This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The advantages of buying health insurance outside an exchange





The Affordable Care Act says you must enroll in a health insurance plan by March 31, 2014, or you could face penalties -- up to $95 a person this year, more in later years. To help people buy insurance under this "individual mandate," the feds told each state to open a health insurance marketplace, aka exchange. In states that refused or failed to do so, the federal government runs the exchange.

But health insurance exchanges aren't the only game in town. You are free to buy health insurance outside your state's exchange.

Only people who qualify for subsidies are forced into the exchanges -- if your plan isn't from the exchange, you won't get your tax credits as subsidy. But for everyone else, the free market awaits.

Greater choice off exchange

The No. 1 reason for buying off-exchange is greater choice. Every health plan on an exchange in your state must be offered off the exchange at the exact same price, says Peter Freska, a benefits consultant with The LBL Group in Los Alamitos, Calif.

However, the opposite is not true. Health insurance companies can and do offer lots of health plans that are not available through the exchanges.

Under the Affordable Care Act, all plans must offer 10 essential benefits, inside and outside exchanges. But if you're looking for a specific set of benefits beyond that, shopping off-exchange could give you a wide range of choices and opportunity to better tailor a policy to your needs.

More providers in the network

Another reason to shop for your health insurance off-exchange is the network of health care providers included in the plan. In some cases, health insurance companies are controlling their costs by limiting the provider networks for exchange plans.

One large insurance company in California, Anthem, does not offer a preferred provider organization on the exchange. Rather, it has exclusive provider organization plans, or EPOs, Freska says. "But if you shop off-exchange and ask an agent to review all options available, you would have many different plans from which to choose at that metal level."

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs