Amy Fontinelle has more than 15 years of experience covering personal finance, corporate finance and investing.
Updated February 07, 2023 Reviewed by Reviewed by Anthony BattleAnthony Battle is a CERTIFIED FINANCIAL PLANNER™ professional. He earned the Chartered Financial Consultant® designation for advanced financial planning, the Chartered Life Underwriter® designation for advanced insurance specialization, the Accredited Financial Counselor® for Financial Counseling and both the Retirement Income Certified Professional®, and Certified Retirement Counselor designations for advance retirement planning.
Part of the Series Health Insurance BasicsKnow the Basics
Learn the Lingo
What Does Health Insurance Cost?
Your Health Insurance Premium
Finding a Health Plan
CURRENT ARTICLEIf you need to buy health insurance, you’re in good company. In 2022, the number of uninsured people in the United States was approximately 29 million individuals. We’ll explain each option for buying your own health insurance so you can decide which path might be best for you.
The Health Insurance Marketplace is often referred to as the health insurance “exchange.” Depending on your income and your eligibility for other health insurance coverage, you may qualify for subsidies—also called premium tax credits—when you buy health insurance through the marketplace.
You can buy a marketplace policy even if you are eligible for insurance through your employer, and it doesn’t hurt to see if you can find a better plan for your situation. You probably won’t be eligible for subsidies if you have access to job-based coverage, though.
Open enrollment for 2023 coverage began Nov. 1, 2022. You had to enroll by December 15 for coverage that began Jan. 1, 2023. In 2021, amid the ongoing COVID-19 pandemic, the open enrollment period was extended from February 15 to May 15.
State exchanges may have slightly different enrollment dates. It’s important to buy a policy during this annual enrollment period because you won’t be able to buy a policy for the rest of the year unless you have a qualifying life event like moving, getting married, or having a child.
You can apply online, by phone, or in person. If you need help applying, you can work with a marketplace navigator in some states, a certified application counselor, or in-person assistance personnel. You must be a U.S. citizen or lawfully present in the country to buy a marketplace plan.
Start your search for a marketplace policy at HealthCare.gov. Enter your zip code and you’ll be directed to buy a policy through the federal marketplace. If your state has its own marketplace, you’ll be redirected to your state’s website. You can also find direct links to state exchanges at Healthcare.gov’s The Marketplace in your state site.
If you aren’t sure whether you qualify for Medicaid or the Children's Health Insurance Program (CHIP), you can find out by visiting your state’s Medicaid website or by filling out an application at HealthCare.gov.
In 2021 and 2022, all taxpayers with insurance bought on the Marketplace were eligible for the Affordable Care Act (ACA) premium tax credit; previously, filers were ineligible if their income exceeded 400% of the federal poverty line.
An agent or broker can help you find a good policy for you because they have experience evaluating health insurance plans. The federal government’s Find Local Help tool can help you locate a marketplace-trained private insurance broker. To learn about the greatest number of options and get the least-biased advice, you may want to work with a broker that sells both marketplace and non-marketplace plans.
Health insurance companies pay brokers when they sell policies. Consumers don’t pay a fee to brokers, nor do they pay higher premiums to work with them. “Agent” usually means someone who only sells policies from one insurance company, while “broker” means someone who sells policies from multiple insurance companies.
Private insurance brokers may also show you options on private enrollment sites from insurance companies and web brokers. If you want to qualify for subsidies, however, you should apply through Healthcare.gov or your state exchange.
The government’s health insurance navigators will only show you marketplace plans available through Healthcare.gov. All of these plans are eligible for subsidies, and a navigator’s help is free.
The Health Insurance Marketplace does not include every health insurance plan available. Some people might be able to find a plan that better meets their coverage needs or their budget outside the marketplace. When you’re shopping for a policy on a single insurer’s website, you will, of course, only see options available from one insurer. You’ll need to visit several insurers' websites to see all your options if you want to buy direct.
Affordable Care Act (ACA)-compliant plans sold outside federal and state exchanges must meet the minimum essential coverage standards of the ACA, such as covering pre-existing conditions, providing essential benefits, and offering preventive care at no cost before you meet your deductible.
You can also buy non-ACA-compliant short-term plans (up to 12 months) outside the exchanges that may have more exclusions and fewer benefits. People who are between insurance carriers might think that having some insurance is better than having none at all. Short-term health insurance plans market their perceived coverage as an excellent alternative to ACA-compliant insurance that comes with lower premium costs.
But those lower costs do not mean equal coverage for the consumer. Most short-term plans deny coverage to patients with pre-existing conditions and sharply limit mandated ACA vital essential health benefits (prescription drugs, mental health services, prescription drugs, and maternal care), leaving many with the costly remaining balance. These strategic policy limitations on applicants and the coverage plan are the real reasons behind this alleged affordability. Proceed with caution concerning short-term health insurance because the financial risk may outweigh the financial gains in cost savings.
In short, pay close attention to what you’re signing up for if you apply through a private exchange and when considering any so-called alternative to traditional health plans. If you don’t apply through the federal marketplace, keep in mind that you won’t be eligible for subsidies. If your state operates its own health insurance marketplace, you should buy your health insurance plan through your state marketplace to make sure your plan is eligible for subsidies.
If your income is too high to qualify for subsidies, you might not care. But if you end up earning less than expected in the coming year, you could end up unexpectedly qualifying for subsidies, so you might want to keep your options open. Subsidies are based on how much you earn in the year for which you’re buying coverage. When you enroll, you’ll only be getting an estimate of your subsidies based on your estimated income.
