Get More Benefits &
Save More! Call For
More Info Today

Private Health Insurance Vs. The Marketplace

A health insurance exchange, also known as a marketplace, is where you can purchase a health insurance plan for individuals and families. Exchanges were set up by the Affordable Care Act (ACA), also referred to as Obamacare. They make it easier to see what health insurance plans are available in an area, compare them, and make a purchase.

The most common health insurance exchange is healthcare.gov, and it’s run by the federal government. United States residents in 38 states enroll in health insurance plans through the federal exchange. The other 13 states have their marketplaces. You can find your state’s marketplace through healthcare.gov.

Private health insurance exchanges are similar to healthcare.gov, but they can also show you off-exchange plans. These policies have to meet the same requirements as on-exchange plans, except that they do not need to provide plans across all four metal tiers. That means a health insurance company can select to offer only one plan and tailor it to certain types of consumers.

On either exchange type, you can verify crucial information such as what medications are covered, which specialists are in the network, and the costs of monthly premiums, copays, and the deductible for every health insurance plan.

State Health Insurance Marketplaces

In 2020, 12 states and the District of Columbia have their marketplaces for people and families: California, Nevada, New York, Rhode Island, Vermont, Colorado, Connecticut, District of Columbia, Idaho, Maryland, Massachusetts, Minnesota, and Washington.

State marketplaces typically work the same way as the federal exchange. The big variance is the state, not the federal government, is in charge of all aspects of the health insurance exchange.

This also means a state has more control over the health insurance plans available on its marketplace. States with their own marketplaces can place extra rules on insurance plans, requiring them to cover more benefits and services. States can also set different quality and pricing guidelines for health insurance plans.

States may also set differing qualifying events for Special Enrollment Periods. For instance, New York permits women to qualify for a Special Enrollment Period when they become pregnant, while the federal government only counts the birth of a child as a qualifying life event.

Private Health Insurance Marketplaces

In addition to the government marketplaces, there are also private health insurance marketplaces.

Private health insurance exchanges can still show you all the policies available on your federal or state marketplace. If you are eligible for a premium subsidy, you can still utilize it if you buy through a private health insurance exchange, as long as you get a plan that is also available on healthcare.gov or your state exchange.

A major difference in private exchanges is that they can also show you “off-exchange” health insurance policies. Off-exchange insurance plans are not accessible through any federal or state marketplace. Nevertheless, off-exchange plans still adhere to the same federal rules as on-exchange plans, like covering the 10 essential health benefits. All health insurance plans, whether on-exchange or off-exchange, can only base your premium on four factors: whether it is an individual or family plan, the location you live in, your age, and whether you consume tobacco.

Private health insurance exchanges can also offer additional shopping support for consumers. At Health Insurance Plans, for instance, we can make specific plan recommendations based on your personal preferences. We will also have a professional help you with the application, check on your eligibility for a premium subsidy, and answer any questions you have regarding your health insurance plan.

Off-Exchange Plans Versus On-Exchange Plans

Off-exchange health insurance plans are typically different because they allow insurers to structure their health insurance plans in different ways and potentially save the customer money. For instance, government exchanges require all participating insurers to offer a plan in each of the four metal tiers. Nevertheless, an insurer may only want to provide a single plan. They can do that with off-exchange health insurance policies.

Resources and References:

• The 10 Essential Health Benefits
• Off-Exchange Health Insurance Policies