Three years after the creation of the Affordable Care Act insurance marketplace, which was designed to make buying health plans easier and cheaper, millions of Americans still opt to buy individual health plans directly from insurers, rather than through Healthcare.gov.

Why do so many individual buyers still do it the old fashioned way?

Research published in Health Affairs by the Robert Wood Johnson Foundation suggests the mix of individual plans available on the marketplace and outside of it differ greatly and therefore appeal to different types of customers.

Most marketplace plans are aimed at customers seeking cheap, high-deductible coverage.

Two-thirds are silver-level policies that cover 70 percent of medical expenses, while bronze packages, which cover 60 percent of expenses, make up 16 percent of the pool and gold and platinum packages — which cover 80 and 90 percent of expenses, respectively — comprise just 12 percent.

Off-market buyers generally prefer the higher-level plans. Twenty-five percent have gold or platinum plans and the remaining customers are split evenly between silver and bronze packages.

Buying outside the marketplace might make more sense for wealthy buyers who don’t qualify for subsidies as well as for those with certain medical conditions that demand access to certain specialists.

Katherine Hempstead, director of health insurance research at the Robert Wood Johnson Foundation, explains in an interview with Kaiser Health News: “Off-exchange plans may offer out-of-network benefits and other features that are more useful to people.”

Indeed, one of the major knocks against the ACA has been that many of the marketplace plans provide extremely narrow networks that leave many beneficiaries struggling to find in-network physicians and specialists.

There is strong evidence, however, that many who purchase plans outside of the exchange would be eligible for subsidies if they bought plans through the marketplace. Recently-released federal data estimates 2.5 million people paying full price outside the market could qualify for subsidies.

It is not clear whether it would be a good thing for the ACA if all of those people signed up for plans on the marketplace, which is desperate to add young, healthy enrollees.

Instant Insights /

Why do people buy individual plans outside of the ACA marketplace?

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