Online health insurance brokerages—also called private enrollment websites or private exchanges—offer to help you compare health insurance plans or get the best available plan based on the information you give them. Comparison shopping is smart, but consumers should understand that these sites will not show them every plan in the market that meets their requirements.
Instead, these private exchanges will show a selection of plans that will earn them a commission if the consumer enrolls. They may display more prominently or provide more information on the plans that earn the brokerage a higher commission.
These marketing incentives don’t necessarily mean the plans these sites offer aren’t good plans. It just means consumers should be aware that they might not be getting a complete picture of their options when they visit one of these sites.
Private enrollment websites may ask you for personal information that the federal and state marketplaces do not. They may ask about your height, weight, and pre-existing conditions—factors that can affect your eligibility for plans that don’t comply with the Affordable Care Act. The company behind the website may also use the personal information you give it to as well as their business partners to market other products to you.
As with buying a policy directly from a health insurance company, you cannot get premium tax credits (subsidies) if you buy your health insurance policy through a private exchange.
If you belong to a union, alumni association, professional organization, or any other large group, you may be able to purchase health insurance through it at group rates. Freelancers Union, for example, offers health insurance through its subsidiary, Freelancers Insurance Agency, and through one of its partners, HealthPlanServices.
When looking for health insurance through an association or membership organization, make sure you will actually be purchasing insurance and not just a health services discount plan. Discount plans might save you money on prescriptions or eyeglasses, but they won’t help you if you get cancer. Also be aware that even if the association itself is a not-for-profit organization, it may be tied to or even established by a for-profit insurance agency through which it sells policies to association members.
The misconception that healthcare-sharing ministries are a form of health insurance can put patients in a financial hole. Healthcare-sharing ministries are operated by non-profit organizations made up of people with a common belief who agree to help pay one another’s medical bills. They may be attractive to healthy individuals looking for low-cost coverage, but they do not provide actual health insurance and are not held to the same standards as regular health insurance companies. In fact, they are under no obligation to pay their members’ medical bills. As a result, some procedures and costs may not be paid for through the membership, and other mandatory ACA critical benefits for substance abuse and mental health are not covered.
Healthcare-sharing ministries generally do not cover pre-existing conditions, often charge higher rates based on health status using a process known as underwriting, and do not guarantee reimbursement, even for the conditions they cover. Although the upfront cost to join a healthcare-sharing organization might be lower than the premiums and other costs of an ACA plan, it might amplify financial stress in the long term. A number of states have taken legal action against healthcare-sharing ministries and have stepped up warnings to consumers.
The average annual premiums in 2021 were $7,911 for single coverage and $22,463 for family coverage, according to research from the Kaiser Family Foundation. The average premium for single coverage increased by 18% since 2017, and the average premium for family coverage increased by 20% during the same period.
If you are retired but still under the age of 65 and no longer have employment health insurance due to job loss, you can apply for coverage through the healthcare Marketplace. Losing coverage will qualify you for a special enrollment period. Based on household size and income, you may qualify for a premium tax credit and lower out-of-pocket costs.
Retirees who are 65 and older will qualify for Medicare and Medicare Advantage. You can also switch to a Marketplace plan if you have retiree health coverage but won’t be eligible for the tax credits and lower out-of-pocket benefits or the special enrollment period. If you turn 65 in the middle of the year, you can apply for a Marketplace plan to cover you until Medicare begins.
If you are 65 but do not qualify for premium-free Medicare, you can buy insurance through the Marketplace and receive lower costs with tax credits.
If you have a terminal illness, need daily assistance with care at home or in a group setting, live in a long-term care or group home, have a disability, or have a condition that limits your employment, there are options available. Disabilities are covered under pre-existing health conditions, and plans cannot charge you more due to your health circumstances before coverage.
With Social Security Disability Income (SSI), you can apply for coverage through Medicaid. Most states automatically grant Medicaid when you get approved for SSI based on disability, although in some states, SSI does not guarantee Medicaid. It pays to check your state's rules. In some states, SSI guarantees eligibility, but separate registration is still necessary. If you have Social Security Disability Insurance (SSDI), you can apply for coverage through Medicare.
Unfortunately, you cannot supplement or change your insurance to a Marketplace plan if you have Medicare already. If you are enrolled in a Marketplace plan prior to your Medicare application, you can keep it as supplement insurance—but you will forfeit any premium tax credits and additional savings offered.
If you own your own business, you can apply for health coverage through the Marketplace. Your income and household size may qualify you for premium tax credits and other insurance savings. There could also be free or low-cost coverage through CHIP or Medicaid programs in your state. Marketplace plans allow business owners to insure their children and spouses. Healthcare savings are based on an estimate of net earnings in the year you apply, not the previous year’s income.
If you don’t get health insurance through work or through Medicare, you have several ways to apply for coverage.
If you’re comfortable doing the research and comparing plans on your own, you can apply yourself through Healthcare.gov. Going through the government’s website can also tell you if you’re eligible for Medicaid and/or CHIP.
If you need help finding the right plan or applying, you can work with a marketplace assistance counselor, navigator, or broker. All of these individuals’ services are free.
You don’t have to buy health insurance through the federal exchange or your state’s exchange (or at all), but you won’t be eligible for premium tax credits unless you do.
Finally, make sure to buy a policy during the annual open enrollment window. It’s your best opportunity to buy affordable, comprehensive coverage.