How are Marketplace Plans priced?
Marketplace Plan Pricing
Pricing for Marketplace Plans is really pretty simple. It's that way because it's the law. Depending on your situation, you could see a significant rate difference between you and someone else even though the coverages are exactly the same.
When you've only got 5 factors from which to price, any variance in those 5 factors could have a dramatic effect on the price. With private plans, carriers can use more factors so certain differences may not be that dramatic.
Here are the 5 factors insurance companies can consider when setting premiums:
Age: Premiums can be up to three times higher for older adults compared to younger individuals.
Location: Where you live significantly affects your premium due to variations in competition, local rules, and cost of living.
Tobacco Use: Tobacco users can be charged up to 50% more than non-users.
Individual vs. Family Enrollment: Plans covering a spouse or dependents typically have higher premiums than individual plans.
Plan Category: There are five categories—Bronze, Silver, Gold, Platinum, and Catastrophic—based on how costs are shared between you and the plan. Bronze plans usually have lower premiums but higher out-of-pocket costs, while Platinum plans have the highest premiums with the lowest out-of-pocket expenses.
States can also limit how much these factors influence premiums. All Marketplace plans cover the same essential health benefits, but insurers may offer additional benefits, which could impact costs.
Factors That Don’t Affect Premiums
Gender: Insurers cannot charge different premiums based on gender.
Health Status: Your medical history or pre-existing conditions won’t affect premiums. All plans must cover pre-existing conditions from the start of coverage.
