect fit for a healthy person who just needs catastrophic protection.

3. Regulatory “Whiplash”

Imagine trying to run a business where the rules of your product change every time a new President is elected. That is the reality for free-market health plans.

One administration might allow these plans to last for three years. The next administration might try to limit them to just four months.

This “regulatory whiplash” makes it expensive for large companies to build and sell these products. They would rather stick to the heavily regulated (but stable) ACA market than deal with the constant legal shifting of free-market alternatives.

4. The “Underwriting” Barrier

Unlike “Obamacare” plans, which must accept everyone regardless of health status, free-market plans use medical underwriting. This means the insurance company asks you health questions before they say yes.

For the consumer, this is why the plans are so much cheaper—you aren’t paying for the claims of people who are already sick. For the insurance company, this requires extra work. It’s “easier” for a company to process a thousand subsidized applications that require no questions asked than to individually review the health of a thousand self-employed entrepreneurs.

How the Plans Compare

ACA Marketplace plans often cost $500–$1,200+ per month, are paid through a combination of your money and government subsidies, require no health questions, and are only available during Open Enrollment.

Free-market plans (STM and Indemnity) often cost $150–$400 per month, are paid entirely by you, reward healthy lifestyles through underwriting, and are available to join anytime—365 days a year.

The Bottom Line

You haven’t heard about these plans because they disrupt the status quo. They don’t rely on government checks, they require a bit more “homework” from the consumer, and they don’t fit into the political narrative of “one-size-fits-all” healthcare.

At Coverbrook, we believe you deserve to see the whole menu—not just the options the government and big corporations find most convenient to show you.