What is a health insurance marketplace?

Healthcare.gov

Obamacare’s insurance marketplaces are the websites where shoppers can buy health insurance coverage, sometimes with financial help from the federal government.

Marketplaces are supposed to make it easier to shop for coverage

Before the health care law passed, it was really hard to compare different insurance policies on the individual market. There was no one place to browse options. And even on sites like EHealthInsurance, which did include many plan choices, it was especially hard to compare between products. Some plans would have high co-payments but low deductibles, or a complex co-insurance structure only spelled out in fine print.

The idea of the the health insurance marketplaces was to eliminate a lot of this confusion — to make it easier to find plans in one place, and compare them. All of the plans on the marketplace display the same basic information to consumers, like what’s shown below.

Healthcare.gov

Insurance plans still use different co-payments and deductibles. But the health care law tries to make comparisons simpler by grouping all products into different metal levels: bronze, silver, gold, and platinum.

Bronze plans are the skimpiest coverage. No matter what their cost sharing structure, they will, on average, cover 60 percent of enrollees’ health care costs. Silver plans are a bit better: they tend to cover 70 percent of subscribers’ bills. For gold and platinum, the number rises up to 80 and 90 percent, respectively.

Once somebody picks a plan on the insurance marketplace, their enrollment file gets sent electronically to the health plan, which typically collects the first month’s premium, sends out an ID card, and begins to provide coverage.

In most states, the marketplace is Healthcare.gov

Kaiser Family Foundation

During Obamacare’s implementation, states had a choice: they could build their own marketplaces or use a federal fallback option. Thirty-seven states chose the latter option, and their residents use the Healthcare.gov site to shop for coverage.

Thirteen states and the District of Columbia built their own marketplaces, which gave them the ability to tailor the website a bit more to their own needs. Those states’ marketplaces have different names; the Kentucky marketplace, for example, is called Kynect while the one in Connecticut is AccessHealthCT.

Kentucky Kynect

While these marketplaces look different, they essentially do the same thing: offer a portal where insurance shoppers can compare options and, eventually, purchase a plan.

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