Shopping for Health Insurance Outside of the Health Insurance Marketplace
There are three main ways to get covered in the individual and family market under the Affordable Care Act:
- Enroll online, over the phone, or in person with an assister through the government exchange Healthcare.Gov (the official health insurance marketplace). A simple and smart choice if you know you qualify for cost assistance and have an idea of what plan you want.
- Enroll online, over the phone, or in person with the assistance of a HealthCare.gov marketplace approved broker. A great choice for finding out all your options since marketplace approved brokers can sell all the plans HealthCare.gov can and can sell some plans that HealthCare.Gov can’t (like short term plans).
- Enroll online, over the phone, or in person with the assistance of a non-approved broker. A solid choice for non-marketplace plans like short term plans (non-approved brokers have a limited selection of plans).
Further, it is important to understand:
- Marketplace plans can only be sold once a year during open enrollment (unless a person qualifies for special enrollment).
- Private brokers can sell short term plans year round.
- Short term plans are expanded for 2019 and beyond, so in some cases people will be able to choose a 12 months “short term” plan as a limited benefit / low cost alternative to major medical marketplace health plans.
- If you have coverage options through your Employer, Medicaid, or Medicare… then you aren’t shopping in the individual and family market and you need to make the broker aware of your status so they know how to help you (you’ll either have access to a different health plan or will use a different source to enroll / manage your plan).
Most people will want to know whether or not they qualify for marketplace cost assistance when they start shopping for plans, and HealthCare.gov offers a range of choices for signing up. Thus, for many it makes sense for their first stop to be HealthCare.Gov.
However, some people will want to know all their options upfront, will want to get in-person help in an area HealthCare.Gov doesn’t have assisters in, or will know they don’t qualify for cost assistance and choose to go directly to a broker.
Thus, for many a private broker outside the marketplace who can help someone pick from both marketplace and non-marketplace plans will be the right choice for them.
Below we cover why someone would want to shop around for quotes outside of the marketplace, what options there are, and how getting covered outside of the marketplace works.
To Enroll, You Must use a Broker or Exchange: When it comes to health insurance, you don’t enroll directly through an insurer, you enroll through a health insurance broker and/or exchange like HealthCare.Gov. This ensures shoppers see a range of competitively priced plans.
Health Insurance Costs are Highly Regulated: All health plans sold on the marketplace are highly regulated, and that means that the price you pay, be it through a HealthCare.gov approved broker, or HealthCare.gov itself, are exactly the same. it is illegal for a broker to charge a person more for a marketplace plan, so how you shop is up to you!
Health Insurance Benefits are Highly Regulated: All qualified major medical plans sold inside and outside of the marketplace have the same basic regulations, offer the same basic benefits, rights, and protections and count as minimum essential coverage. The main differences you’ll find in plans are costs and benefits beyond the minimum standards, different cost-sharing structures for benefits, and different networks.
Only Marketplace Plans Qualify For Cost Assistance: If you want cost assistance, you have to obtain a marketplace plan sold on your state’s Health Insurance Marketplace. If you want a marketplace plan, make sure you are using HealthCare.Gov, the official marketplace of your state, or a qualified “marketplace approved” health insurance agent or broker who can enroll you in a marketplace plan. Many off-marketplace private brokers are qualified agents and brokers who can use a backend portal to sign you up for a marketplace plan.
A Marketplace Approved Broker Can Help You Shop For Marketplace Coverage: You can use a private health insurance broker to help you enroll in a marketplace plan, and you can also go directly to an insurer for assistance (although insurers generally won’t let you sign up with them directly). You can also enroll in a plan not offered on the marketplace through some brokers and insurers in some cases (this differs by state and the type of coverage we are discussing). This means shoppers have options, but also complexities to consider. We always suggest starting your journey at HealthCare.Gov to get a better sense of your options, but the choice is ultimately in the hands of the shopper. When choosing an outside source, consider sticking with local in-person agents and brokers, major insurers, and well known online brokers and make sure you purchase minimum essential coverage.
Short Term is Different From Marketplace Plans: Please note, short term coverage doesn’t follow all the rules of major medical health plans sold on the marketplace. Make sure you understand what type of coverage you are getting!Only Marketplace plans offer cost assistance, but for those making more than 400% FPL shopping for quotes outside of the marketplace may make sense.
Open Enrollment Outside the Marketplace
The first thing to note about enrolling in a major medical plan through the individual market is that you still need to enroll in coverage during open enrollment. Since 2014 all private insurers in the individual market have adopted ObamaCare’s open enrollment period.
Outside of open enrollment, most of the plans you’ll find outside of the marketplace are short term plans unless you qualify for “special enrollment.” These plans don’t have to offer all of ObamaCare’s benefits, rights, and protections.
Why Shop Outside of the Marketplace for Coverage?
There are a few good reasons to shop around for quotes outside of the marketplace. Let’s cover those now:
- You are young and healthy and only need basic coverage. Short term plans can be cheaper than full benefit marketplace plans, so some young and healthy shoppers may opt to go with a short term alternative. Short term plans aren’t sold in the marketplace.
