The Health Insurance Marketplace, also known as the ACA (Affordable Care Act) or Obamacare, offers individual health insurance plans for people who don’t have access to an employer or government-sponsored health plan. 

Since its introduction in 2010, the Affordable Care Act has drastically changed health insurance in the United States and has had a huge effect on the choices available for individual health insurance consumers. Among the many provisions of the ACA, a few of the most significant mandates include guaranteed issue policies (no health underwriting), no pre-existing condition exclusions, so-called “essential health benefits”, and taxpayer-funded premium subsidies based on household income. 

Due to its political implications, the topic of the ACA and Marketplace health plans is not a popular one, especially because only a small percent of the U.S. population requires individual/family health insurance. Most Americans acquire health insurance through their employer. On all sides of the argument, there are many misconceptions about what these plans are and the coverage they provide. Regardless of political opinions, people who don’t have access to an employer-sponsored plan, such as the self-employed, should consider a Marketplace plan, as they are the primary way to secure individual/family health insurance coverage. 

Let’s discuss the pros and cons of Marketplace plans. There is no one perfect solution for individual/family health insurance, and compromises must be made in one way or another. Once you’re aware of the positive and negative attributes of these plans, you can get a better idea if they’re right for you. 

Pros of Marketplace Plans

Affordable Monthly Premiums (with subsidy)

What makes Marketplace plans especially unique is that they make available subsidies for those who qualify based on household income. If your income is within a certain range based on the number of household members you have, you can qualify for a subsidy (advanced premium tax credit) that is put directly towards your monthly premium. This makes plans that would otherwise be expensive much more affordable, or even free if your income is low enough for your household size.

No Health Underwriting

As mandated by the Affordable Care Act, Marketplace plans are NOT allowed to review your health history in order to accept or deny an application, which is known as underwriting. Marketplace plans are guaranteed issue, regardless of previous health issues no matter how severe they are.

No Pre-Existing Condition Exclusions

Along with not having any health underwriting, there are no coverage exclusions for pre-existing conditions when it comes to Marketplace plans. Regardless of any past or ongoing health issues you may have, treatment will be covered according to the policy.

Comprehensive Coverage

Marketplace plans are also required to cover so-called “essential health benefits” such as preventative care. In addition, all Marketplace plans have a clearly defined out-of-pocket maximum, meaning they provide coverage for both routine healthcare and major medical. Lastly, they tend to have fewer exclusions and limitations to coverage when compared to non-marketplace plans.

Cons of Marketplace Plans

Expensive Monthly Premiums (without subsidy)

While many people can be eligible for Marketplace subsidies, there are still a lot of people who will not qualify for them because of their income. Without a subsidy, monthly premiums for Marketplace plans can be extremely expensive. If you don’t qualify for a subsidy, you can still enroll for the full cost of the plan.

Limited Provider Networks

All Marketplace plans, regardless of the insurance carrier use HMO networks. These networks are more specific to your geographic area and may be more restrictive about what providers are in-network for your plan. Because Marketplace plans do not provide any coverage for out-of-network providers, it’s extremely important to be aware of who is in network and where you can go for healthcare services. However, understand that if you require emergency medical care, there are no network requirements.

High Out-of-Pocket Costs

As with all individual/family health plans, expect higher out-of-pocket costs when compared to group health plans. This includes things like higher deductibles (per person for family plans), out-of-pocket maximums, and copays, especially for the lower-cost bronze and silver plans.

Strict Enrollment Deadlines

Aside from Special Enrollment Periods (SEP), which only apply if you’ve lost qualifying health coverage and a few other specific situations, Marketplace plans can only be enrolled in during the Annual Enrollment Period (AEP). The AEP generally takes place from November 1st through December 15th each year for a plan that will be effective on January 1st. Unless you qualify for a Special Enrollment Period (SEP), for specific situations like losing employer-sponsored coverage, moving, or having a child, you will have to wait until the AEP to enroll in a marketplace plan.

Conclusion

Like any health plan, Marketplace plans have their pros and cons. There is no one perfect solution for individual/family health insurance, so it’s important to understand what to expect before you choose a plan. Each person or family is different when it comes to their coverage needs and financial concerns, so hopefully this pros and cons list will help you determine if a marketplace plan is right for you. If you’re still unsure of where to start, make sure to speak with a trusted health insurance agent/broker to guide you through the process.

This information is provided by HealthCare Advisors, a Cincinnati, Ohio-based individual health insurance broker dedicated to helping folks find the coverage thats right for them, for the right value. Our services are available for residents of OH, KY, IN, FL, GA, NC, MI, AZ, MO, SC, and TN. CLICK HERE to schedule a free, no-obligation phone consultation to learn more about your health insurance options.

 

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