Health Insurance Marketplace

The health insurance marketplace is a platform which offers insurance plans to individuals, families or small businesses. The Affordable Care Act of 2010 established the marketplace as a means to achieve maximum compliance with the mandate that all Americans carry some form of health insurance. Many states offer their own marketplaces, while the federal government manages an exchange open to residents of other states.

The health insurance marketplace is a key element of the Affordable Care Act (ACA) which the U.S. Congress passed in 2010. The law instructed states to set up their own exchanges where individuals or families without employer-sponsored coverage could compare plans. Many states, however, have chosen not to establish a marketplace and have thus joined the federal exchange. The marketplace facilitates competition among private insurers in a central location where individuals who do not have access to employer-sponsored insurance could find a suitable plan. The individuals must comply with the mandate that all Americans carry health insurance; the marketplace ensures everyone has access to a plan.

Individuals can compare and apply for plans via the marketplace during the open enrollment period. Typically, this period takes place in November and December of the year prior to the year in which the coverage will take effect. Consumers can apply for a special enrollment period in the case of a qualifying event such as the birth of a child, marriage or the loss of another insurance plan.

The marketplace categorizes plans into four tiers: bronze, silver, gold and platinum, in the order of least to greatest coverage. The highest tier, platinum, includes plans that cover approximately 90 percent of health expenses, but the costs are commensurate with this coverage level.

While the plans that insurers offer on the marketplace can vary widely, the ACA requires that  they must each satisfy 10 basic requirements or essential health benefits (EHBs). Many of the EHBs might seem like they would go without saying, but plans can skimp on basic coverage and some political opponents of the ACA have proposed eliminating EHBs since the passage of the ACA. Required benefits include outpatient care coverage, hospitalization, rehabilitative services and preventative care. Newborn, pediatric and maternity care also fall under this umbrella. The ACA does not require large, employer-sponsored insurance plans to cover any of these EHBs. Instead, the writers of the law felt that the marketplace would apply competitive pressure that would force employer plans to comply with these basic mandates.