What does "off exchange" health insurance mean
With all the acronyms and health care jargon floating around during open enrollment, figuring out what everything means can be...complicated. You may have heard the terms “marketplace” and “ACA” and “exchanges” floating around. So what does it all mean?
Let’s start with a few simple definitions:
ACA - this is short for Affordable Care Act which was enacted in March 2010 and that provides consumers with subsidies (aka premium tax credits) for those who have income that falls between 100% and 400% of the federal poverty level (FPL).
Individual Market - this consists of all individual health plans offered both on- and off-exchange.
On-Exchange Plans - these are plans that must be purchased through marketplaces created by the government, whether it be state governments or the federal marketplace (Healthcare.gov).
Off-Exchange Plans - these plans can be purchased anywhere off the exchanges. They may be purchased through a broker or directly through a health insurance company.
With this in mind, it’s good to understand how off-exchange plans work. In simple terms, it’s just a health insurance policy that is purchased directly from the insurance company or through a health insurance agent or broker. The main point is that it is purchased outside of the state of federal health insurance marketplace. As such, it often has a much easier application process. The key thing to note is that off-exchange plans are not eligible for subsidies or premium tax credits.
In some cases, a plan may be sold both on-exchange and off-exchange. In these cases, the price will be the same no matter where it is offered. Some insurance companies make it simple and sell identical plans both on and off the exchanges, known as “mirrored” plans. Those that qualify for subsidies should be sure to shop on the exchange, as that is the only way to qualify and enact your subsidy for your chosen health care plan.
Heads up! Health insurance carrier may offer different plan networks or designs for off-network plans. Those plans offered outside the exchange that are different from those offered on the exchange may have different pricing. It may be possible to find an off-exchange plan with more coverage and benefits than those offered on the exchange as those enrolled in off-exchange plans tend to spend less overall money on claims than their counterparts who enroll on a state of federal exchange.
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Is your head still spinning from all the acronyms and jargon? Take a breather; we’ve got your back. Did you know Decent offers a Pathfinder Bronze Plan, Lonestar Bronze Plan, and Trailblazer Silver Plan — all of which offer free primary care?
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