When the Affordable Care Act’s first Obamacare open-enrollment period commenced Oct. 1, 2013, consumers were introduced to state-based and federally facilitated health insurance exchanges known as the Health Insurance Marketplace.
Consumers in all 50 states and the District of Columbia may purchase individual major medical plans through the Health Insurance Marketplace; however, it is not the only place to buy them. Major medical health insurance is also available outside the government-run exchanges in the private marketplace.
Before you shop for your next health plan, be aware of similarities and differences between the on- and off-exchange shopping experiences.
What is the difference between exchange-based health plans and those sold in the private marketplace?
First, let’s look at how they are the same.
All major medical plans sold through Obamacare’s Health Insurance Marketplace and in the private marketplace qualify as minimum essential coverage that fulfills the ACA’s shared responsibility provision.
No matter where they are sold, these plans must also include all of the Affordable Care Act’s consumer protections and benefits, such as1:
- Items and services in the 10 essential health benefits categories
- No-cost preventive care – certain preventive care screenings, tests and services at no additional cost beyond your premium
- Coverage for children up to age 26
- Guarantee-issue coverage – you cannot be denied or charged more based on your health history or gender
Furthermore, your rate can only be determined by the following five factors2:
- Age (older people can only be charged up to three times more than younger people)
- Geographic location
- Tobacco use
- Individual vs. family enrollment
- Plan category – bronze, silver, gold, platinum, catastrophic
Now, let’s look at the differences between plans sold through the Health Insurance Marketplace and those sold in the private marketplace.
It comes down to two key factors:
The major medical insurance you buy from the Health Insurance Marketplace:
- Qualifies for income-based Obamacare subsidies including premium tax credits and cost-sharing reductions
- May have a narrower provider network—narrow networks are a way insurance companies cut costs on exchange-based plans3
The major medical insurance you buy in the private marketplace:
- Does not qualify for Obamacare subsidies
- Tends to have broader provider networks4
It is also worth noting that not all insurance companies sell through the Health Insurance Exchange, and those that do may offer different plan types on and away from it. You can expand your selection by shopping both the private marketplace and Health Insurance Marketplace.
Okay, so where should I buy my health plan?
The answer will vary by household.
You can see that one marketplace is not necessarily better than the other. Personal circumstances and preferences will play a role in determining where to buy your next health insurance plan.
To determine which route is best for you:
- Assess your financial situation and healthcare needs
- Estimate your subsidy eligibility using a tool such as the Health eDeals Health Care Reform Calculator
- With your subsidy eligibility in mind, comparison shop on and away from the Health Insurance Marketplace, and pay attention to details such as:
- Monthly premium
- Deductible, coinsurance and copayment amounts
- Prescription drug formularies
- Provider networks
If you decide to buy major medical insurance outside the Health Insurance Marketplace, you can purchase it:
- Through a health insurance agent or broker
- From an insurance company
- On a website such as www.healthedeals.com
Who can help me?
A health insurance producer (i.e., agent or broker) can familiarize you with your options on and away from the Health Insurance Marketplace, help you assess which plans are a strong match, and discuss with you supplemental plans to round out your coverage.
If you shop the Health Insurance Marketplace, you have access to exchange-based helpers, which include agents and brokers, in-person assisters and call center personnel.
Remember your dental plan!
Whether you buy your major medical plan on or away from the Health Insurance Marketplace, you should consider buying dental insurance and can buy a plan in the private marketplace—most health insurance exchanges do not offer dental insurance plans for adults.
Get a quick dental insurance quote at www.healthedeals.com. While you are there, consider other supplemental coverage such as telemedicine, critical illness and gap plans. These products complement your major medical plan and can help reduce your out-of-pocket healthcare spending.
Have questions? Call the number at the top of your screen to speak with a producer.