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What’s the Health Insurance Marketplace?

A health insurance marketplace, otherwise known as a health insurance exchange, is a comparison-shopping area for health insurance. Private health insurance companies list their health plans with the marketplace and individual comparison shop on the exchange from among the available health plan schedules.

The phrase health insurance exchange most usually refers to public health insurance exchanges developed by the government as a result of the Affordable Care Act. However, private health insurance exchanges do exist. Private health insurance exchanges are usually intended to serve several large employers, so most individuals will only encounter them when signing up for job-based health insurance.

Public health insurance marketplace is used to buy individual and family health insurance plans that are compliant with the ACA (“individual and family” or “individual market” means health insurance that persons purchase on their own, as opposed to coverage that’s obtained through an employer or via a government-run program such as Medicare or Medicaid). And these exchanges are the only place persons can acquire premium subsidies and cost-sharing reductions, which serve to reduce premiums and out-of-pocket costs for millions of eligible enrollees.

Individuals who qualify for Medicaid based on their income can enroll in Medicaid through the exchange in their state (either directly, or the exchange will direct them to the state Medicaid office once a preliminary eligibility determination indicates that they’re likely qualified for Medicaid).

In most states, small group plans for small businesses are accessible through the exchanges as well. But that segment of their market has attracted a small number of enrollees, and the federal government announced in May 2017 that they would no longer operate the small business enrollment system (used in 33 states as of 2017) after the end of 2017. Instead, small businesses in those states enroll directly through insurance companies or with the assistance of a broker, and pay premiums to the insurers instead of making premium payments. But SHOP-certified plans, through agents, brokers, and insurers, are only available in limited areas in some of those states; most states that use HealthCare.go don’t have any SHOP-certified plans available at all anymore, because of low interest in that program.

But this article focuses on the Affordable Care Act’s public health insurance exchanges and the individual market health insurance plans that make up the bulk of the exchanges’ private plan enrollments. It’s “exchanges,” plural since every state has an exchange. And although the word marketplace invokes the mental image of a physical place where buyers wander from stall to stall checking out the vendors’ wares, most individuals access health insurance exchanges through the internet. The largest health insurance exchange, HealthCare.gov, is run by the federal government, serving health insurance buyers in 38 states. The other 12 states and the District of Columbia each have their exchange markets. A few of the states that currently utilize HealthCare.gov—as well as Pennsylvania, Maine, Virginia, and New Mexico—are in various stages of transitioning to having their own fully state-run exchanges in the coming years, so the number of states depending on the federally-run exchange platform is expected to decline over time.

Finding Your Health Insurance Marketplace

Your state may run its health insurance marketplace like the one run by California, Covered California. Your state may have chosen not to create a health insurance exchange, or to create an exchange but use the federal enrollment platform. In that case, residents employ the federal government’s exchange at HealthCare.gov.

In each state, enrollment in the exchange (and outside the exchange) is limited to an annual open enrollment window (November 1 to December 15 in most states) and special enrollment periods caused by qualifying events.

States that run their own exchange enrollment platforms can create special enrollment periods at their pleasure. Due to the COVID-19 pandemic, 12 of the 13 fully state-run exchanges opened special enrollment windows for uninsured individuals (in DC, the particular enrollment period is due to the District’s mandate, as opposed to the COVID-19 pandemic, but it still allows uninsured people to sign up for coverage).

The federal government has declined to provide a similar enrollment window for uninsured residents in states that use HealthCare.gov. But in each state, individuals who lose their employer-sponsored health coverage are qualified for a special enrollment period triggered by the loss of coverage.

Resources and References:

• Special Enrollment Period Due to Loss of Coverage
• The Affordable Care Act
• Medicaid Eligibility