Health Insurance Marketplace Explained: Everything You Need to Know About the Health Insurance Exchange

Health Insurance Marketplace Explained: Everything You Need to Know About the Health Insurance Exchange

Health insurance is a safety net that takes care of your financial well-being in case of a medical emergency. A health insurance policy covers medical expenses you might incur due to illness, accidents, or other injuries.

Typically, it’s a contract between you and a health insurance company. This means the insurance carrier will bear some or all of the medical expenses you incur against a certain fee or premium.

If you are not under any insurance cover in America, the Health Insurance Marketplace is the best place to get health insurance for you and your loved ones.

In this article, we have made a detailed outline of everything you need to know about Health Insurance Marketplace to give you actionable guidance to help you get started with an affordable plan.

What is the Health Insurance Marketplace

A health insurance marketplace, also known as a health insurance exchange, is a platform where consumers (including individuals, families, and small businesses) in the U.S. can compare coverage details and costs across a wide range of qualified health plans.

It is a one-stop-shop for health coverage that allows you to compare plans based on price, benefits, quality, and other features important to you before you make a choice. Simply put, the Health Insurance Marketplace is a place where you can:

  • Compare health insurance plans for coverage and affordability
  • Find answers to questions pertaining to health care insurance
  • If you are eligible get subsidies such as low-cost coverage through Medicaid or Children’s Health Insurance Program (CHIP) and other savings
  • Enroll (through online and in-person help) in a health insurance coverage that fits your budget and needs

Understanding the Health Insurance Marketplace

The Health Insurance Marketplace was established by the Affordable Care Act (ACA), a health care reform signed into law by former President Barack Obama in 2010. The main aim of ACA was to extend affordable health insurance coverage to millions of uninsured Americans.

Also, ACA sought to provide coverage explanations in easy-to-understand, standardised formats, along with uniform definitions of health insurance terminology. As such, all plans on the offing on the health insurance marketplace must comply with ACA’s requirements, meeting standards established and enforced by both the federal and state governments.

ACA requires each state to create an exchange —or Marketplace—but the implementation varies across different states. As of 2022, there are three federally supported exchanges, six state-partnership exchanges, 18 state-based, and 24 federally facilitated exchanges.

In addition, the Marketplace features an enrollment platform known as SHOP (Small Businesses Health Options Program). It is a tool that enables small businesses to compare insurance plans and enroll in coverage for their employees.

Who is Eligible to Use the Health Insurance Marketplace?

Virtually all Americans are eligible to use the marketplace exchange except persons enrolled in Medicare coverage or serving prison sentences. You are eligible to shop and buy for insurance plans in the Marketplace if:

  • You live in the United States
  • You are a U.S. citizen or lawfully present
  • You are not in prison

Practically speaking, the health insurance marketplace was designed to offer coverage to families or individuals who were either already paying for their own medical insurance or uninsured altogether. This includes self-employed persons, employees of small businesses that do not offer health benefits or people who retired before the age of 65 and thus are not yet covered under Medicare.

If you get your health insurance coverage from your employer, you may not need to use the health insurance exchange but you can decide to decline your employer’s coverage and buy a plan in the exchange instead. However, this will disqualify you for financial aid unless you prove that your employer’s unaffordable or does not provide minimum essential value.

In addition, if you are a non-elderly American (below 65 years), you can use the exchange to enrol in Medicaid or at least determine your eligibility for Medicaid.

Some states require that you complete the enrollment process through the insurance marketplace. In other states, though, the Marketplace sends your information to the state Medicaid agency to confirm your eligibility or finalize enrollment.

OEP: Timeline for Enrolling in Healthcare Insurance

There is an open enrollment period (OEP) each fall. This is a window during which you can enroll in health insurance or make changes to your coverage through the Marketplace. In most states, the open enrollment period is from 1st November to 15th December, with coverage effective 1st January. All in all, most state-run marketplaces have extended enrollment periods, with some extending into January.

