What to know about the non-network plans coming to the exchanges, Modern Healthcare, by Nona Tepper, May 27, 2026
The federal government has opened the door to a potentially lucrative market for companies such as Sidecar Health and Imagine360 that market health plans with no provider networks.
The Centers for Medicare and Medicaid Services published a regulation this month permitting non-network plans on the Affordable Care Act of 2010’s state-run health insurance exchanges next year and its federal marketplaces in 2028.
But it will be up to state regulators whether these non-network plans actually find their way to the exchanges. State authorities will have to consider the benefits of lower-premium coverage and greater choice while preserving consumer protections.
Comment:
By Ana Malinow, M.D.
Under the Affordable Care Act (ACA), exchange health plans must offer essential health benefits and adhere to cost-sharing limits to be Qualified Health Plans (QHP). These rules are intended to protect beneficiaries.
However, the guardrails are about to disappear.
In February, citing a desire to “empower states to innovate and increase competition,” the Center for Medicare and Medicaid Services (CMS) proposed changes for 2027 health plans. A central feature is ending requirements that QHPs standardize cost-sharing, essential benefits, and pre-deductible coverage. This means that consumers will be faced with unstandardized, confusing plan options.
And CMS is proposing that non-network plans can attain QHP status. That is, insurers can offer plans without identified participating providers.
Without evidence, CMS states that non-network plans will “spur innovation, empower consumers to shop for lower-priced care, negotiate directly with providers, and foster competition among providers and insurers.” This is the old and debunked idea of a functioning free market in healthcare.
These non-network plans will be available in state-run health insurance exchanges in 2027 and federal exchanges in 2028.
How are non-network plans different?
Almost all traditional health insurance companies negotiate prices with a set of hospitals and doctors. These “provider networks” help insurers control costs. Plans with generous provider networks tend to be more expensive than plans with narrow networks. Thus, smaller networks usually save consumers money. However, there’s a risk that a desired provider is out of network and thus will force paying out-of-pocket. This protects the insurer but exposes the beneficiary to financial risks.
Non-network plans, in contrast, hold no contracts with providers. These plans decide unilaterally the rates they will pay for specific services, typically as a percent of Medicare rates or a cash price. The difference between what the provider charges and the insurer pays becomes the obligation of the patient. This represents huge financial risk. It is often undertaken at a time when the patient is sick and not focused on finding the best deal.
Non-network plans are part of a growing menu of (bad) options known as alternative health plans. These were developed to win over employers drowning in health benefit costs, which are on track to grow by an estimated 9% in 2026, the highest increase in a decade. One third of employers offered an alternative health plan to workers this year, and the number of employees who choose these plans is growing.
Sidecar Health, one of the leading non-network insurers, promises no networks, no prior authorizations, and transparent costs. On its website, it asks: “What if you could get employees to treat healthcare dollars like their own?” (I hate to break it to you Sidecar, but healthcare dollars are already paid fully by employees, through premiums and lower wages, but never mind.) It is health insurance that “lets members shop for care, just like everything else.” Except that, as Nobel laureate Kenneth Arrow demonstrated, health care is fundamentally unlike any other commodity, and not amenable to “shopping.”
Say you are a Sidecar Health member; how do you get medical care?
First, you search for procedures on the company’s mobile app. You see how much Sidecar Health will pay, along with provider cost and quality data. Then you pick a provider and get care. If you see charges less than the benefit amount, you keep half the savings. If you choose a provider who charges more than the benefit amount, you pay the full difference. If actual charges exceed the amount listed in the app, the plan assumes responsibility for the excess cost. No questions asked (e.g., about which procedure was done), I’m sure!
Several articles have been published (here and here) that raise serious questions about consumer protection for non-network enrollees. For example, do non-network plans protect enrollees from balance billing (charges over the insurer-paid amount) for emergent or urgent services, or for services with limited provider choice? Are very sick patients who absolutely cannot navigate to less expensive providers protected?
And what happens when a patient needs a procedure with multiple providers within a facility? Does the patient go from surgeon to anesthesiologist to physician assistant to dietician shopping for the best overall deal? My head spins with the complexity.
Insurer and hospital industry groups (not typically darlings of HJM) are on the right side of this issue. They warn that non-network plans will attract healthier enrollees, pulling them out of traditional insurance risk pools and thus raise premiums for those left behind. Plus, these plans will spur a rise in uncompensated care.
Despite public comment concerns, CMS this month approved non-network plans in ACA exchanges.
However, there’s one more opportunity to block them: state regulators must decide if non-network plans will be permitted in their exchanges.
Does anyone really believe we can empower consumers to shop around a massively complex health system with a computer app when their appendix is ready to burst?
Only a cruel, insane system dedicated to maximizing insurer profit can design non-network plans.
Or network plans. Or any kind of insurance plan. It is high time we jettison insurance companies altogether and put patients over profit. A national, single payer, improved Medicare for All is the only true empowerment.
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