The Affordable Care Act encourages you to have comprehensive health insurance, but you don’t have to buy it from a government-run Obamacare marketplace. Private “off-Marketplace” health insurance is also available.
Marketplace plans and non-Marketplace plans are generally mirror images of each other, though off-Marketplace plans don’t provide premium subsidies and enrollees have to pay rate increases themselves.
This means that people who don’t receive Obamacare tax credits will generally pay less by picking lower-cost off-Marketplace health insurance on a private website like HealthCare.com.
So, what is Marketplace insurance? Why would people buy non-Marketplace health insurance as opposed to a plan available on a state-run exchange? We’ve broken down the main ways on- and off-exchange health plans vary — or don’t.
Are Off-Exchange Plans OK? Marketplace and Non-Marketplace Health Insurance Are the Same Where It Counts
A big question for many people is whether benefits vary between Marketplace health insurance and non-Marketplace health insurance. At their core, they do not.
No matter where they are sold, health insurance plans must adhere to certain Affordable Care Act standards.
At the very least, all on-exchange and off-exchange health plans must include the 10 essential health benefits (EHBs), which are:
- Outpatient care
- Emergency services
- Maternity and newborn care
- Mental health and substance use disorder services
- Prescription drugs
- Rehabilitative and habilitative services and devices
- Laboratory services
- Preventive and wellness services, including chronic disease management
- Expanded pediatric services, including dental and vision care
Before the annual Open Enrollment Period, each state will select a benchmark health insurance plan upon which all other health plans in the state were modeled. Plans must offer the same basic benefits, but are not prohibited from including additional benefits.
On-Exchange and Off-Exchange: Key Differences
Both on- and off-exchange health insurance plans must be categorized by metal level — bronze, silver, gold, platinum and catastrophic (only available to those under 30, or those over 30 who qualify for a hardship/affordability exemption). As explained above, all of these plans have the same minimum coverage.
The three main ways that similar on and off-exchange plans vary are
- name and design,
- provider network, and
- participating insurance companies.
1. Name and Design
The specific health insurance plan designs offered on and off the state-based and federally facilitated exchanges may vary. This means the same carrier may offer a bronze plan under one name on private websites, and a similar bronze plan with a different name and fewer benefits on a state’s Obamacare exchange. One may be a PPO and the other may be an HMO. One may offer additional benefits that the other doesn’t.
- Example: Company A may offer a plan it calls the Cost-Effective Bronze HMO on a state’s exchange. Company A may not offer that same plan in the private marketplace. Company A only offers the Budget-Friendly Bronze PPO in the private marketplace. Both plans include the 10 essential health benefits, but their network structures (HMO vs PPO) and other benefits differ.
Additionally, carriers are not required to offer all metal plans. That means Company A may offer only a bronze plan through your state’s exchange, while offering a range of metal levels on health insurance websites.
Furthermore, plan availability may vary by region. Company A’s bronze plan may only be available in one county and may also be the only bronze option in that region. Meanwhile, residents of a large city may be able to choose from multiple bronze plans.
The easiest way to see your widest range of options is to call an agent or check your ZIP code online.
2. Provider Networks
Another important difference that may occur between plans on and off the government marketplaces is their network variations. One way health insurance carriers lower their Obamacare exchange premium rates is by only covering small, or “narrow”, networks of doctors.
- Example: The provider network associated with Company B’s exchange-based Cost-Effective Bronze HMO may include a much smaller selection of healthcare providers and hospitals than the network associated with Company B’s private marketplace Budget-Friendly Bronze Advantage HMO.
Keep this in mind and carefully compare plan networks from the same company. You’ll want to ensure the in-network options fit your personal preferences and are conveniently located.
3. Participating Carriers
Carrier options also vary on and off government exchanges. Some health insurance companies may be licensed to sell plans in your state, but only on a private website. Other carriers may only sell exchange-based health insurance (which can still be listed on private websites, for the same price). And a few companies may offer health insurance plans on an exchange as well as in the private marketplace.
Non-Marketplace and Marketplace Health Insurance: Costs
If the exact same health insurance plan is sold in multiple places, that plan must be offered at the same price everywhere. Otherwise, different plans will have different rates.
- Example: Company C offers the Silver Primo PPO+ plan in the private marketplace and the Silver Primo Standard PPO on a government exchange, the rates may vary. If Company C offers its Silver Primo+ PPO plan on and off a government exchange, you can expect these identical plans to have identical rates.
Under the Affordable Care Act, rates on all plans cannot vary based on your health history or gender. They can vary, though, based on your age, location, and tobacco use.
Little in-depth and equal comparison of on- and off-exchange health insurance premium rates has been made. An analysis of 10 states in the month before the Obamacare exchanges opened found that 9 of the insurers selling only off-exchange health plans averaged 23 percent lower premiums than other plans in their state.
Getting ACA Discounts: If you qualify for an income-based premium tax credit or cost-sharing subsidy, you can get that discount by signing up on any website. However, only health insurance plans that are listed on government exchanges are eligible for financial assistance. Plans that are exclusively off-Marketplace do not qualify for subsidy assistance at this time.