6 Essentials to Understand Before Choosing an ACA Plan

Choosing the right health insurance plan can feel overwhelming—especially when you’re faced with unfamiliar terms, multiple plan types, and varying costs. Whether you’re buying coverage for the first time or reevaluating your options during open enrollment, understanding how health insurance works is essential to making a confident and financially sound decision.

In this article, we’ll walk you through six important things to know before buying a health insurance plan. From how premiums and deductibles work to how to qualify for subsidies, consider this your practical guide to navigating the health insurance marketplace with clarity and confidence.

What Is Health Insurance and Why Does It Matter

Health insurance helps protect you from the high costs of medical care. Plans vary widely in terms of what they cover, how much you pay out-of-pocket, and which doctors or hospitals you can use. The Affordable Care Act (ACA) standardized many aspects of health insurance, creating a national Marketplace and financial protections for consumers.

Understanding the essential components of a plan—including costs, network types, and coverage options—can help you avoid surprises and pick a plan that aligns with your healthcare needs and budget.

1. Understand the Different Types of Health Insurance Costs

Health insurance involves more than just a monthly premium. Here’s a breakdown of the core cost components:

• Premium: The amount you pay every month to keep your plan active.
• Deductible: What you pay out-of-pocket before your insurance starts covering expenses.
• Copayment (Copay): A flat fee (e.g., $25) for specific services like doctor visits or prescriptions.
• Coinsurance: The percentage (e.g., 20%) you pay for services after meeting your deductible.
• Out-of-Pocket Maximum: The most you’ll have to pay in a year before your insurance covers 100% of costs.
• In-Network vs. Out-of-Network: Costs can vary significantly depending on whether your provider is within your insurance network.
  

Tip: Look at the total cost of care, not just the monthly premium, when comparing plans.

Understanding health insurance is easier with our Glossary, offering simple definitions of key terms you’ll likely encounter.

2. You May Qualify for Financial Help Through Subsidies

Thanks to the Affordable Care Act, some people buying coverage through the Marketplace can receive financial assistance:

• ACA Subsidies, also known as Premium Tax Credits, help reduce monthly premium payments.

To be eligible for monthly ACA plan subsidies in 2026, your income must fall within a certain range.

• For 2026 coverage, individuals with household incomes between 100% and 400% of the Federal Poverty Level (FPL) will generally qualify for ACA subsidies.

Use our Healthcare Insider ACA subsidy calculator to estimate your eligibility. If you aren’t eligible, here are some other plan options to consider.

3. ACA Plans Are Grouped by Metal Tiers and Network Types

Every ACA health plan falls into one of five “metal tiers,” each representing how costs are split between you and the insurer:

*Very limited coverage for emergencies (available under age 30 or with hardship exemption)

Plans also come with different network types, which affect how and where you get care:

• HMO (Health Maintenance Organization): Low cost, but you must use in-network providers and get referrals for specialists.
  
• PPO (Preferred Provider Organization): More flexibility and larger networks, but higher premiums.
  
• EPO (Exclusive Provider Organization): No referrals needed, but only covers in-network care.
  
• POS (Point of Service): Mix of HMO and PPO features; requires referrals but offers some out-of-network benefits.
  

Pro Tip: If keeping your current doctor is a priority, check their network status before enrolling.

4. Medication Costs Can Vary by Plan

Prescription drug coverage is included in all ACA-compliant plans, but not all plans cover medications the same way.

• Costs may depend on copays, coinsurance, and whether you’ve met your deductible.
• Each plan has a formulary—a list of covered drugs. The tier for your medication affects how much you pay.
• Prior authorization or step therapy may apply for certain drugs.
  

Checklist:

• Confirm your current prescriptions are covered.
  
• Review the plan’s drug formulary.
  
• Look for mail-order or generic options to save money.
  

5. Enrollment Windows Are Limited—Unless You Qualify for a Life Event

You can only enroll in or change your Marketplace plan during specific timeframes:

• Open Enrollment Period (OEP): This year runs from November 1 to December 15. It previously extended into January, with state-specific deadlines.
• Special Enrollment Periods (SEP): You may qualify outside of OEP if you experience a Qualifying Life Event (QLE), such as:
  • Losing other coverage
    
  • Getting married or divorced
    
  • Having a baby or adopting
    
  • Moving to a new ZIP code
    

Tip: Keep documentation of your QLE. You’ll typically have 60 days to enroll from the date of the event.

6. Individual vs. Family Plans: What’s Right for You?

You don’t have to buy a bundled family plan—sometimes it makes more sense to enroll separately.

• Individual Plans: Ideal when one family member has significantly different medical needs or preferred providers.
• Family Plans: Easier to manage under one account, and sometimes more cost-effective if members share similar needs.
  

Example: If one spouse needs frequent specialist care and the other rarely visits the doctor, buying separate plans could lead to savings.

Explore our 2026 Guide to ACA Marketplace plans for a full breakdown on coverage, benefits, costs, and more.

FAQs About Buying Health Insurance

Q: Can I switch plans if I don’t like mine?
A: Yes, but only during Open Enrollment or if you qualify for a Special Enrollment Period.

Q: What’s the best plan if I’m healthy?
A: A Bronze plan has lower premiums but higher out-of-pocket costs—ideal if you rarely need care.

Q: What if I take expensive medications?
A: Look for plans with strong formulary coverage and lower prescription copays or coinsurance.

Q: What if I just need coverage in between jobs, or I don’t qualify for Medicare yet?
A: There are options for you to consider, including short-term medical (STM) plans to help bridge the gap in coverage. You can enroll in STM plans anytime during the year without a qualifying life event.

Take Action: Steps to Find the Right Plan

Here’s how to move forward with confidence:

✅ Compare plan options at Healthcare.com
✅ Calculate your ACA subsidy eligibility using a tax credit estimator
✅ Check network status for your preferred doctors and facilities
✅ Confirm drug coverage for your prescriptions
✅ Set a reminder for Open Enrollment or gather documents for SEP qualification

 ✅ Consider your life situation to determine if a non-ACA plan is right for you

Bottom  Line

Buying a health insurance plan is one of the most important financial decisions you’ll make each year. By understanding the key components—from plan types and costs to subsidies and enrollment rules—you can choose coverage that fits your needs and protects your wallet.