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    How Does Marketplace Insurance Work? 3 Things to Know

    5 mins

    3 Things You Need to Know About the Healthcare Insurance Marketplace

    The Healthcare Insurance Marketplace originated after the Affordable Care Act became law in 2010. Sometimes referred to as the “Exchange,” the Marketplace gives U.S. citizens an easier way to find more affordable health insurance coverage for themselves, their families, or the employees at their small business. It sounds simple, but there’s a process, and that process is different for everyone. So how does Marketplace insurance work for different demographics?

    By completing only one application, consumers can learn which insurance plans are available and what those plans cost. Previous to the Marketplace, it was necessary to fill out a separate form for each insurance provider to learn the same information.

    The Marketplace encourages competition among insurers by displaying options side-by-side. Applicants can easily compare prices and benefits. Only healthcare insurance plans are available on the exchange. No other insurance products such as home or auto insurance are accessible there.

    In This Article

    • What is the Marketplace, and how does Marketplace insurance work?

    • Who is eligible to purchase insurance from the Marketplace?

    • How to find the best insurance using the Marketplace

    1. Where to Find the Marketplace

    Though it’s referred to as a single central location, the Marketplace is a gateway where you can access your state’s exchange. Locate the main federal website at healthcare.gov. You can select your state from there.

    Thirteen U.S. states also maintain a state-run Marketplace which you can access directly without going through the federal site.

    What is a Private Health Exchange?

    Private health exchanges are sometimes confused with state or federal exchanges. A private health exchange is organized by insurance brokers and carriers for individuals and employers to shop for health insurance. A private exchange may also be referred to as a health insurance comparison site. They are not part of the Affordable Care Act, and you will not find subsidized insurance plans on these sites.

    However, depending on the regulations in your state, some private exchanges also assist applicants with ACA enrollment.

    Why Would I Want Private Insurance?

    If you can afford and are satisfied with your current private insurance, you are not required to apply for a new policy through the Federal Marketplace. Large employers who need insurance for their employees must choose a private option as Federal and State Marketplaces do not provide large-group possibilities. 

    Also, in some regions, the number of providers who accept ACA insurance is limited. Patients may prefer the accessibility provided by private insurance.

    2. Who Can Use the Marketplace?

    Most Americans can use the Marketplace to find health insurance, but there are some eligibility requirements to be aware of. You must meet the following criteria:

    • Be 18-years of age or older (no maximum age limit)

    • Live in the United States

    • Be a U.S. citizen or a lawfully present U.S. national

    • Not be incarcerated (being on parole, probation, home confinement, or in jail awaiting disposition of charges does not qualify as incarceration)

    • Not be eligible for Medicare

    Not all U.S. territories have created their own insurance exchange. Residents of territories cannot apply for coverage through Federal or State Marketplaces unless they qualify for residency within a specific Marketplace service area.

    A female doctor looking at a desktop computer screen in an office.
    SDI Productions via Getty Images

    3. How Do I Use the Marketplace to Find an Insurance Plan?

    Visit the Marketplace website during open enrollment. Even if you weren’t eligible for subsidies in the past, the qualifications do change, and you may be eligible now. 

    People who have lost a job or experienced other life events that changed their insurance status may qualify for the Special Enrollment Period. You can enroll for Medicaid or the Children’s Health Insurance Program (CHIP) at any time.

    Follow the steps as directed by the website:

    • Create an account

    • Select your state

    • Fill out the household size and income information

    • Compare the healthcare plans provided for you

    Typically, you will receive at least three plans at three different price points for your consideration. In most states, they are “Bronze,” “Silver,” and “Gold,” with Bronze being the least expensive. In some cases, a “Platinum” option is also available.

    The steps are easy, but deciding which plan is best for you may be more difficult. Your current health status and health history and how much you can budget for monthly premiums will play an important role in your decision.

    Finding the Right Plan

    Each plan is required to provide at least a minimal level of coverage in what is considered the top 10 essential health benefits. That includes:

    • Ambulatory patient services

    • Emergency services

    • Hospitalization

    • Laboratory services

    • Maternity and newborn care

    • Mental health care

    • Pediatric services

    • Prescription drugs

    • Preventative care

    • Rehabilitative services

    Plans with low out-of-pocket expenses may be best for people who frequently access medical care or have health conditions requiring hospitalization. A plan like this will have the highest monthly premiums, but the lowest deductible and copays.

    The most budget-friendly plans typically have the highest deductible. Your premium will be low, but you may pay several thousand dollars out-of-pocket before you are eligible to receive benefits.  

    If you’re having trouble deciding which plan is best, it might be helpful to review your medical costs from the last year or two. Your age and general health also play a factor. 

    Typically, those who are young and healthy have fewer medical costs. In contrast, those older or who have chronic conditions might prefer to pay higher premiums to benefit from zero deductibles.  

    Don’t worry about navigating the website if you’re not technically inclined. After creating an account, users can access the support center to get help or contact customer service.   

    How Does Marketplace Insurance Work?: Answered

    The Healthcare Insurance Marketplace has helped millions of Americans find affordable insurance that wasn’t available to them before the ACA came into effect. Whether you access the Federal exchange or your state’s exchange, you will find the same insurance options with the same subsidies and premium prices.

    Almost every American citizen is eligible to use the Marketplace, but those who prefer to go through a private health insurance comparison are free to do so. There is no obligation to use the Federal Marketplace though you may incur a penalty from your state if you have no health insurance at all.

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    Brent Roberts
    Regional Sales Manager at Bennie

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