You can only sign up or switch to a different plan in the Marketplace during the OEP window. Outside OEP, you may be eligible for special enrollment if you have a qualifying event. These qualifying events include:

  • A permanent move to a different area
  • Involuntary loss of coverage
  • A change in immigration status
  • A change in subsidy eligibility
  • A growing family due to adoption or birth
  • A change in household income that makes you eligible for a subsidy
  • Non-calendar-year health plan renewal
  • Benefits or affordability issues with your employer-sponsored health plans

Essential Health Benefits

ACA-compliant plans in the health insurance marketplace come along with a list of ten basic requirements, otherwise known as essential health benefits (EHBs). ACA requires that all individual and small-group health insurance plans in the exchange must cover the following EHBs:

  • Emergency services
  • Ambulatory services
  • Laboratory services
  • Hospitalization
  • Pregnancy, maternity, and newborn care
  • Pediatric services, including dental and vision for children
  • Prescription medication
  • Rehabilitative and habilitative services
  • “Well” services and preventive services (including vaccinations), and chronic disease management
  • Mental health and substance use disorder services

Free Services

While the EHBs list alone is impressive, it is even more impressive when you consider the preventive healthcare services ACA-compliant plans in the marketplace cover for free:

  • Blood pressure and route cholesterol checks
  • Birth control
  • Breastfeeding supplies
  • Screening for gestational diabetes
  • Birth control
  • Rh incompatibility for women
  • Pap smears and HPV tests
  • Tobacco cessation
  • Hepatitis, Gonorrhea, and HIV screenings
  • Routine vaccinations
  • Colonoscopies

Types of Qualified Health Plans (QHPs) on the Marketplace

A qualified health plan (QHP is a health insurance coverage that meets the Affordable Care Act requirements. The main ACA requirements for a QHP include: covering the ACA’s ten essential health benefits (EHBs), adhering to cost-sharing limits, covering pre-existing conditions, prohibiting annual and lifetime benefit limits, and being licensed in the state where coverage is provided.

Qualified Health plans are certified by the health insurance marketplace and the Department of Insurance and Financial Services (DIFS). The QHP certification process takes place every year ahead of the annual marketplace open enrollment period.

Usually, QHPs are divided into five metal levels. Each metal represents how the cost of healthcare services is split between you and the insurance carrier. Insurance providers selling plans on the health insurance marketplace are not necessarily required to offer plans in each metal or in all counties.

The five metal levels include:

i). Platinum level– these plans have to cover at least 90% of the total health care costs while you are financially responsible for the remaining 10%

ii). Gold level– in this plan, the insurer will cover up to 80% of the expected health care expenses, and you take care of the remaining 20%

iii). Silver level– these plans require the health insurance provider covers 70% of the expected healthcare costs while you are responsible for the remaining 30%

iv). Bronze level– here, the plan takes care of at least 60% of the expected health care cost while you are financially responsible for the remaining 40%

v). Expanded Bronze level– these plans cover between 56 and 62% of the expected healthcare costs

Cutting Cost on the Health Insurance Marketplace

When you purchase a health insurance plan on the health insurance marketplace, you may be eligible for a cost-sharing reduction or the advanced premium tax program. Both of these ACA programs aim to reduce your overall healthcare insurance costs.

1. Cost-Sharing Reduction

This is a discount on your monthly premiums, and it is only available on Silver plans. A cost-sharing reduction helps cut your out-of-pocket costs for:

  • Copayments- a fixed amount that you pay for your health plan
  • Coinsurance- your share of the healthcare costs of the covered healthcare plan
  • Out-of-pocket maximum- the maximum you will pay in a year for health care expenses
  • Deductibles- the amount you owe for covered healthcare services before health insurance kicks in

2. Advanced Premium Tax

The advanced premium tax credit is a federal tax credit that lowers the amount you pay for monthly health insurance premiums when you buy health insurance on the Marketplace. If you are eligible, the government calculates your premium tax credit in advance and sends it to your health insurance company.

This enables you to pay less on monthly insurance premiums by the amount of the tax credit you qualify.

Eligibility for these cost-lowering programs depends on your income and your family size. Consider talking to a qualified healthcare insurance agent to help you determine your eligibility and find quality and affordable healthcare plans.

Do I have to Buy Health Insurance in the Healthcare Insurance Marketplace?

No. You can still choose to buy your healthcare insurance coverage off-exchange instead of purchasing a plan through the Marketplace. However, there is an exception of D.C. (District of Columbia), where individuals and small-groups can only buy coverage through the Marketplace.

The downside of not buying coverage through the Marketplace is that you cannot obtain benefits such as cost-sharing reductions or advanced premium tax credits even if you are eligible for them.

Get a Foolproof Health Insurance Cover at the Lowest Cost

Consumers feel that automation has killed the sense of human touch in the coverage acquisition process. Even worse, increasing complexities have made understanding and buying health insurance policies a nightmare.

Not so at the Healthcare Solutions Team; we take pride in being kind, compassionate, and professional in every step of the process. Our top-of-the-class agents are thought leaders who rely on world-class knowledge to ensure you are covered with custom, clear policies that exceed your needs.

For more information on Health Insurance Marketplaces, or inquiries on how we can help, feel to Contact Us now, and we will be more than willing to assist.