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Health insurance exchanges: What you need to know

Health insurance exchanges were created by the Patient Protection and Affordable Care Act, which requires that most U.S. citizens and legal residents have health insurance. Health insurance exchanges, also called marketplaces, make insurance available to people who don't have coverage, people who need financial assistance, and small businesses and their employees.

Health insurance exchanges look slightly different from state to state, depending on if a state has chosen to use a federally facilitated model. However, what all exchanges have in common is the goal to help you:

  • Determine if you're eligible for Medicaid, low-cost coverage or financial assistance to cover the costs of health insurance
  • Compare and contrast health insurance plans
  • Choose and enroll in a health insurance plan that meets your needs

How do health insurance exchanges work?

Health insurance exchanges provide access to health insurance plans offered by private companies. These plans must cover a core set of benefits — called essential health benefits — that includes hospitalization, maternity and newborn care, prescription drug coverage, and mental health and substance abuse services. Many preventive services are offered at no cost.

To participate in a health insurance exchange, you fill out an application that provides information about your household size and income. You then find out if you qualify for Medicaid, low-cost coverage or financial assistance to cover the costs of health insurance. Health insurance exchanges also allow you to see and compare different insurance plans.

None of these insurance plans can turn you away or charge you more for coverage because you have an illness or medical condition.

How do I apply?

You can fill out an application in one of four ways:

  • Online at www.HealthCare.gov
  • By telephone at 800-318-2596
  • In person with a trained counselor
  • By mailing in an application downloaded from www.HealthCare.gov

How can I find out if I'm eligible for Medicaid or financial assistance?

Eligibility for Medicaid has been expanded in many but not all states. You can find out if you qualify for Medicaid or financial assistance at www.HealthCare.gov, by telephone (800-318-2596) or with the help of a trained counselor (LocalHelp.HealthCare.gov).

If you already have Medicaid, there will be no change for you. You don't need to apply again.

I have health insurance through my employer. How will the exchanges affect me?

If you're eligible for job-based insurance, you can still look into the insurance plans offered through an exchange. But you won't qualify for lower costs unless the insurance offered by your employer is unaffordable or doesn't meet minimum requirements.

If job-based insurance from your employer costs more than 9.5 percent of your annual household income, you may be eligible for a tax credit. Check with your employer's human resources department if you have questions. The same is true if you receive retiree health insurance benefits.

Do the plans offered through exchanges have copays and out-of-pocket costs?

Yes. As with all health insurance plans, the plans offered through the exchanges have some out-of-pocket costs and copays. You can compare plans to see what the costs are likely to be for you.

How do I know if the plan I select will let me continue to see my doctor?

Health insurance plans offered through the exchanges must make a directory of participating doctors available to you. Be sure to check the directory or call your doctor to check on his or her participation before you choose a plan.

Last updated: February 5th, 2014

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