The short answer: if you get no subsidy, or only a small one, and you can pass a private plan's health questions, a private plan is often the better buy. The full price is often lower, many are nationwide PPOs that travel with you, and you are not betting your premium on a guess about next year's income.
"Marketplace plans are by far the most expensive plans when paid at full price. If you do not get government subsidies, or just get a small amount, and you are healthy enough to get a private plan, then getting a private plan is almost always the best answer."
Ashley Mallam, from what she sees quoting both side by side
Why full price changes everything
A Marketplace plan is priced with the subsidy in mind. When the subsidy is large, it does the heavy lifting. When it is small or zero, you pay the full sticker price, and for a healthy applicant a private plan's full price is often lower than an unsubsidized Marketplace plan.
What you get with a private plan
- Doctors where you are. Many private plans are nationwide PPOs: see doctors across state lines, no referrals. Others are EPOs. Many Marketplace plans are HMO or EPO, local to your county.
- It travels with you. A private plan goes with you when you move or work in another state. A Marketplace plan is tied to the state Marketplace you enrolled through.
- Any month. Private plans enroll year-round. You do not have to wait for Open Enrollment or a life event.
- Lower out-of-pocket designs. Options with lower deductibles, copay-based visits or first-day benefits, where Bronze and Silver Marketplace deductibles can run several thousand dollars.
The crystal ball problem
Here is the part nobody explains at sign-up. Marketplace savings are set from your estimate of what your household will earn in the coming year. In November you are guessing about next December, and you will not know whether you guessed right until you file taxes the spring after. That is a year and a half of crystal ball.
For a salaried employee that guess is easy. For a small business owner, a realtor, a contractor or anyone on commission, it is not. A good year is exactly what you are working toward, and HealthCare.gov is plain about what happens if it comes true: if your income ends up higher than you told the Marketplace, you pay the difference back with your federal taxes. How much depends on your situation, and that is worth asking your tax preparer.
Picture it. You sign up in November with a modest income estimate because last year was slow. Then business picks up: two big jobs land in the spring, referrals roll in, and by fall you are having your best year yet. You celebrate. Then tax season arrives, and part of the help you received all year comes back as a bill. Your best year ends with a surprise you never budgeted for.
A private plan has no subsidy, so there is nothing to pay back. The price you sign up for is the price you pay, whatever kind of year you have.
What it does, and what it does not
- What it does: often lowers the real monthly cost for healthy people who get little or no subsidy, with broader networks and no income guessing.
- What it does not: it does not suit everyone. Private plans ask health questions and approval is the carrier's decision. Some private plans are limited medical, which is not the same as major medical, and we will always tell you which side of that line a plan sits on.
When the Marketplace is still the right call
If your income qualifies for a large subsidy, the Marketplace can be hard to beat, and we will tell you so. If a health condition means a private plan will not accept you, the Marketplace is there for you. The point is to compare both at full honesty, not to assume either one.
How to find out which wins for you
- Check what your subsidy would actually be. If it is zero or small, read on.
- Price a private plan for your age and ZIP in the Plan Finder.
- Or have us run both side by side. We do not push one carrier, and if the Marketplace wins, that is what you will hear.
Self-employed? Our self-employed page walks all three paths, including a small group plan if you have even one employee.
This is general education, not tax advice and not a guarantee of coverage or savings. Pricing, eligibility and networks depend on your location and underwriting.