Obamacare vs. Off-Exchange plans
The one difference that matters most — and how to choose
The main difference between Obamacare plans and Off-Exchange plans is simple: only Obamacare plans are eligible for a subsidy tax credit to reduce your costs. Otherwise, plan design, coverage, and rates are similar, and both must follow federal regulations. Many plans are, in fact, available both ways.
Side by side
On the marketplace
Obamacare plans
- Subsidy-eligible. These plans can be reduced in cost with a subsidy (tax credit).
- Sold through exchanges. Offered via HealthCare.gov or a state exchange marketplace.
- Certified brokers, agents, and web brokers can help you enroll and apply for a subsidy.
- Available to everyone — you can buy at full price even if you don't qualify for a subsidy.
Outside the marketplace
Off-Exchange plans
- Not subsidy-eligible. The subsidy tax credit can't be applied to these plans.
- Sold off the exchange. Available directly from insurers or through a broker or agent.
- May offer additional options — including plans or carriers that have left the marketplace.
- Predate Obamacare; long used by people without access to a plan through work.
By law, a plan offered both on and off the exchange must be sold at the same price — and brokers and agents must sell at that same market price. The only cost difference is the subsidy, which applies to Obamacare plans only.
What is Obamacare?
Obamacare is a law, more formally the Patient Protection and Affordable Care Act (PPACA), or the Affordable Care Act (ACA) for short. Its main purpose was to increase the number of people with health insurance by making coverage more affordable in two main ways:
- Medicaid expansion. States have the option to expand Medicaid — a free or low-cost health insurance program administered at the state level — to more lower-income people.
- Subsidy tax credit. A subsidy is made available to lower the cost of plans in the market, calculated on a sliding scale based on income.
What is the Obamacare subsidy (tax credit)?
The Obamacare subsidy is a tax credit, formally the Advanced Premium Tax Credit (APTC). Instead of waiting until you file taxes, you can receive it "in advance" during the year to reduce the monthly premium of an Obamacare plan.
You must complete an official federal government application to learn your amount, and everyone's is different. The calculation can be complex, but household income is the main factor. Our tool can help you estimate it.
Who is eligible for a subsidy? To qualify to reduce the monthly premium of an Obamacare plan, you generally must:
• Meet income requirements based on household size and income (for example, less than about $48,240 for an individual or $98,400 for a family of four) · Not be eligible for other government-sponsored coverage like Medicare or Medicaid · Not have access to a qualifying, affordable employer plan · File taxes (married couples must file jointly) · Not be incarcerated · Be legally present in the United States.
Why consider Off-Exchange plans?
- More options. If you're not eligible for a subsidy — or only a small one — Off-Exchange plans may still be an affordable choice with additional options.
- Your doctor's network. Your preferred doctor may only accept a plan available Off-Exchange. We provide links to official provider directories so you can check.
- Carrier availability. Some insurers have left the Obamacare market but still offer Off-Exchange plans, so your preferred company may still be an option.
Quick answers
Can a plan be both an Obamacare and an Off-Exchange plan?
Yes. A plan can be available both ways. Some plans are only offered as Obamacare plans, while others are only offered Off-Exchange.
Do plans offered both ways cost the same?
Yes. By law, a plan offered as both an Obamacare and an Off-Exchange plan must be sold at the same price, and brokers and agents must sell at that same market price. Keep in mind only Obamacare plans are eligible for a subsidy.
Who is eligible for these plans?
Technically everyone is eligible for both Obamacare and Off-Exchange plans. The real question is who is eligible for a subsidy tax credit, which can only reduce the cost of Obamacare plans. Even without a subsidy, you can still buy an Obamacare plan at full price.
How do I choose the plan that's best for me?
Understand a few concepts first — premium price, out-of-pocket costs, deductibles, and metal levels. Our choosing a plan FAQ walks through each one.
Health Plan Radar is owned and operated by Amabo LLC and is not affiliated with the federal marketplace HealthCare.gov or state-based marketplaces. For official information, visit HealthCare.gov. Off-Marketplace coverage is not eligible for the cost savings offered through the Marketplaces.