The healthcare exchange, officially called the Health Insurance Marketplace, is a government-run service where individuals, families, and small businesses can compare and buy health insurance plans. Created under the Affordable Care Act, it launched in 2014 to give people without employer-sponsored coverage a single place to shop for insurance and, in many cases, get financial help paying for it.
How the Marketplace Works
The exchange functions like a regulated shopping platform. Instead of calling individual insurance companies or navigating their websites separately, you go to one place, enter your household information and income, and see every plan available in your area side by side. You can compare what each plan covers, what it costs monthly, and how much you’d pay out of pocket when you actually use care. The system also automatically checks whether you qualify for subsidies that lower your costs.
Every plan sold on the exchange is required to cover the same set of 10 essential health benefits: outpatient care, emergency services, hospitalization, maternity and newborn care, mental health and substance use treatment, prescription drugs, rehabilitative services and devices, lab work, preventive care and chronic disease management, and pediatric services including dental and vision for children. This means you won’t find a marketplace plan that excludes, say, mental health coverage or maternity care.
The Four Plan Tiers
Marketplace plans are organized into four color-coded “metal” tiers based on how costs are split between you and the insurer. The percentage reflects the share of average medical costs the plan covers:
- Bronze: The plan covers about 60% of costs. You pay lower monthly premiums but higher out-of-pocket costs when you need care. This tier works best if you’re generally healthy and want protection against worst-case scenarios.
- Silver: Covers about 70% of costs. A middle-ground option, and the only tier that qualifies for extra out-of-pocket savings (more on that below).
- Gold: Covers about 80% of costs. Higher monthly premiums, but you pay less each time you visit a doctor or fill a prescription.
- Platinum: Covers about 90% of costs. The highest premiums but the lowest costs at the point of care. Best for people who use healthcare frequently.
The tier doesn’t affect what services are covered. A Bronze plan covers the same essential benefits as a Platinum plan. The difference is purely financial: how much you pay each month versus how much you pay when you actually get care.
Financial Help With Premiums
Most people who buy through the exchange don’t pay full price. The main form of assistance is the premium tax credit, which directly reduces your monthly bill. Eligibility is based on household income relative to the federal poverty level. Generally, households earning between 100% and 400% of the poverty level qualify. Through 2025, Congress expanded that threshold so people earning above 400% can also receive credits if their premiums would otherwise consume a large share of their income.
To put costs in perspective, the average unsubsidized benchmark Silver plan runs about $625 per month for a 40-year-old. With subsidies, many people pay significantly less. The credit is calculated based on that benchmark Silver plan in your area, so your actual savings depend on where you live and which plan you choose.
You can take the credit in advance, applied directly to your monthly premium so you never pay the full amount. Or you can claim it when you file your taxes. Most people choose the advance option because it makes coverage affordable month to month.
Extra Savings on Silver Plans
Beyond the premium credit, lower-income households can qualify for cost-sharing reductions that lower deductibles, copays, and coinsurance. There’s a catch: these savings only apply if you pick a Silver plan. If you qualify but choose a Bronze or Gold plan instead, you lose the extra savings entirely.
The amount you save scales with your income. The lower your income within the eligible range, the more generous the reductions. A Silver plan with strong cost-sharing reductions can effectively perform like a Gold or Platinum plan in terms of out-of-pocket costs, while still carrying a Silver-level premium (further reduced by the tax credit). This is why financial advisors often recommend Silver for people who qualify.
Who Can Use the Exchange
Eligibility is broad. You can enroll if you live in the United States, are a U.S. citizen or lawfully present noncitizen, and are not currently incarcerated. There’s no requirement to be employed or unemployed. People who have access to employer coverage can still use the marketplace, though they typically won’t qualify for subsidies unless their employer’s plan is considered unaffordable.
Residents of U.S. territories cannot use the marketplace unless they also qualify as residents of one of the 50 states or Washington, D.C.
State Exchanges vs. the Federal Platform
Not every state runs its own exchange. For plan year 2026, 21 states operate their own state-based exchanges, with their own websites and enrollment systems. Two additional states run their own exchanges but use the federal HealthCare.gov platform for enrollment. The remaining states rely entirely on the federally facilitated exchange at HealthCare.gov.
For you as a consumer, the experience is similar regardless of which type your state uses. The plans, subsidies, and rules are governed by the same federal law. The main differences are cosmetic: the website you visit, the customer service number you call, and sometimes slight variations in enrollment deadlines.
When You Can Enroll
The marketplace operates on an annual cycle. Open enrollment for 2026 coverage began on November 1, 2025. During this window, anyone eligible can sign up for a new plan or switch their existing one. Outside of open enrollment, you can only enroll or make changes if you experience a qualifying life event that triggers a special enrollment period.
Common qualifying events include:
- Losing existing coverage: Whether your employer plan ends, you age off a parent’s plan at 26, or you lose Medicaid, you generally get 60 days to enroll (90 days for Medicaid or CHIP loss).
- Household changes: Getting married, having or adopting a baby, or getting divorced and losing coverage all qualify. If you have a baby, coverage can start retroactively from the date of birth even if you enroll up to 60 days later.
- Moving: Relocating to a new ZIP code or county, moving to the U.S. from abroad, or moving for school or seasonal work opens a new enrollment window.
- Other life changes: Becoming a U.S. citizen, leaving incarceration, or being affected by a natural disaster can also trigger eligibility.
If you already have a marketplace plan and don’t make changes during open enrollment, your plan will typically auto-renew. It’s still worth logging in each year, because plan prices, networks, and available subsidies shift annually. A plan that was your best deal last year may not be this year.
What the Exchange Does Not Cover
The marketplace is specifically for individual and small-business health insurance. It doesn’t handle Medicare, Medicaid enrollment (though the application process may determine you’re eligible and redirect you), employer-sponsored group plans, or short-term health plans. Dental and vision coverage for adults are not required to be included in marketplace health plans, though many plans offer them and standalone dental plans are available on the exchange.