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Mayo Clinic Health Library

Health insurance exchanges: What you need to know

Updated: 10-31-2018

The Affordable Care Act created health insurance marketplaces (informally known as exchanges) to make insurance available to Americans who don't have coverage or need financial assistance to afford it, and small businesses and their employees.

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

  • Determine if you're eligible for free or 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 marketplaces work?

Health insurance marketplaces provide access to health insurance plans offered by private companies. These plans must cover a core set of 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 marketplace, you fill out an application that provides information about your household size and income. You then find out if you qualify for free or low-cost coverage or financial assistance to cover the costs of health insurance. Health insurance marketplaces 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 pre-existing medical condition.

How do I apply?

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

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

How can I find out if I'm eligible for free or low-cost coverage or financial assistance?

Programs that offer free or low-cost coverage include Medicaid and the Children's Health Insurance Program (CHIP). Eligibility for Medicaid has been expanded in many but not all states. You can find out if you qualify for Medicaid, CHIP or financial assistance at www.HealthCare.gov, by telephone (800-318-2596) or with the help of a trained counselor. You can find counselors at https://localhelp.healthcare.gov.

You can apply for and enroll in Medicaid or CHIP at any time of the year. If you already have Medicaid or CHIP, you don't need to apply again during the marketplace open enrollment period.

I have health insurance through my employer. Can I sign up for a marketplace plan?

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

If job-based insurance from your employer costs more than 9.56 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.

Do marketplace plans have copays and out-of-pocket costs?

Yes. As with all health insurance plans, these plans 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 marketplaces 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.