Health Insurance Quotes
The advantages of buying health insurance outside an exchange
The Affordable Care Act requires most Americans to enroll in a health insurance plan or face steep penalties.
Many Americans buy their plans through the government-run online health care exchanges, but health insurance exchanges aren't the only game in town. You are free to buy health insurance outside your state's exchange.
People who qualify for subsidies may be enticed into buying from 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, California.
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," he says.
Your preferred doctor or hospital may not be included in the plan that looks best to you on the exchange. Some health plans such as EPOs and HMOs won't provide coverage if you go outside of their networks for care; others provide only limited coverage, certainly less than you would get if you go to providers in network.
Buying off-exchange can give you access to larger provider networks.
"If you're someone who has a chronic condition or specialist that you appreciate, it would be important to you to make sure that doctor or hospital is part of the network of any health plan you choose," says Kevin Coleman, head of research and data for HealthPocket, Inc. of Sunnyvale, California.
Off-exchange plans also may give you a greater choice when it comes to deductibles, the amount you pay out of pocket before your plan begins to pay.
A recent HealthPocket study showed a great variation in deductibles of the different tiers of plans available on and off exchanges. When deciding on a plan, you have to consider not only the monthly premiums but also the deductibles, Coleman says. If you use a lot of health services and choose a plan with lower monthly premiums but a high deductible, you could end up paying much more out of pocket than you planned.
"When you are comparing plans on and off the exchanges, you have to sweat the details," he says.
Drug coverage is yet another variable. You may find you have more options when it comes to drug coverage if you shop off-exchange. Like provider networks, health plans can limit the drugs that are covered, or reimburse more for generics than brand-names, or reimburse more for drugs you buy mail-order than from your local pharmacy.
If you have a health condition and use a particular drug, you should check that it's covered under the plan in which you want to enroll, whether that plan is on the exchange or off-exchange, Coleman advises.
Remember, too, he says, that the cap on out-of-pocket expenses doesn't apply to drugs not on a health plan's list of covered medications.
Some plans simply aren't available
The exchanges don't offer every category of health insurance that you can buy elsewhere. For example, you cannot buy short-term medical insurance or long-term care insurance from an exchange.
Also, some health insurance companies such as Aetna and UnitedHealthcare have opted not to participate in exchanges in some marketplaces. If you prefer these companies, you will have to buy plans from them outside the exchange.
Coleman says that even if you qualify for a subsidy, it may not be large enough to make it worthwhile to buy from an exchange. Because premium subsidies are calculated on a number of factors including income and age, for some people, the subsidy may not be large enough to make it worthwhile to buy from the exchange. If that's the case, you may find a more affordable off-exchange health plan option.
The bottom line, Coleman and Freska agree, is that you need to shop both on exchange and off-exchange -- compare costs, deductibles, plan types, provider networks and drug coverage.
How to buy outside the exchange
Insure.com provides a comprehensive list of the best health insurers as surveyed by actual policyholders. You can learn about which companies might suit you needs and obtain quotes on varying plans. You could also contact an independent agent in your area.
More from Beth Orenstein here