- You don’t make enough for cost assistance. Cost assistance is only available on marketplace plans.
- You want access to a wider array of plans. Since not every plan in every region will be sold on the marketplace, you may need to shop outside of the marketplace to get access to every plan in your region.
- You want assistance from a local agent or broker. Some people will want to enroll in a marketplace plan, but not want to deal with marketplace assisters and the website, and thus will opt to seek a qualified agent or broker who can help them sign up and enroll in a marketplace plan.
- It is outside of open enrollment or you want short term or travelers insurance. You can only obtain marketplace plans during open enrollment unless you qualify for special enrollment. Those who wish to obtain a short term health plan or travelers insurance will need to shop outside of the marketplace both during and outside of open enrollment.
- You qualify for catastrophic coverage. Catastrophic coverage isn’t sold on the marketplace, but some situations can qualify individuals and families for catastrophic health coverage. If you qualify, you’ll need to shop outside of the marketplace.
Will I Pay More For a Health Plan Outside of the Marketplace?
Without taking cost assistance into account, you’ll never pay more for a specific plan in a specific region regardless of how you shop.
9 times out of 10 you’ll be looking at the same exact plans whether you shop on the marketplace or not.
Prices are tightly regulated, and prices of plans cannot be changed based on factors like commissions. Broker and agent commissions are paid for directly by the insurer out of a pool. If you go directly to an insurer, the insurer keeps the commission.
The only things that affect the price of your health plan are: what plan you get, your location, your age, your family size, your income (if you are eligible for cost assistance subsidies), and factors like employer contributions. Your health or where you shop won’t affect the price of a specific plan.
FACT: You’ll never pay more for the same plan in the same region, before cost assistance, regardless of where you buy it.
Should I Shop for Health Quotes Outside of the Marketplace?
There are two main reasons to get assistance outside of the marketplace, one is that you want to sit down with a local or regional agent or broker (for whatever reason). The other is that you don’t qualify for cost assistance. In other words, speaking to assistance, the more money you make, the more viable shopping outside the marketplace becomes.
If you just barely qualify for cost assistance or don’t qualify at all, you may want to understand all of your options.
Chances are you’ll still pick a marketplace plan as even the most expensive subsidized plan is substantially cheaper than an unsubsidized one.
That being said, healthcare costs go beyond premiums, the more medical services you plan to use in a year, the more sense it will make for you to shop around and see all of your options.
You’ll never be locked into a plan until you enroll, and under the ACA switching plans is pretty painless if done during open enrollment. However, once open enrollment is over, you’ll be locked into your plan until the next open enrollment period.
As a rule of thumb, the more cost assistance you are eligible for, the less sense it makes to choose a non-marketplace plan or shop outside of the Health Insurance Marketplace.
Marketplace plans can help you save money if your income changes: Your income can change during the year, if you get a marketplace plan, and your income changes, you can apply for cost assistance in that point. Keep in mind, premium tax credits can be claimed in retrospect during tax time if you ended up qualifying for them.
How to Buy Private Health Plan Even if You Don’t Qualify for Assistance
If you don’t qualify for lower costs based on your income, you can still get coverage 4 ways according to HealthCare.gov:
- Directly from an insurer. You can contact any health insurance company and see plans available in your area. Many have websites that let you compare all plans available from that company. You can take a look at the advertisers on our site or use the HealthCare.Gov Plan Finder website, which presents information about private health plans available outside the Marketplace. Insurers generally won’t allow you to actually enroll in a plan through them, but they can assist you in understanding the plans they offer.
- With the help of an insurance agent or broker. Agents usually work for a single health insurance company. Brokers sell plans from a number of companies. They can help you compare plans based on features and price and complete your enrollment. You don’t pay more to use an agent or broker. They’re paid by the insurance company whose plans they sell.
- From an online health insurance seller. These online services offer health plans from a number of insurance companies. They let you compare prices and features and then enroll with the insurance company.
- Through the Health Insurance Marketplace. You can apply and enroll through the Marketplace whether or not you qualify for lower costs based on your income.
Do I Have to Use the Marketplace To Get a Marketplace Plan?
As noted above, you don’t have to use the marketplace to get a marketplace plan, but you do need a marketplace plan if you want to get cost assistance.
Thus, to get cost assistance, you can get a marketplace plan directly from the marketplace or, you can get help outside of the marketplace from an entity qualified to help customers enroll in a marketplace plan.
The Bottom Line on Off-Marketplace Health Plans
In summary, shopping around for quotes on health plans and finding an assister you are comfortable with is a smart move every open enrollment.
The more you understand what the private insurance market offers, the better your chances of finding the best plan for you. If you qualify for cost assistance, your best choice will almost always be a subsidized marketplace plan. However, even those who qualify for assistance will find that they prefer to sit down with a local broker or agent to go over their options. Ultimately, the choice is up to the customer. However, with that said, we suggest everyone make HealthCare.Gov or a marketplace approved broker their first stop so they can better understand their cost assistance options.
- Private plans outside the Marketplace outside Open Enrollment
- FFM Agent Broker Registration and Termination Status Page