The Health Insurance Marketplace – How It Works

The new Health Insurance Marketplace has changed the way, that millions of Americans shop for health insurance. If you are new to applying for health insurance through the Marketplace, here is some basic information that you should know as well as FAQ.

What is the Health Insurance Marketplace?

The Marketplace (also known as the ‘Exchange’) is an online network where users can shop for health insurance. The exchange is meant to provide individuals who do not have employer-sponsored health insurance with an affordable way to purchase a care plan. Small business owners can use the marketplace to provide health insurance for their employees. Individuals can use the marketplace to purchase individual or family health insurance, as long as they meet the basic qualifications. If you have insurance through your employer, you can still use the exchange but you will pay full price for the insurance.

Health Insurance MarketPlace


Individuals are allowed to purchase plans during an annual open enrollment period from November through the end of January.  If you need to purchase insurance at another time of year, you must have a qualifying life event to do so. Events that allow you to purchase outside of the open enrollment window including having or adopting a baby, moving to a new state, losing your employer-sponsored health care, or getting a divorce.

Is the Marketplace Good or Bad?

While there is criticism of the Affordable Care Act which developed the Marketplace, the act has allowed millions of Americans access to health care. Since the act’s passing, 16.4 million Americans who were not previously eligible for health care have now been able to purchase it.

The number of uninsured African Americans has dropped by 9.2%; the number of uninsured Latinos has dropped by 12.3%, and the number of uninsured females has dropped by 7.7%. Women have additionally benefited from the passage of the ACA because insurers are now banned from defining gender as a “preexisting condition,” and charging women more than men for the same coverage.

The Affordable Care Act also puts rate caps in place. Insurance companies who seek to hike premiums by more than 10% must now justify the extra costs to the state experiencing raised premiums. In 36 states, insurance commissioners now have the power to deny these rate hikes.

FAQ About the Marketplace

Who is eligible for health care through the exchange?

If you are uninsured, you are eligible to apply. You will need to provide proof of income and citizenship.

Can I get subsidized or low-cost health care? 

If you are eligible, you may qualify for free or reduced-cost healthcare through Medicaid and CHIP, the Children’s Health Insurance Program. Check the income requirements for free or reduced-cost health insurance in your state and be prepared to show income evidence when you apply.

How do I apply for health insurance? 

You can apply through the Marketplace online, over the phone, via paper application, or by getting help in person. Call your state’s marketplace or visit their website to find detailed information on how to apply.

How can seniors use the Marketplace?

While seniors are eligible for Medicare, they can also use the exchange to purchase supplementary care. Seniors may elect to purchase a dental plan, switch from Medicare to a Marketplace plan, or purchase supplementary Marketplace insurance. To learn more about options for seniors, consider speaking with a marketplace counselor in your state.

There a penalty for not having health insurance? 

Yes, there is a penalty if you do not have health insurance. Expect to pay 2.5% of your income or $695/adult, whichever is higher.

The dental care offered in the Marketplace? 

Dental care is offered as a supplement to adult health insurance plans. Pediatric dental care is included with all children’s health insurance.

Is vision care offered in the Marketplace? 

Like dental care, adult vision care is available for an extra cost. Children receive comprehensive vision care at no extra cost.

Is prenatal care covered?

All Marketplace plans cover prenatal care. If you are pregnant when signing up for Marketplace, your care is still covered. Once you have your child, you can either keep your current plan and add a child to it, or select a different Marketplace plan.

13 states have developed their exchanges, while the remainder of the states use the federal government’s exchange, and their residents can register for state health care through the federal marketplace. Since each state has different options, it is always best to get answers about health insurance coverage that is particular to the state where you live.

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