Health Insurance Exchanges: Everything You Need to Know

If you’re looking for health insurance coverage, you’ve probably heard about health insurance exchanges. These marketplaces were created as part of the Affordable Care Act (ACA) and allow consumers to shop for and enroll in health insurance plans online. Let’s take a closer look at what health insurance exchanges are, how they work, and what you need to know to get the coverage you need.

What Are Health Insurance Exchanges?

Health insurance exchanges, also known as health insurance marketplaces, were created by the ACA to provide individuals and small businesses with access to affordable health insurance options. These marketplaces allow consumers to compare plans and prices from different insurance companies and enroll in coverage.

Each state operates its own health insurance exchange, and consumers can also use the federal exchange,, if their state doesn’t have its own exchange. The plans offered on the exchange must meet minimum coverage requirements set by the ACA, and consumers may be eligible for financial assistance to help pay for their coverage.

Types of Health Insurance Exchanges

There are two types of health insurance exchanges: state-based and federally facilitated. State-based exchanges are run by individual states, while federally facilitated exchanges are operated by the federal government.

Most states operate their own exchange, but a few use the federal exchange. Some states have also chosen to partner with the federal government to operate a state-federal partnership exchange.

Who Can Use Health Insurance Exchanges?

Anyone can use a health insurance exchange to shop for and enroll in coverage, although there may be restrictions for certain enrollment periods. For example, open enrollment for plans on the exchange runs from November 1 to December 15 each year, with some states offering extended enrollment periods.

Individuals may also be eligible for a special enrollment period if they experience a qualifying life event, such as getting married or having a baby. Small businesses can use the Small Business Health Options Program (SHOP) marketplace to offer coverage to their employees.

How Do Health Insurance Exchanges Work?

Health insurance exchanges work by offering a variety of health insurance plans from different insurance companies. Consumers can browse the plans and compare prices and coverage options.

When consumers find a plan they like, they can enroll in coverage online through the exchange. They may be eligible for financial assistance to help pay for their coverage, depending on their income and other factors.

Types of Health Insurance Plans on the Exchange

There are several types of health insurance plans available on the exchange:

Plan Type
Health Maintenance Organization (HMO)
Requires you to choose a primary care physician and only covers care received from providers in the HMO network.
Preferred Provider Organization (PPO)
Allows you to see any provider, but you’ll pay less if you stay within the PPO network.
Point of Service (POS)
A hybrid of HMO and PPO plans that requires you to choose a primary care physician but allows you to see providers outside the network with higher out-of-pocket costs.
Exclusive Provider Organization (EPO)
Similar to a PPO, but only covers care received from providers in the EPO network except in emergencies.
Catastrophic Plan
A high-deductible health plan that is only available to individuals under 30 or those who qualify for a hardship exemption.

Consumers can also choose between plans with different levels of coverage, known as metal tiers:

Metal Tier
Lowest monthly premium but highest out-of-pocket costs. Covers about 60% of medical costs.
Higher monthly premium but lower out-of-pocket costs. Covers about 70% of medical costs.
Higher monthly premium but lower out-of-pocket costs than silver. Covers about 80% of medical costs.
Highest monthly premium but lowest out-of-pocket costs. Covers about 90% of medical costs.


What is the Affordable Care Act?

The Affordable Care Act (ACA), also known as Obamacare, is a federal law that was enacted in 2010 with the goal of making healthcare more affordable and accessible for all Americans.

Do I have to enroll in health insurance?

Under the ACA’s individual mandate, most individuals are required to have health insurance or pay a penalty. However, the penalty was eliminated starting in 2019.

Can I still get health insurance if I have a pre-existing condition?

Yes, under the ACA, insurance companies cannot deny coverage to individuals with pre-existing conditions.

How can I get financial assistance to pay for my health insurance?

Depending on your income and other factors, you may be eligible for premium tax credits, cost-sharing reductions, or Medicaid. You can apply for financial assistance through the health insurance exchange.

What happens if I don’t enroll in health insurance?

If you don’t enroll in health insurance during open enrollment or a special enrollment period, you may have to pay a penalty or be uninsured for the year. This can result in high out-of-pocket costs if you need medical care.

Can I enroll in health insurance outside of open enrollment?

You may be eligible for a special enrollment period if you experience a qualifying life event, such as getting married or losing your job. Check with your state’s health insurance exchange for more information.

Now that you know more about health insurance exchanges, you’re ready to start shopping for the coverage you need. Remember to compare plans and prices carefully to find the right coverage for you and your family.