It’s easy to enroll! Comparison shop online in one convenient place! Get assistance paying for your plan!
All of those things are true – and for many people the Marketplace (Exchange) is the best place to purchase their health insurance. If you need assistance paying for the plan or hope to recover tax credits on your income tax, then you must enroll through the Marketplace.
But, here’s the elephant in the room – enrolling through the Marketplace isn’t best for everyone. In some cases it’s actually a bad option. Some of us really are better off buying directly from the insurance companies – here are the two main groups:
First: Independently Wealthy
You don’t have to own a mansion or a yacht – but if your income is high enough that you won’t receive a tax credit then the Marketplace offers you nothing other than the comparison shopping – and you can do that anonymously and then call the insurance company!
Why? The Marketplace exists primarily as a vehicle for the tax credits you aren’t eligible for. Only a limited number of plans are offered by the Marketplace and many companies don’t participate on the Marketplace. Worse, those that do often limit the offerings available on the Marketplace.
Example: Company ABC offers Plan XYZ and Plan UVW on the Marketplace – both are HMO plans. But Company ABC offers PPO plans directly. Now, there may be nothing wrong with the plans offered on the Marketplace – but if you want or need the flexibility of a PPO and your income allows you to make up the in and out of network differences – then there is no reason to settle for a HMO that doesn’t meet your expectations or needs. Going directly to the insurance company is a better option.
Also, the Marketplace is an unnecessary layer of bureaucracy between you and your insurance company if you don’t receive tax credits. Now, in most cases, this isn’t a problem per se – but it can make minor problems into major headaches – and create problems the insurance company wouldn’t have had otherwise.
How? ANY change to the enrollment must be done through the Marketplace if you bought the plan through the Marketplace – so you can’t change your address by calling your insurance company. Most changes are new applications – necessary for the tax credit determinations but utterly unnecessary for you – and any new application can inadvertently create new problems. Even non-financial (meaning you didn’t apply for assistance) go through an application process to correct the enrollment – the fun starts when none of those changes reflect on the enrollment or they reflect but don’t go over to Company ABC!
Changing your address can change your premium – this is why all the rigmarole – but the insurance company, not the Marketplace, mails the bill. What would be a fairly straightforward, quick process for the insurance company will take any where from a few days to a few weeks (Colorado!) depending on your exchange – and that assumes nothing goes wrong! If there is a problem it can take more than a month – a lot more sometimes – just to let your insurance company know that you moved. And you get no benefit from the intervening agency – the Marketplace.
So, if there is no chance you will be eligible for Advance Premium Tax Credits (APTC) there really isn’t a good reason to buy through the Marketplace. Any insurance company can enroll you during Open Enrollment – they do not need the Marketplace in order to sell you a plan.
And if something happens and you become eligible for tax credits, you can go through the Marketplace at that point – newly eligible for APTC is a Qualifying Life Change Event (QLCE).
Second: Medicaid Eligible
It happens – people get confused or are afraid to be without health insurance so they buy a plan when they are actually eligible for Medicaid. Not only is the Marketplace NOT a good idea for you, it can be a very, very bad idea for your wallet. If you are Medicaid eligible you are NOT eligible for tax credits – any plan you buy will be full price!
The INSTANT you think you might be eligible for Medicaid – or even if you income decreases significantly and you aren’t sure – apply for Medicaid and find out. If you already have a plan through the Marketplace terminate it as soon as you know you have Medicaid (find out when your Medicaid begins and call the Marketplace – they can tell you when exactly to terminate your plan without a coverage gap – or a big bill from losing your tax credits!).
Some people use the Marketplace as a backdoor to Medicaid in states that have their own exchanges and use Medicaid to make determinations. Medicaid offices are notoriously understaffed and the nice person at the Marketplace call center can help with the application, so why not? Honestly, it’s a judgment call – the worst case is that the rep inadvertently enrolls you in a plan and that is most likely to happen in Open Enrollment. So, if you really need the help, go ahead – but make very sure you are only enrolled in Medicaid at the end.
Don’t get me wrong – reps try their best to get the customer what they need. But Open Enrollment is staffed primarily by temporary workers – and the systems they are working with are complex and training isn’t always enough. A harried, inadequately trained rep is going to make mistakes – and they are taught to presume enrollment unless proven otherwise. For a seasoned rep, that’s a good thing – for a new rep, it means they may think all jobs are finished in enrollment – even when no enrollment should be done.
If you are reasonably computer savvy there’s probably no reason to add extra steps to your Medicaid application – just head on over to Medicaid’s website and go for it. If not, and Medicaid isn’t picking up the phone, in some states calling the Marketplace will work – just be careful that you don’t get anything you have to pay for!
Navigating Health Insurance 