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What Are Health Insurance Exchanges?

Understanding your options for affordable coverage

Key Takeaways

  • Health insurance exchanges or Marketplaces can help you find coverage at an affordable rate.

  • Every state has exchanges, though they are operated differently depending on your location.

  • There are four main plan options: bronze, silver, gold and platinum. Each plan varies based on premiumA premium is a fee you pay to your insurance company for a health plan coverage. This is usually a monthly cost., deductibleA deductible is the amount you pay out of pocket before your insurance company covers its portion of your medical bills. For example: If your deductible is $1,000, your insurance company will not cover any costs until you pay the first $1,000 yourself. and copaymentA copayment (copay) is the fixed amount you pay directly to your provider for medical services or prescription drugs covered in your plan. For example: If your plan includes a copayment of $20 for office visits, you'll pay $20 to your doctor whenever you have an appointment. costs. But they all have the same quality care, regardless of cost.

What Is a Health Insurance Exchange?

Health insurance exchanges are online Marketplaces that were set up by the Affordable Care Act (ACA) for consumers to buy affordable health insurance in an organized and simplified way. You can view and compare multiple certified health plans, and you’re given educational tools to help you understand your options. Marketplaces can also tell you whether you’re eligible for Medicaid or tax subsidies based on your income. You can access most Marketplaces via websites or call centers.

Does My State Have Exchanges?

Every state has exchanges, [1] but the way they are run vary depending on your location. As of 2020, there are 32 states with federal exchange health insurance plans. Twelve states and the District of Columbia operate their own marketplaces, [2]  while six are partnership exchanges. Those are considered to be run by states, but rely on the federal platform to help with eligibility and enrollment.

Who's Eligible for Insurance on the Marketplace?

Anyone who lives in the United States and is a U.S. citizen can apply for insurance through the Marketplace, though you can’t be incarcerated. Additionally, you can’t use the exchanges to buy a health or dental plan if you have a Medicare policy.

You can explore your options with the Marketplace if you don’t receive job-based coverage. The exchanges could also be a good alternative to COBRA if you lose your job, regardless of whether it’s voluntary or involuntary. Exchange policies are often more affordable and have customizable coverage to fit your needs.

What's the Cost?

The cost of Marketplace insurance varies based on your coverage needs and the following factors:

  • Income
  • Where you live
  • Age
  • Whether you smoke or not
  • Family size and more

What's Covered?

All Marketplace plans must cover the ten essential benefits, preventive care and pre-existing conditions. However policies can vary based on the amount of coverage you select. Preventive care generally includes wellness plans, screening services to detect illnesses early, counseling, shots, and more. Additionally, Marketplaces can’t deny coverage or increase rates for pre-existing conditions such as cancer or diabetes.

Full list of the 10 Essential Benefits:

  • Outpatient services
  • Emergency services
  • Hospitalization
  • Prescription drugs
  • Maternity and newborn care
  • Laboratory services
  • Mental health and addiction services
  • Rehabilitative and habilitative services
  • Preventive and wellness services
  • Pediatric services including dental, vision, vaccinations and immunizations

How Does It Work?

In most cases, you’ll receive a list of plans available in your area after filling out an application with your household information. You can also submit your income information to find out whether you’re eligible for federal financial assistance. The list of policies will show the cost of your monthly premiums and out-of-pocket costs you’ll be expected to pay in addition to deductibles and copayments. Coverage begins after you pay your first premium.

You can apply only during your state’s Open Enrollment Period, unless you’ve had a life event (like losing health insurance, getting married or having a baby) that qualifies for a special enrollment period.

What Are My Plan Options?

Marketplace policies are broken up into four main categories: bronze, silver, gold and platinum. [3] They vary based on the costs of premiums, deductibles and copayments. It’s important to note the different levels don’t represent quality of care. [4]

Platinum

  • Insurance Pays: 90%
  • You Pay: 10%
  • Premium: Highest
  • Deductibles: Low
  • Cost of Care: Lowest

Gold

  • Insurance Pays: 80%
  • You Pay: 20%
  • Premium: High
  • Deductibles: Low
  • Cost of Care: Low

Silver

  • Insurance Pays: 70%
  • You Pay: 30%
  • Premium: Moderate
  • Deductibles: Lower than Bronze
  • Cost of Care: Moderate

Bronze

  • Insurance Pays: 60%
  • You Pay: 40%
  • Premium: Lowest
  • Deductibles: High
  • Cost of Care: Highest

Catastrophic plans [5] are also available to people under 30 or with hardship/affordability exemption that keeps you from being able to get insurance coverage. These policies tend to have low monthly premiums with very high deductibles. Most routine medical expenses you’ll have to pay for yourself, but you’ll be protected from getting seriously sick or injured.

Do you still have questions about the Marketplace? Connect with a licensed agent to find a plan that’s best for you.

FAQs

Do I have to be enrolled in a health insurance plan?

Unlike past years, if you choose not to buy health insurance for the coming year, you may not have to pay a penalty. Federal penalties no longer exist but some states do still require residents to have insurance or pay a fine.

How should I compare premiums and deductibles?

A plan that has a low monthly premium, but a higher deductible and higher copays may cost you more if you have to see a specialist or visit the emergency room. On top of the premium and deductible, you should consider copays, co-insurance, and out-of-pocket maximums when comparing plans.

What's Next?