What Is Marketplace Health Insurance? Staff Profile Picture
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Marketplace health insurance refers to health care plans that individuals purchase for themselves through a state or federal marketplace, as opposed to private, workplace-provided insurance. While marketplace insurance makes healthcare more accessible for Americans without steady employment or with subpar benefits, navigating the marketplace can be difficult. On this page, you will find some basics about how the health insurance marketplace works, the different types of plans offered, and when to enroll or change plans.

Overview of Marketplace Health Insurance

Prior to the Affordable Care Act (ACA), Americans had few options for healthcare outside of employer-provided insurance plans. The ACA gave Americans the ability to subscribe to private insurance plans on their own, using an insurance marketplace.

Health insurance marketplaces allow individuals to compare different insurance plans based on premiums, deductibles, out-of-pocket costs, and additional benefits such as dental. You can also search the marketplace by care provider and prescription medication to ensure that you will not have to find a new physician with a marketplace plan.

In order to qualify for the marketplace, insurance plans have to meet certain standards. They must offer a series of benefits that the ACA deems essential and cannot disqualify subscribers for pre-existing conditions. Also, they cannot raise their premiums or deny claims related to those conditions. These guidelines ensure that a marketplace insurance plan will meet most individuals’ needs.

Before the ACA, some states already provided residents with health insurance marketplaces. The ACA allows state governments to offer their own marketplace or to have residents use the federal marketplace. As of 2024, 18 states and the District of Columbia utilize their own marketplaces, while the remainder rely on the federal marketplace. State-run marketplaces have the ability to waive some of the federal marketplace’s requirements for insurers. However, those changes cannot significantly increase out-of-pocket costs or restrict access to coverage.

How Marketplace Health Insurance Works

The federal health insurance marketplace allows individuals to easily and quickly subscribe to plans in a number of ways: online, over the phone, in person, through a partnered healthcare provider, or by mail. In most cases, applying through an online form is the fastest method. You can apply for yourself as well as your spouse, children, and anyone on your federal income tax return.

To apply, you will have to provide information about your medical needs, citizenship or immigration status, employment and income, and current household health coverage. You may also optionally provide information about your race and ethnicity. If you are not a U.S. citizen, you will have to provide documentation of your immigration status.

Enrollment periods and special enrollment periods

The health insurance marketplace is only open for enrollment at certain times of the year. Open enrollment begins on November 1st and ends on January 15th. Anyone who enrolls by December 15th will have their plan go into effect on January 1st, and anyone who enrolls after will have their plan go into effect on February 1st.

However, certain circumstances may allow you to purchase marketplace insurance during a special enrollment period. Some major life events necessitate a change in your insurance plan, coverage or a reduction in your rates. Marriage, divorce, childbirth, moving, and the death of someone on your plan will all allow you to purchase or change marketplace insurance plans. If you lose existing coverage due to a loss of employment or disqualification for Medicare or CHIP, you can enroll in a marketplace plan. You can also change plans if your household income drops enough to make you eligible for savings through the Marketplace. Other income-based plans such as Medicaid and CHIP allow you to apply at any time.

Coverage Options and Essential Health Benefits

Marketplace plans vary based on premiums, deductibles, out-of-pocket costs, and additional benefits. Each plan offers different options for how costs are balanced between premium, deductible, and out-of-pocket costs, categorized as Bronze, Silver, Gold, and Platinum. Bronze plans offer a low premium and high deductible and copay, while Platinum plans offer a high premium and low deductible and copay. Bronze and Silver plans are recommended for individuals who do not anticipate receiving frequent medical care. Gold and Platinum plans are a better fit for those with medical needs requiring frequent attention. Anyone qualifying for extra savings, which reduce deductible and copay, must subscribe to a Silver plan.

The ACA requires that plans cover a series of Essential Health Benefits in order to be eligible for the Marketplace. These benefits include:

  • Emergency care

  • Hospital stays

  • Outpatient care

  • Pre- and postnatal care

  • Mental health care

  • Prescriptions

  • Rehabilitation

  • Preventative care

  • Clinical laboratory services

  • Pediatric care

  • Pediatric oral and vision care

  • Birth control

  • Breastfeeding care

Every level of every Marketplace plan provides the Essential Health Benefits. However, they will come with higher copays in Bronze and Silver plans. “Grandfathered” insurance plans predating the ACA might not offer every Essential Health Benefit; however, subscribers can change plans during an open enrollment or special enrollment period.

Subsidies and Cost Assistance

The ACA provides financial assistance to low-income individuals and households looking for health insurance, including tax credits and low-cost plans.

Medicaid and CHIP are subsidized low-cost health insurance plans. Someone whose income is 138% of the FPL or less qualifies for Medicaid and CHIP. Other circumstances, such as pregnancy and disability, may qualify you for a subsidized insurance plan. The ACA’s website recommends that anyone seeking low-cost insurance apply for Medicaid and CHIP regardless of whether or not they already meet the official benchmarks for qualification. Note that if you qualify for Medicaid, you are automatically ineligible to receive extra savings on Marketplace insurance.

If your income is too high to qualify for subsidized health insurance, you may still be able to receive tax credits for Marketplace insurance, which reduces the cost of your monthly premium. You qualify for tax credits if your income is between 100% and 400% of the federal poverty line and may still be eligible even if your income exceeds that. Changes in your income and the size of your household will affect the amount of tax credits you receive.

