Several terminologies have been associated with the Affordable Care Act, and a common question that comes in the mind of a good number of people is “where should I shop for health plans?”. People often don’t have clarity on whether they should shop on-exchange or off-exchange and basically what is the difference between the two. Before heading for health insurance shopping people first need to check whether they qualify for financial assistance or not? Based on their answer they should decide whether they should shop through on-exchange or off-exchange plans.
Health Insurance Exchange
The health insurance exchange is a portal providing comprehensive information on health insurance plans, enrollment eligibility for different plans, and several other useful information on the health insurance sector. Health insurance exchanges are generally of two main types, public and private. An exchange that is run and sponsored by a government entity is called a public exchange such as Healthcare.gov, whereas a private exchange is run and sponsored by a private entity of the business. Irrespective of the choice of the exchange of people, the health insurance prices will always be the same. The only difference is in the accessing of the financial assistance.
On-Exchange Vs Off-Exchange Health Plans
The health insurance plans that are only available on the public exchange are termed as On-exchange health plans. Around 3.5% of the U.S. population is eligible for financial assistance, therefore people who qualify for a subsidy and choose to use it on their health insurance should shop for an on-exchange plan. ACA-subsidy is only applicable to health plans offered through the public health insurance exchange.
The health insurance plans that are available outside of the public exchange or in the open market are known as off-exchange health plans. The biggest advantage of shopping for off-exchange plans is greater plan choices and all those people who don’t qualify for an ACA-subsidy should shop for off-exchange plans because there are substantial benefits.
Besides on-exchange and off-exchange, people also have the option of health insurance portals that provide access to both on-exchange and off-exchange plans and also help people to determine from where to shop for a proper health insurance coverage. The leading health insurance portals have licensed health insurance professionals, who not only guide them in determining their subsidy eligibility but prove to be of great help in their health insurance shopping mission and help them find the best plan to suit their specific needs and circumstances.
ACA-Subsidy, a Financial Assistance Program
Individuals shopping for health insurance should check if they qualify for any financial assistance or not. ACA-subsidy eligibility depends mainly on annual household income and family size. People’s annual income is the biggest factor depending on which they get financial assistance.
Healthcare.gov Vs Private Exchange
Healthcare.gov is a federal government website through which people can shop and enroll for only on-exchange health insurance plans. It is understood by many people that it is the only place to get access to ACA-compliant individual health plans, however, it is just not true.
Leading health insurance portals also offer access to the same on-exchange health plans as Healthcare.gov, besides providing off-exchange plans. People shopping for the on-exchange plans at these portals will find no difference in the plans if they shop through these portals.
Choosing between On-exchange and Off-exchange Plan
Individuals should choose an on-exchange plan in the following circumstances:
- If they qualify for a government subsidy
- If they like assistance in paying for healthcare
- If they are willing to accept a narrow in-network list of doctors
- If they earn too much to qualify for Medicaid but paying the price of a private health insurance plan is not feasible, then an on-exchange plan proves the best option.
Individuals should Choose Off-exchange Plan in the following circumstances:
- If they earn too much to qualify for a government subsidy
- If their preferred doctor does not accept any health plans offered through the exchange, and they often visit this doctor, then it makes sense to have a plan which their doctor accepts rather than paying out-of-pocket to see them.