ON vs. OFF the Healthcare Exchange ( The Marketplace or Obamacare)
For such a widely debated topic, I have found that many I speak with about healthcare still do not have a clear understanding between having a plan ON the exchange vs. OFF the exchange.
To keep it simple, ON the exchange means you have purchased a plan through the government marketplace, with a carrier that has offered insurance in your zip code. OFF the exchange means you have purchased your health insurance through the carrier directly. The plans offered ON the exchange and OFF the exchange are vastly different, because of the networks they utilize for their subscribers.
In the past it has been as easy as us knowing a network as being a hospital or doctor that accepts a specific insurance carrier. Now, it no longer only matters who the carrier is, but also which specific network of the carrier (yes, there are multiple now) you have purchased for your plan.
The single greatest reason an individual, family or small business would want to purchase their insurance ON exchange is if they were receiving financial assistance. Financial assistance for an individual or family is based on your age, income and family size. To qualify for assistance you must be at least 100% at the poverty level and cannot exceed 400% of the poverty level. For a small business to qualify for financial assistance ON the exchange, employees must work 30 or more hours, a minimum of 70% of the employees must participate and you must have 50 or fewer employees.
The networks that are offered ON the exchange do have limitations and restrictions associated with them. Insurance companies negotiate contracts with doctors and hospitals across the country. When an insurance provider has an agreement, the services at that facility are known to you as being ‘in network’. When a contract has not been agreed upon for services, it is considered to be ‘out of network’. Therefore, outside of a major medical emergency, your services are not covered by your plan and you will be financially responsible to cover all bills associated with the care you were given, if you sought medical attention ‘out of network’. This is exactly the same for OFF exchange plans. However, typically, an OFF exchange plan will have a much greater network for you to select your services from and the likelihood decreases significantly of you being ‘out of network’ when you have purchased your plan OFF the exchange.
OFF exchange plans typically have a broader range of premiums and plans to choose from with more robust coverage. After an evaluation of the 2015 open enrollment, I found that ON and OFF exchange plans for my clients were to be similar in price. The difference between my two sets of clients were clear; ON exchange clients received financial assistance with restrictions and OFF exchange clients had greater flexibility in a more robust network of doctors and hospitals.
Not all healthcare networks are created equal, but now all policy premiums are. Premiums can only be based on your zip code, gender, tobacco use and age. With the enactment of the ACA (Affordable Care Act) massive things changed in the industry. As time progresses, the law is continuing to evolve and shape. Regardless if you are ON or OFF the exchange, now everyone with a policy is able to receive a wellness exam yearly free of charge, children now have access to vision and dental, woman now automatically have maternity care coverage, mental health is covered and no one has a lifetime limit on the amount of care that will be paid for.
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