The Affordable Care Act significantly changes the availability, cost and benefits of individual health insurance plans. The law guarantees access to affordable, comprehensive plans without discrimination against you for existing health conditions. If you’re ready to enter the individual market, you have four options for choosing a plan.
- Individual Insurance Exchanges (Marketplaces)
- Insurance Companies
- Health Insurance Agents/Brokers
- Web Brokers
Individual Insurance Exchanges (Marketplaces)
- How they work: These are the government-run online exchanges created through the Affordable Care Act. You can find your state’s exchange at www.healthcare.gov. You create an account and provide information about your family, income, age, and any employer-provided health insurance. Then you can compare plans and learn what each will cost you. You can also find out if you’re eligible for a tax credit or subsidy to help you pay for the plans.
- Advantages: You can easily see what plans are available in your area, including the cost, provider network, and benefits. But perhaps the biggest advantage to buying your insurance on the exchange is that you may be eligible for tax credits and subsidies. These can reduce your cost of premiums and copayments.
- Disadvantages: Some of the exchanges have been challenging to navigate.
- How they work: You can go directly to an insurance company’s website or call the company to get information on available plans. You can even enroll in the plans online or over the phone.
- Advantages: You’re dealing with one insurer who can walk you through its plans.
- Disadvantages: If you buy directly from the insurer, you are not eligible for any premium tax credits. You also can’t easily compare plans between insurers.
Health Insurance Agents/Brokers
- How they work: Health insurance agents work for a single company, so your choices are limited. Brokers, however, are independent and represent several companies. Agents and brokers must be licensed to sell health insurance in your state. And they must work with anyone who approaches them, regardless of income. They also need to receive special training and certification to sell insurance on the exchanges. In some instances, they also need to register with the federal government. You can find an agent or broker who specializes in health insurance at the National Association of Health Underwriters, www.nahu.org.
- Advantages: Both can help you find insurance on the exchanges or directly from insurers. They can also provide expert advice along the way.
- Disadvantages: Insurance companies pay brokers and agents fees, so there may be a bias to steer you to plans that provide the highest commission. Brokers may also charge you a separate fee. Plus, if you buy a plan outside of the exchanges, you’re not eligible for any tax credit or subsidy.
- Advantages: You can view and enroll in plans from several insurance companies. Web brokers must display all qualified health plans that appear on the public exchanges. But they are not allowed to sort the plans in a way that could steer you to a particular plan. They also have to disclose who pays them and how and can’t charge any separate fees.
- Disadvantages Not all states allow Web brokers to enroll people in the public exchanges. Also, the insurance company pays brokers a fee, so there still may be a bias to steer you toward plans that provide the greatest commission. Plus, if you buy a plan outside of the exchanges, you’re not eligible for any tax credit or subsidy.