The individual health insurance marketplace is highly competitive and offers consumers more choices than ever before. More than 21 million people - including working families, entrepreneurs, early retirees and guest workers - choose health insurance through the Marketplace. In fact, the Marketplace's affordable and stable options have helped a record number of Americans gain the health, safety and peace of mind that comes with quality, affordable insurance.
This growth is vital to the continued availability of quality and affordable individual market insurance in communities across the country because when more people participate in the market, risks are shared more efficiently and premiums will be lower and more stable for everyone.
Here's how the Marketplace program works for millions of Americans and how it can be strengthened in the future:
Availability, choice and competition
Americans who buy insurance through Marketplaces benefit from the wide selection made available through strong competition.
- Consumers on average are able to choose plans from at least six insurers, including plans tailored to specific health conditions, or plans with a $0 deductible, or plans that can be combined with health savings accounts.
- Coverage is available to low- and moderate-income families and individuals. Eight out of 10 consumers are eligible for premiums less than $10 per month after taxes.
- Expanded tax credits have helped more middle-income Americans and employees of small businesses get affordable insurance for themselves and their dependents.
Healthier communities, vendor stability and support for small businesses
Beyond the direct impact on more than 21 million people, affordable insurance in the individual market is vital to healthy communities and a stable health care system, as well as broader economic benefits in communities across the country.
Studies have consistently shown a link between having health insurance and improved health outcomes. Having comprehensive health insurance helps members see a primary care physician and access preventive services, treat pre-existing conditions, address gaps in care, and avoid emergency room visits.
A robust individual market can help reduce the amount of unpaid care provided by hospitals. Much of this spending is then offset by government spending, which means we all pay a hidden price when Americans are uninsured.
Affordable insurance in the marketplace also promotes entrepreneurship by allowing people to start a business with the confidence that they can get affordable coverage. These insurance options also support small businesses by providing access to quality health insurance to employees of small employers without employer-based insurance. In 2021, one in four Marketplace enrollees was self-employed or a small business owner.
Protecting consumers and taxpayers through accountability and transparency
Consumer protections and risk adjustment mechanisms ensure that Marketplace insurance is available to all Americans who may need it, including people with pre-existing conditions.
Federal "MLR" rules also require that at least 80 cents of every dollar of premium go directly to health care and quality improvement. If a health plan does not meet this threshold, the difference must be refunded to the consumer. The combination of a highly competitive marketplace and premium refund protection provides high value to consumers and taxpayers. In fact, in 2023, 84% of Marketplace premiums will go to health care only.
Providing insurance for the future
Even though significant progress has been made, the Marketplaces can be further strengthened to ensure that insurance coverage remains widely available to consumers well into the future. Here are some common-sense steps to ensure that the individual Marketplace continues to provide affordable insurance options for consumers and stability for the doctors and hospitals that serve them.
- Health insurers need continued flexibility to offer innovative and differentiated coverage options to meet the diverse needs of people in this growing market. Choice and competition work for consumers and should be nurtured.
- Current tax policies must be preserved so that millions of working families can keep their plans if they like them, and to protect providers from the financial instability that a sudden surge of uninsured patients would cause.