Will insurance from a state health insurance exchange be cheaper than what I can get on my own now?

By
October 3, 2013

Q: Will insurance from a state health insurance marketplace (exchange) be cheaper than what I can get on my own now?

A. That depends on a lot of factors, including where you live, your age, your health status, and your income.

Every state has a marketplace (exchange) where people can shop for individual health insurance plans, although rates vary quite a bit from one state to another. There has been tremendous spin from both supporters and opponents of the ACA (Obamacare) regarding rates in the marketplaces, but there’s no simple answer to this question.

Prior to 2014, prices for individual health insurance varied based on medical history, age, gender and geographic location. There were a few states where carriers did not utilize medical underwriting (New York is one example, which helps explain the significant rate decrease in the individual market there, described in the link above), but in the vast majority they did.

So if you’re healthy and you’ve always been able to get an underwritten plan with no rate increase based on your medical history, a policy in the new marketplace might be more expensive for you. But people who have been paying increased premiums because of pre-existing conditions might be able to get new marketplace plans that are less expensive than what they were paying before.

The ACA prohibits gender-based premiums and limits the amount that can be charged for older enrollees to three times the price for younger enrollees. This means that younger people will likely have premiums in 2014 that are higher than what they paid in 2013, whereas older people will have lower premiums (anyone 65 or older will continue to be on Medicare, which is unchanged by the ACA; the marketplaces are irrelevant for them). Premiums in the marketplace can still vary based on tobacco use and geographic location.

The biggest factor that will impact your premiums in the marketplace is whether or not you qualify for subsidies. If you do, this will combine with the factors described above, either to mitigate all of part of the your increased premium, or to further lower your decreased premium.

The people likely to see lower premiums are those who fit into some or all of these categories:

  • older
  • in poorer health
  • income that qualifies for subsidies.

Those who will tend to see higher premiums fit into some or all of these categories:

  • younger
  • in good health
  • income that does not qualify for subsidies.

If your net premium will decrease in the marketplace, your best option is probably to enroll in a marketplace plan before December 23, 2013. (Your effective date will be January 1, 2014.) But if you’re going to be paying more in the marketplace, you can shop “off-exchange” to compare additional options, or consider keeping your current plan until it renews in 2014.


Tags: ACA, health insurance exchange, health insurance marketplace, state health insurance exchange, subsidies

Search within questions

Related terms

health insurance exchange

A health insurance exchange – also known as a health insurance marketplace – is a key provision of the Affordable Care…

health insurance marketplace

A health insurance marketplace – or health insurance exchange – is a key provision of the Affordable Care Act, established to…

subsidies

Individual subsidies were included in the health reform law to help ensure the goals of the legislation's individual mandate. Legislation provides…

Latest Obamacare news & opinion

Health Wonk Review June 5 2014

Health Wonk Review for June 5, 2014

If you haven’t gotten your health policy fix, head over to Health Wonk Review –…

fix-obamacare

Looking beyond the botched ACA rollout

"People have given up on the repeal. There are very few people who want Congress to…

price responsive consumers

Figuring out how to put ‘skin in the game’

The studies indicate that people are very responsive to healthcare prices when they see…

Curbside Consult David Cutler

Can we ‘do the right thing’ profitably?

David Cutler was the author of a prescient and scathing 2010 analysis warning of the need…

obamacare-john-kline

Dem ad slays Obamacare-hating Republican

Of the nearly half a billion dollars that has been spent on political ads mentioning the…

health-wonk-review-may-22-2014

Health Wonk Review for May 22, 2014

Summer's here (at least it is where I am) and with it comes a summer-y edition of Health…

Sabrina Corlette health reform

Obamacare: Just what the doctor ordered?

In Part 2 of my conversation with Sabrina Corlette, we talk about whether the Affordable…

Health Wonk Review May - 2014

Health Wonk Review for May 8, 2014

Just a reminder that if you're still looking for some compelling health policy reading…

youth-enrolled-obamacare

‘Bros’ on board – and other promising signs

With 8 million Americans enrolled in Obamacare's exchanges – 28 percent of them young…

all posts

See all 379 blog posts.

Popular FAQs on Obamacare

Someone told me you have to earn a minimum of $30,000 per year in order to purchase ACA insurance. Is this correct?

I know the individual mandate permits a gap in coverage up to three months per year. What if I’m uninsured for the last three months of 2014 and first three months of 2015?

We’re moving 50 miles, but staying in the same state. Is that a qualifying event?

My parents are 68, but recently moved to the U.S., so they don’t qualify for Medicare. Can they buy insurance in the exchange?

My carrier is allowing me to renew my pre-2014 plan. Can I shop for a new plan instead?

Should I be leery of short-term health insurance plans?

What is short-term health insurance?

Where can I find the list of Obamacare qualifying events?

I’m self-employed and am hiring employees. Under Obamacare, am I obligated to provide health insurance for them?

all posts

See all 227 questions

You need to know:

The status of your state’s health insurance exchange

Obamacare
Penalty
Calculator

Will you
qualify for an Obamacare subsidy?

Should you
look outside
the ACA’s official exchanges?



Learn all about health insurance

what is cancer insurance

Will you need a cancer insurance policy?

While the Affordable Care Act has greatly expanded coverage for millions of Americans –…

HealthSourceRI Director works to persuade lawmakers to keep the exchange

Lawmakers in Rhode Island are considering whether or not to switch from the state run…

prescription drug local search

Save on prescription drugs close to home

The good news is that, whether you are insured or uninsured, anyone can utilize a few…

missed Obamacare enrollment deadline

Miss open enrollment? You’ve got options.

Now that open enrollment has ended – and the extensions have passed in most states –…

qualifying-event-obamacare

Qualifying events that can get you coverage

Even if you missed the general open enrollment, you could still have an opportunity to…

Will you owe an Obamacare Penalty?

Will you owe a penalty under Obamacare?

If, for whatever reason, you decide not to purchase coverage in 2014, you can use the…

STM: Short Term Medical

Short-term health insurance

Now that the 2014 Obamacare open enrollment period is over, a short-term policy will…

Obamacare's essential benefits

Health reform’s 10 essential benefits

The ACA specifies ten benefits be included in all health insurance plans sold on each…

Health insurance for college students.

Student health insurance

Before college starts, students and their families need to ensure that their health…

all posts

See all 46 articles