Private Health Insurance vs. Marketplace Plans: How to Know Which One Is Right for You

When shopping for health insurance, many people automatically turn to the ACA Marketplace (also called the exchange) without realizing that private, off-exchange health insurance plans may be a better fit, depending on their income, health needs, and future plans.

But how do you know which route is right for you?

Let’s break down the differences so you can make a confident and informed decision.

Marketplace Plans: Government-Backed, Income-Based Support

Marketplace plans are available through Healthcare.gov or your state’s health insurance exchange. They must meet Affordable Care Act (ACA) requirements, including covering essential health benefits, preventive care, and preexisting conditions.

One of the biggest advantages is income-based subsidies. According to the U.S. Department of Health and Human Services, over 90% of marketplace enrollees receive premium subsidies, and many also qualify for reduced deductibles and copays through cost-sharing reductions.

Marketplace plans may be ideal if:

• Your income qualifies you for advance premium tax credits (APTCs)
• You have preexisting health conditions and want full ACA protection
• You don’t qualify for employer-sponsored coverage

However, marketplace plans are only available during open enrollment or a qualifying life event, and networks can be narrow, especially for specialists and rural areas.

Private Plans: Flexibility with Fewer Strings

Private or off-exchange plans are sold directly by insurance carriers or brokers and are not eligible for federal subsidies. These plans often offer:

• Broader provider networks
• More plan designs, including short-term or fixed-indemnity coverage
• Faster enrollment outside ACA deadlines

Private plans may also involve medical underwriting, especially if they are not ACA-compliant. This could result in denial or higher premiums if you have significant health issues.

However, if you’re in good health and don’t qualify for subsidies, private plans can offer lower monthly premiums and greater flexibility. Some plans even allow national networks for those who travel frequently or live part-time in another state.

Decision Framework: Ask Yourself These Questions

• Do I qualify for subsidies? (Check Healthcare.gov’s calculator.)
• Do I need ACA-level coverage for preexisting conditions?
• Do I want to keep my current doctor or hospital system?
• Am I healthy and looking for a cost-effective plan without subsidies?

According to a 2023 Kaiser Family Foundation report, the average unsubsidized silver plan premium on the Marketplace was $560/month for a 40-year-old, a cost that may be reduced with subsidies but can be steep without them. In contrast, some private plans offer coverage under $300/month, though with fewer bells and whistles.

We Can Help

There’s no one-size-fits-all solution when it comes to health insurance. Marketplace plans offer strong protections and affordability for many, while private plans may provide flexibility and savings for others. The best choice depends on your unique situation.

If you need help evaluating your options, contact our office to review your eligibility and find a plan that fits your needs and budget.