Health Insurance Marketplace: A Plain-English Guide to Plans, Tiers and Costs (US)

At a glance

Premiums are only one cost. Deductibles, coinsurance and the out-of-pocket maximum decide your real exposure.
Metal tiers describe how costs are shared, not the quality of care.
Check that your doctors and medicines are covered before you enroll.
Enrollment windows are limited, with special periods for certain life events.

What the marketplace is

The marketplace, also called the exchange, is a website where you enter your household details and see plans from several insurers side by side. It was created under the Affordable Care Act. You can use the federal site, HealthCare.gov, or your state's own exchange, depending on where you live. Plans must cover a set of essential health benefits, such as doctor visits, hospital care, prescriptions, maternity care and mental health services, and insurers cannot refuse you or charge more because of a pre-existing condition.

When you can enroll

Most people enroll during the annual open enrollment period, which on HealthCare.gov generally runs from the start of November into mid-January. Some state exchanges have different dates. Outside this window, you can enroll only if you qualify for a special enrollment period, usually triggered by a life event.

Losing other health coverage, for example when you leave a job.
Getting married, divorced or having or adopting a child.
Moving to a new area where different plans are available.
A change in income that affects your eligibility for help with costs.

You usually have a limited time, often 60 days, to act after the event, and you may need to provide proof.

The metal tiers

Tier	Plan pays on average	You pay on average	Typical profile
Bronze	about 60%	about 40%	Lower premiums, high deductibles; suits people who rarely need care and want protection from big bills
Silver	about 70%	about 30%	Moderate premiums; the only tier that offers cost-sharing reductions for eligible incomes
Gold	about 80%	about 20%	Higher premiums, lower costs when you use care
Platinum	about 90%	about 10%	Highest premiums, lowest costs per visit; less common

These percentages are averages across all members of a plan, not what you will pay for any single bill. A bronze plan is not 'bad care'; the same hospitals and doctors may be in its network. The difference is how much you pay when you use them.

The five numbers that matter

Premium: what you pay every month to keep the plan.
Deductible: what you pay for covered services before the plan starts sharing costs.
Copayment: a fixed amount for a service, such as a doctor visit.
Coinsurance: a percentage you pay after the deductible, such as 20%.
Out-of-pocket maximum: the most you pay in a year for covered, in-network care. After that, the plan pays 100%.

A worked example

Imagine a plan with a 3,000 deductible, 20% coinsurance and a 6,000 out-of-pocket maximum. You have surgery with covered, in-network charges of 10,000.

Step	Amount you pay
Deductible	3,000
20% of the remaining 7,000	1,400
Total for this bill	4,400 (below the 6,000 maximum)

On top of that, you will have paid the year's premiums. Now compare a cheaper plan with a 7,000 deductible, and a pricier plan with a 1,000 deductible. The cheaper plan may cost more across the whole year if you have surgery, but less if you stay healthy. The right choice depends on how much care you expect and how much cash you could find in an emergency.

Help paying for coverage

Many households qualify for premium tax credits that lower the monthly premium, based on household income and the cost of a benchmark plan in their area. People with lower incomes who choose a silver plan may also receive cost-sharing reductions, which lower deductibles and copayments. Some qualify for Medicaid or the Children's Health Insurance Program instead. The amount of financial help and the income limits have changed over time, so check the current figures on the official marketplace before you decide.

Network types

Type	How it works
HMO	You choose a primary care doctor and usually need referrals; out-of-network care is generally not covered except in emergencies.
PPO	More freedom to see specialists and out-of-network providers, usually at a higher cost.
EPO	No out-of-network coverage except emergencies, but typically no referrals needed.
POS	A mix: a primary care doctor and referrals, with some out-of-network options.

Always check that your doctors, hospital and pharmacy are in the network, and check the drug list, called the formulary, for the medicines you take.

A checklist for choosing a plan

Write down the doctors, medicines and expected care for each person in your household.
Enter your income accurately, so that you see the right amount of financial help.
Filter by network type and confirm each doctor and hospital is in network.
Compare the total possible yearly cost: premiums plus the out-of-pocket maximum.
Check the formulary for each medicine.
Read the summary of benefits and coverage, which every plan must provide in a standard format.
Keep your confirmation and your documents, and set a reminder to review your plan next year.

For the self-employed and small business owners

People who run their own restaurant or food business often buy their own coverage through the marketplace. Your premiums may be partly deductible in some situations, so ask an accountant. Small employers with a limited number of staff may also have a separate small-business marketplace. Review plans every year, because insurers change their prices, networks and drug lists. If you are weighing healthcare costs together with other debts, our guide to debt consolidation explains how to organize them.

Questions readers ask

Can I buy marketplace coverage at any time?

Generally only during open enrollment or a special enrollment period. Medicaid and the Children's Health Insurance Program usually accept applications year-round.

Does a bronze plan cover emergencies?

Yes. All marketplace plans cover emergency care, but you may pay a large share before the deductible is met.

What if I do not use my insurance?

Your premium still buys protection against a very large bill. Many people find one unexpected hospital stay would cost far more than a year of premiums.

Where do I check the current rules?

On HealthCare.gov or your state exchange, which publish current dates, income limits and plan details.

This guide is general information, not personal financial, tax, legal or insurance advice. Rules, rates and limits change and differ by country, so confirm current details with the relevant authority or a licensed professional.