What are state exchange plans?

State-based health insurance is sold via state health insurance exchanges. A state-based health insurance exchange is an insurance marketplace where the state provides the infrastructure, the website, and the customer support for individuals and small businesses to purchase state-based plans.

When the Affordable Care Act was signed into law by President Obama in 2010, states were allowed to choose whether to establish their own state-based health insurance exchanges or not. Some states already had their own state-based health insurance exchanges, so they could decide if they wanted to continue operating. In states that chose to not form their own health insurance exchanges and offer state-based plans, individuals can obtain insurance through the federal exchange. There are also other options for buying health insurance on the individual market, such as getting a plan directly through the insurance company, or buying from a private broker like eHealth, where you’ll get to see hundreds of plans from various companies.

Every state has major medical plans that are not sold on the state-exchange, so make sure to check out this type of “state-based” health insurance when shopping online. States that offer their own health insurance are allowed to determine which insurers can offer state-based plans via their exchanges.

In some states, all insurers can participate. In others, they must meet certain coverage or rate requirements. In yet others, the states give priority to insurers whose plans offer benefits that align with the state’s overall health needs. For example, if a state has a high rate of obesity, it might select insurers that offer coverage focused on obesity treatments.

What type of health insurance exchange does my state have?

Currently, there are 15 states with their own marketplaces. Some of these marketplaces offer plans for individuals, as well as for small business owners and employees. Others have marketplaces that are only for owners and employees of small businesses. In these states, individuals can’t purchase state-based health insurance and are instead required to go to Healthcare.gov. But in every state, people still have the choice to buy on private marketplaces, such as brokers like eHealth, or straight from a health insurance company. Below are the states with their own state-based insurance marketplaces:

• California
• Colorado
• Connecticut
• District of Columbia
• Idaho
• Kentucky
• Maine
• Maryland
• Massachusetts
• Minnesota
• Nevada
• New Jersey
• New Mexico
• New York
• Pennsylvania
• Rhode Island
• Vermont
• Virginia
• Washington

Key components of state exchange plans

Understanding the key components of state exchange plans can help you make informed decisions about your health insurance. Here’s a breakdown of what you need to know about these plans:

Eligibility criteria

State exchange plans, part of the Affordable Care Act (ACA), are available to residents who do not have access to affordable health insurance through an employer and are not covered by Medicare or Medicaid. To qualify, you must also live within the state where the exchange is offered and meet certain income requirements, which can vary by state. Importantly, these plans are open to all regardless of pre-existing conditions.

Coverage options

Coverage options in state exchange plans are designed to be comprehensive to meet the essential health benefits as defined by the ACA. This includes outpatient care, emergency services, hospitalization, maternity and newborn care, mental health services, prescription drugs, and more. Plans are categorized into different levels—Bronze, Silver, Gold, and Platinum—which indicate the percentage of healthcare costs the plan covers relative to what you pay out-of-pocket.

Cost-sharing provisions

Cost-sharing provisions are critical to understand when selecting a state exchange plan. These provisions detail how the costs of services will be split between you and the insurer. Typically, lower premium plans (like Bronze) will have higher out-of-pocket costs at the point of service, such as higher deductibles and copays, whereas higher premium plans (like Platinum) generally offer lower out-of-pocket costs. Additionally, some individuals may qualify for cost-sharing reductions which lower the amount you pay for deductibles, copayments, and coinsurance if you select a Silver plan and meet specific income criteria.

Subsidies and financial assistance

 If you earn between 100 percent and 400 percent of the federal poverty level, then you qualify for federally supported state-based health insurance. That means that your monthly premiums for your state-based health insurance plan will be lower depending on how much subsidy you qualify for.

Federal subsidies on state-based health insurance are frequently referred to as “tax credits” because they’re automatically added to your tax refund. However, they’re applied at the beginning of the tax period to lower the premiums on your state-based plan based on your estimated income for the year. If you earn more or less than what you estimated, your subsidy is adjusted accordingly when you file your tax return.

Be careful about guessing your income when applying for health insurance. If you are estimating your income and guess low to get a larger tax credit, you’ll likely end up owing money once tax season comes around.

How to enroll in a state exchange plan

If you want to purchase insurance on a state-based health insurance exchange, the process is relatively simple.

Finding a plan and enrolling

When you go to the relevant state-based health insurance website, you’ll be asked to enter some person information to determine whether you qualify for a federally supported state-based health insurance plan. (Note: You can also go to Healthcare.gov, which will redirect you to your state’s marketplace.)

If you qualify, you’ll be presented with the health insurance plans you qualify for. You’ll see that the plans are divided into four categories. These categories represent how you and the insurer will divide medical costs:

• Bronze: You pay 40 percent; the insurer pays 60 percent.
• Silver: You pay 30 percent; the insurer pays 70 percent.
• Gold: You pay 20 percent; the insurer pays 80 percent.
• Platinum: You pay 10 percent; the insurer pays 90 percent.

Of course, the right category for you will depend on your own specific needs. You’ll be able to review the health insurance plans and what specific coverage options they offer before selecting one. And don’t worry if you find it confusing: Most marketplaces provide additional phone support in case you need extra assistance understanding the various options.

Required documentation and information

To enroll in a state exchange plan, you will need to provide several key pieces of documentation and information. These typically include:

1. Proof of Identity and Citizenship: Valid government-issued ID (like a driver’s license or passport) and proof of U.S. citizenship or lawful presence (such as a birth certificate or Green Card).
2. Social Security Number: For all family members applying for coverage.
3. Income Verification: Recent pay stubs, tax returns, or W-2 forms to verify your household income, which helps determine your eligibility for subsidies.
4. Current Health Insurance Information: Details about any health insurance coverage you or your family members currently have.
5. Home and Mailing Addresses: Especially if different, to ensure all correspondence reaches you.
6. Information on All Dependents: Including their ages and Social Security numbers, if they are to be covered under your plan.

Deadlines and important dates

Enrolling in a state exchange plan is time-sensitive, with specific deadlines that must be met:

1. Open Enrollment Period: Typically runs from November 1 to December 15 each year for coverage starting on January 1 of the following year. Some states may extend their enrollment periods.
2. Special Enrollment Periods (SEP): If you experience certain life events such as marriage, the birth of a child, or loss of other health coverage, you may qualify for a SEP which allows you to enroll outside the standard open enrollment period.
3. Payment Deadlines: After selecting a plan, ensure you pay the first premium by the due date provided to activate your coverage.

What to do if you don’t want state-based health insurance

You don’t have to use a government or state-based exchange for healthcare insurance. The biggest drawback of choosing a non-market plan is the loss of the benefits associated with those plans. However, depending on your specific situation, those benefits may not even apply to you or you may have a healthcare situation that doesn’t require them.

You can view a state exchange plan as just one option among many. You may even find it beneficial to mix and match the state or government plans with other supplemental coverage to round out your healthcare insurance policy.

At eHealth, you can search through plans from numerous providers sorted by state and even zip code. Use the site and the experts to figure out if state exchange plan insurance or any other type of