What is the Difference Between an On Exchange and Off Exchange Health Insurance Plan?
The fundamental difference between an on exchange and off exchange health plan is where the applicant performs his or her enrollment. If the enrollment for the health plan is performed within a government-run marketplace for insurance, it is known as an on-exchange health plan. If the enrollment does not take place within the government-run marketplace for insurance, it is known as an off-exchange health plan. Both on and off-exchange health plans in the individual and small group markets must satisfy Essential Health Benefits coverage requirements and utilize one of the metal plan designs for medical out-of-pocket costs.
Average Premiums for On-Exchange Metal Plans
HealthPocket examined premium data for on-exchange individual health insurance plans across 34 states.
Average monthly premiums by age and metal plan
Premiums increased when moving from a lower-tier metal plan with higher out-of-pocket costs to a higher-tier metal plan with lower out-of-pocket costs. When examining the metal plans, the step between silver and gold plans had the largest premium difference between them while the step between the gold and platinum plans had the smallest.
Average Cost-Sharing for Individual and Family Metal Plans on Exchange
Entry-level Bronze plans only must cover 60% of covered medical expenses for a typical enrollee population, while Silver plans cover 70%, Gold plans 80%, and Platinum plans 90%. Thus average cost-sharing expenses vary among the metal plans with Bronze plans having the largest out-of-pocket costs and Platinum plans having the lowest out-of-pocket costs.
The average out-of-pocket costs below were based on government data for the 2014 individual and family marketplace containing qualified health plans sold on exchanges in 34 states.
Average cost-sharing for an individual in each metal plan
|Cost-sharing category||Deductible||Primary care visit||Specialist visit||Annual cap on out-of-pocket costs|
Average Cost-Sharing for Small Business Metal Plans on Exchange
The Affordable Care Act capped individual deductibles at $2,000 and family deductibles at $4,000. However, in February 2013 the Department of Health and Human Services allowed that in order to maintain the appropriate percentage of out-of-pocket costs for enrollees, small group health insurance plans were permitted to exceed the deductible caps.
The average out-of-pocket costs below were based on government data for the 2014 Small Business Health Options (SHOP) marketplace containing qualified health plans sold on exchanges in 32 states.
|Medical Deductible for an individual enrollee||$4,216||$2,384||$1,278||$323|
|Medical Deductible for a family||$8,667||$4,946||$2,872||$647|
|Primary care visit￼||33%￼||$34￼||$23||$16|
|Annual cap on out-of-pocket costs for an individual||$6,224||$5,690||$3,758||$1,620|
|Annual cap on out-of-pocket costs for a family||$12,518||$11,445||$7,926||$3,240|
The average deductibles for Bronze and Silver plans exceeded the $2,000 individual and $4,000 family deductible caps. Nearly all Bronze plans exceeded the deductible caps for both individuals and families, but no Platinum plans exceeded the deductible caps.
Frequently Asked Questions
Why should I purchase an insurance plan on an exchange?
The main reason someone should use an exchange for enrollment is if the person qualifies for a subsidy. Premium subsidies and cost-sharing reductions for low-income people can only be obtained within an exchange even if the same insurance plan is offered off exchange as well as on exchange.
Are all health insurance plans available on an exchange?
No, not every health insurance company offers its health insurance products on every exchange. United Healthcare, for example, is the largest non-government health insurer in the U.S. but their health insurance products are not available on many exchanges.
Exchanges also do not carry every health insurance product. Neither short-term health insurance nor large group health insurance are currently offered on exchanges. Stop loss policies serving companies that self-insure their employees’ healthcare costs are also unavailable from an exchange.
Are health insurance policies available on an exchange better than policies offered off an exchange?
Exchange participation by insurers varies by state so there is no rule regarding exchanges and health insurance quality. Before enrolling in a health plan, you should confirm that quality doctors, hospitals, and other healthcare providers in your area are included within the health plan’s network.
What if the exchange insurance shopping process confuses me? Will I be able to get help?
Exchanges employ individuals and groups known as navigators to help you enroll in a health insurance plan. They can help explain what health plans are on the exchange but they are prohibited from telling you what health insurance plan in which you should enroll.
Are off-exchange health plans with the same name and insurance company as on-exchange health plans identical?
Not necessarily. An exchange may have additional regulations regarding how participating plans are configured that may lead to some differences between an on-exchange and off-exchange health plan. For example, an exchange could require plans to provide pediatric dental benefits directly through the plan as opposed to a stand-alone policy working in conjunction with the health plan. However, for both on-exchange and off-exchange health plans, the health plans must provide all the mandatory Essential Health Benefits. Moreover both on-exchange and off-exchange plans in the individual and small group markets may only vary premium rates based on four factors: family size (individual or family), geographic rating area, age (up to a 3:1 ratio for adults) and tobacco use (up to a ratio of 1.5:1).