What Is the Health Insurance Marketplace?

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The Health Insurance Marketplace is a centralized exchange where people can compare and buy health insurance. Operated by the federal government, the Marketplace offers health plans in four different tiers that feature the same basic health services but have different cost-sharing structures, and may have additional benefits such as adult dental or vision care. It enables families, individuals, and small businesses to shop for comprehensive health plans based on priorities such as coverage and price.

If you already have health insurance, you may not qualify for premium tax credits for a Marketplace plan. Those eligible for Marketplace coverage must enroll during a certain time of year, called open enrollment, except in certain circumstances.

Learn how the Health Insurance Marketplace works, whether you qualify for coverage and reduced premiums, and when to enroll.

Definition and Examples of the Health Insurance Marketplace

The Patient Protection and Affordable Care Act (ACA), often called Obamacare, mandates affordable insurance exchanges. The goal of the provision is to create a market where individuals and small business owners can compare and purchase health care insurance plans that meet ACA price and quality standards.

Essentially, the Health Insurance Marketplace is a government-operated store. Within the Marketplace you can also learn whether you qualify for premium tax credits (to reduce your cost for health insurance) and for government health programs such as the Children’s Health Insurance Program (CHIP) and Medicaid.

The Health Insurance Marketplace is a nationwide federal health insurance exchange you can access at HealthCare.gov. However, some states have their own  state-based exchanges that state residents use instead, such as Covered California (the health insurance marketplace for California).

  • Alternate names: Marketplace, health insurance exchange

How the Health Insurance Marketplace Works

All Marketplace health insurance plans offer the same basic benefits, including doctor visits, hospitalization, and prescription drug coverage. A few extra benefits, such as adult dental and vision care, may be available on certain plans as well. To help you make the most informed decision, the Marketplace lets you shop by a number of different features, including benefits, price, and star rating.

The Marketplace operates seven days a week (except holidays), 24 hours per day, and is accessible online and by phone.

Affordable Care Act Standards

Employer-based health insurance must meet ACA standards. If you have a job-based plan, you can still purchase Marketplace health coverage. However, if your employer’s health care plan meets ACA standards, you’ll have to pay the entire premium for a Marketplace plan.

The ACA requires employers to offer affordable health insurance, defined as less than 9.83% of your income for the lowest-cost self-only coverage. This standard doesn’t apply if you enroll in a family plan, or one offered by your spouse’s employer. For example, if you’re single and only buy job-based coverage for yourself, the lowest-cost available plan must be less than 9.83% of your income. But if you’re married and enroll in family coverage, the rate can exceed that percentage.

The ACA also requires qualifying health coverage to pay at least 60% of covered health care costs. If you aren’t sure if your job-based health insurance meets ACA standards, ask your employer to complete the Marketplace’s Employer Coverage Tool. If the employer’s plans don’t meet ACA standards, you may qualify for premium tax credits for a Marketplace plan.

Eligibility for Marketplace Health Insurance and Premium Tax Credits

Not everyone is eligible for Marketplace health insurance, and some of those that are may not be eligible for premium tax credits to reduce or eliminate the cost of coverage.

To qualify, you:

  • Must reside in the United States
  • Must hold U.S. citizenship or be a U.S. national
  • Can’t be incarcerated

In addition to being eligible for a plan, Marketplace health insurance is designed for people who don’t already have qualifying health coverage. If you have qualifying health coverage, you may be able to get a plan, but won’t qualify for premium tax credits; you’ll have to pay full price.

Qualifying health coverage is any health care plan that meets ACA standards, and can include:

  • CHIP
  • COBRA
  • Employer-sponsored health insurance
  • Independent health insurance purchased outside the Marketplace
  • Medicaid
  • Other Marketplace plans
  • Small Business Health Insurance Program (SHOP) Marketplace plans
  • TRICARE

Medicare enrollees can’t buy Marketplace health insurance to supplement their coverage, and can’t purchase Marketplace dental coverage.

When to Enroll

When you can enroll in a new Marketplace plan depends on your circumstances.

Open Enrollment Period

Typically, you can only enroll for Marketplace coverage during the annual Health Insurance Marketplace open enrollment period in the fall. Open enrollment for 2022 coverage begins Nov. 1, 2021, and ends Jan. 15, 2022. If you enroll by Dec. 15, 2021, your coverage will begin on Jan. 1, 2022.

Qualified applicants can enroll in CHIP and Medicaid at any time.

Special Enrollment Period

If you experience certain life events, such as adopting a child or having a baby, getting married, or loss of health insurance, you may qualify for a special enrollment period (SEP). A special enrollment period is available at any time for eligible enrollees.

To be eligible for Marketplace special enrollment, you may need to enroll 60 days before the qualifying event or no later than 60 days after it, depending on the qualifying event. For example, if you got married, had a child, or got divorced, you would qualify for a special enrollment period that would last for 60 days from the event.

In 2022, marketplaces have the option to provide a monthly special enrollment period for individuals and families eligible for premium tax credits with household incomes up to 150% of the federal poverty level. This would expand opportunities for low-income households to enroll and qualify for premium tax credits outside the open enrollment period.

Types of Health Insurance Marketplace Plans

The Marketplace offers platinum, gold, silver, and bronze level plans. These metal levels indicate the percentage of health care costs the insurer and you must pay.

Category What You Pay What the Insurer Pays
Platinum 10% 90%
Gold 20% 80%
Silver 30% 70%
Bronze 40% 60%

Bronze coverage requires you pay the highest percentage of health care costs but offers the lowest premium. Platinum plans pay the highest percentage of costs but have the highest premiums. Typically, more-affordable plans also have higher deductibles.

The Marketplace features several of the most common types of health insurance plans:

  • Exclusive Provider Organization (EPO): Except for emergency care, EPOs require you to seek doctors, hospitals, and specialists within a specified network.
  • Health Maintenance Organization (HMO): HMOs cover care provided by doctors that they employ and those with whom they contract for services. Some HMOs only offer policies to people who live or work within a service area and they usually only cover out-of-network costs for emergency care.
  • Point of Service (POS): With a POS, you pay less for health care services provided by in-network providers, but to see a specialist, you must obtain a referral from your primary care physician.
  • Preferred Provider Organization (PPO): PPOs offer savings when you seek health care services within the network, and they pay for out-of-network care, without a referral, for an additional cost.

How To Get Health Insurance Marketplace Coverage

The Health Insurance Marketplace enables you to review and purchase a health plan online at HealthCare.gov. The Marketplace also operates a 24/7 call center at (800) 318-2596 and TTY callers can call (855) 889-4325.

Seventeen states and the District of Columbia, listed below, operate their own health insurance exchanges. Health insurance shoppers in these locations must access their designated exchange, while people in other states can shop for and purchase coverage at the federal Health Insurance Marketplace.

Key Takeaways

  • The Health Insurance Marketplace is a government-operated arena where you can compare and buy health insurance.
  • Premium tax credits to reduce the cost of coverage are only available to people who don’t already have qualifying health coverage and who meet income requirements.
  • Except in certain circumstances, you can only enroll in a Marketplace health plan during open enrollment.
  • The Marketplace groups health insurance plans into four different metal tiers, which indicate your share of costs.