What is Marketplace Insurance?

Marketplace insurance, also known as health insurance exchange, is a platform for individuals to purchase health insurance plans offered by private companies. Established under the Affordable Care Act (ACA) in 2014, the marketplace aims to provide affordable and comprehensive health insurance coverage to Americans who lack access to or cannot afford private insurance plans.

How Does Marketplace Insurance Work?

The Marketplace is an online platform managed by the federal government or state governments where consumers can compare and purchase affordable health insurance plans. Consumers can enter their basic information, such as age, zip code, family size, and income to see the available plans and their premium costs.

The Marketplace offers several types of plans – Bronze, Silver, Gold, and Platinum. The plans differ in their cost-sharing, deductibles, and out-of-pocket maximums.

Bronze Plan

A Bronze plan is the cheapest option, but has the highest deductible and out-of-pocket costs. It covers 60% of healthcare costs, while the remaining 40% is borne by the consumer.

Silver Plan

A Silver plan covers 70% of healthcare costs, while the remaining 30% is borne by the consumer. Silver plans typically have lower deductibles and out-of-pocket maximums compared to Bronze plans.

Gold Plan

A Gold plan covers 80% of healthcare costs, while the remaining 20% is borne by the consumer. Gold plans have higher premiums, but lower deductibles and out-of-pocket maximums compared to Silver plans.

Platinum Plan

A Platinum plan covers 90% of healthcare costs, while the remaining 10% is borne by the consumer. Platinum plans have the highest premiums, but the lowest deductibles and out-of-pocket maximums compared to Bronze, Silver, and Gold plans.

Consumers can also apply for premium tax credits, which reduce the cost of the monthly premium based on their income levels. The amount of the tax credit is based on the second-lowest cost Silver plan available in the consumer’s area.

Who Can Purchase Marketplace Insurance?

Marketplace insurance is available to legal residents of the United States who are not eligible for Medicare, Medicaid, or another type of government-sponsored health insurance. Consumers must also meet certain income requirements, which vary by state.

Consumers can purchase Marketplace insurance during the open enrollment period, which typically lasts for six weeks in November and December. Consumers can also purchase Marketplace insurance during a special enrollment period if they experience a qualifying life event, such as losing their job, getting married, or having a baby.

FAQ