When applying for Marketplace insurance, you might receive a notification that you qualify for a cost-sharing reduction or “extra savings.” Extra savings reduce your deductible and out-of-pocket costs. When combined with tax credits, you can reduce your insurance costs across the board. As stated above, anyone receiving a cost-sharing reduction must enroll in a Silver Marketplace plan.

State-Specific Considerations

As of 2024, the majority of states forego a state-level marketplace and instead allow residents access to the federal Health Insurance Marketplace. However, residents of the District of Columbia or the 18 states with their own marketplaces must use that marketplace for ACA insurance. These states are:

  • California

  • Colorado

  • Connecticut

  • Idaho

  • Kentucky

  • Maine

  • Maryland

  • Massachusetts

  • Minnesota

  • Nevada

  • New Jersey

  • New Mexico

  • New York

  • Pennsylvania

  • Rhode Island

  • Vermont

  • Virginia

  • Washington

States can apply to waive certain requirements for Marketplace insurance. The federal government approves and denies these waivers on a case-by-case basis. Generally, the changes cannot make insurance significantly more expensive or difficult for state residents to access. 

Whether a state runs its own marketplace or utilizes the federal government’s, it can provide more comprehensive Essential Health Benefits (EHBs) than the federal government. For example, Texas mandates screenings for heart disease and several forms of cancer as EHBs.

Three Factors to Consider When Choosing a Marketplace Health Insurance Plan

Deductible vs. premium

If you have conditions that will require frequent medical attention, including visits to specialists, consider a high-premium, low-deductible plan, such as one categorized as Gold or Platinum. While your monthly insurance costs will be steeper, you will, in turn, owe less money for your treatments out-of-pocket. Extensive or highly specialized medical care can sometimes lead to steep bills even with insurance, but a low-deductible plan can keep those costs manageable.

A Gold or Platinum plan may also be the best option for someone with a steady stream of income but modest savings. Your monthly insurance costs will be higher, but you will be able to budget for them. A low-premium plan will cost less month-by-month, but you risk being on the hook for a bill that you can’t afford after an unexpected medical event.

In-network status of current providers

If you are switching from one healthcare plan to another, make sure that you will not lose access to any current care providers. Having to find a new primary care physician (PCP), especially when you already have a primary who is familiar with your medical needs, can be stressful and may disrupt your current care. Make sure that your PCP and any specialists that you see regularly will be covered by whichever plan you switch to. If no marketplace plans have your current providers in-network, consider a preferred provider organization (PPO).

HMO vs PPO vs EPO vs POS

An insurance provider will likely offer both health maintenance organization (HMO) and preferred provider organization (PPO) plans and potentially exclusive provider organization (EPO) and point of sale (POS) options as well. Make sure to consider which is the best fit. 

HMOs are generally less costly than PPOs but offer more limited coverage. You may be able to get coverage for appointments with specialists, but you will have to be referred to them by your primary care physician. A PPO will offer a more extensive network of covered care providers. If you require medical treatment that is more specialized than what a family doctor or internist can offer and can afford the higher premium, a PPO may be a better option for you. However, if you are on a budget and are willing to go through your PCP for a referral for any specialized care, you might consider an HMO.

POS and EPO plans each offer combinations of some benefits of HMOs and PPOs. A POS, like an HMO, only allows you to make an appointment with a specialist if you get a referral from your PCP. However, your PCP can refer you to out-of-network specialists (you will owe a higher copay for out-of-network care). An EPO lets you schedule appointments with specialists directly but tends to have more limited networks and higher deductibles compared to PPOs. Compare the costs and coverage areas of a marketplace HMO, PPO, POS, and EPO options to see which one best suits your needs.

Three Common Misconceptions about Marketplace Health Insurance

Higher tiers are NOT higher quality

Many customers believe that the Bronze, Silver, Gold, and Platinum categories designate the quality of an insurance plan and that higher tiers provide access to a wider range of benefits or preferential treatment. This is not the case. The metal tiers only designate the balance of premium and deductible costs: lower tiers have lower premiums and higher deductibles, while higher tiers have higher premiums and lower deductibles. Higher tiers are not higher quality, and the “best” plan depends on your specific financial situation. A bronze-tier PPO will offer a wider network of specialists than a platinum-tier HMO from the same provider.

Not every aspect of your treatment will necessarily be covered

During an extended course of treatment, you may assume that your insurance covers all aspects of your care. However, that treatment might consist of some forms of specialized treatment, like radiology, that your insurance may not cover. The No Surprises Act protects customers from hefty bills for surprise out-of-network care in in-network facilities. However, it is a good idea to clarify with your provider which steps of your treatment will be covered.

Marketplace insurance is not COBRA

The Consolidated Omnibus Budget Reconstruction Act of 1985, or COBRA, allows people who recently lost their jobs to elect to retain their employer-provided insurance. While COBRA is another option to find healthcare coverage outside of employment, the two systems are not the same. COBRA coverage only lasts for 18 months after the loss of your job and is often more expensive for the consumer, as they will have to cover the premium in full without assistance from their employer. Even if you are eligible for COBRA, marketplace insurance may be more affordable.

How To Find a Health Insurance Agency

If you are looking for a new health insurance plan, you may be overwhelmed by the number of providers and the variety of plans offered by each.’s health insurance agency and concierge service can help you compare insurance providers in your area based on reputation, professionalism, and coverage. We also provide lists of our top choices for different locations.

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