Health insurance through the Marketplace is private coverage you buy on an online exchange created by the Affordable Care Act, where plans from different insurers are laid out in a standard format so you can compare premiums and benefits side by side. The federal government runs the exchange at HealthCare.gov for most states, and some states operate their own. Depending on your income, you may qualify for a tax credit that lowers your monthly premium or extra help that cuts your costs when you actually use care.
How the Marketplace Works
The Affordable Care Act directed each state to set up an exchange where insurers sell health plans to individuals and families who need their own coverage.1Office of the Law Revision Counsel. 42 USC 18031 – Affordable Choices of Health Benefit Plans Most states use the federal platform at HealthCare.gov. A smaller group runs independent exchanges with their own websites and, sometimes, their own deadlines.
Every insurer selling on the exchange has to meet certification standards and present plan details the same way. You can pull up several plans from different companies and compare monthly premiums, deductibles, copays, and covered services without bouncing between insurer websites. The same application also tells you, in real time, whether you qualify for financial help.
Who Can Enroll
To buy a Marketplace plan, you need to live in the United States and be a U.S. citizen, U.S. national, or someone who is lawfully present.2HealthCare.gov. Are You Eligible to Use the Marketplace? The application asks for a Social Security number if you’re a citizen, or your immigration documents if your eligibility rests on immigration status, and the exchange verifies that information against federal records.
A wide range of statuses qualifies: green card holders, refugees, asylees, work and student visa holders, and people with Temporary Protected Status, among others. One notable exclusion is DACA recipients, who lost Marketplace eligibility in late 2025 and can no longer enroll.3HealthCare.gov. Immigration Status to Qualify for the Marketplace
Two other groups are shut out. If you’re serving a sentence in jail or prison, you cannot buy a Marketplace plan, though people awaiting trial who haven’t been sentenced can still enroll.4HealthCare.gov. Health Coverage for Incarcerated People If you already have Medicare, it is actually illegal for anyone to sell you a Marketplace plan, and that holds true even if you only have Part A or Part B.5Medicare.gov. Medicare and the Health Insurance Marketplace
What Every Plan Must Cover
Federal law requires every Marketplace plan to cover ten categories of essential health benefits, regardless of the metal tier or how low the premium is.6Office of the Law Revision Counsel. 42 USC 18022 – Essential Health Benefits Requirements Those categories are:
- Outpatient care, meaning doctor visits and services you receive without being admitted
- Emergency services, including at out-of-network hospitals
- Hospitalization, including inpatient stays and surgeries
- Maternity and newborn care
- Mental health and substance use treatment
- Prescription drugs
- Rehabilitative and habilitative services, like physical therapy or help developing skills limited by a chronic condition
- Lab tests, imaging, and diagnostic screenings
- Preventive and wellness services, including vaccinations and chronic disease management
- Pediatric services, including dental and vision care for children
That last category is where a common misunderstanding comes up. Federal rules require dental and vision coverage for children, not for adults.7Centers for Medicare & Medicaid Services. Information on Essential Health Benefits Benchmark Plans Adult dental and vision are explicitly excluded from the essential benefits package. Some plans offer them as extras, and standalone dental plans are sold on the exchange, but no insurer is required to cover your eye exam or teeth cleaning once you turn 19.
Plan Tiers and Catastrophic Coverage
Marketplace plans are sorted into four metal tiers based on how costs split between you and the insurer.8HealthCare.gov. Health Plan Categories: Bronze, Silver, Gold and Platinum The percentages below describe what the plan covers for a typical group of enrollees, not what you personally will pay in a given year.
- Bronze plans pay about 60% of costs and you pay 40%. Premiums are the lowest, deductibles the highest.
- Silver plans pay about 70% and you pay 30%. This is the only tier where Cost-Sharing Reductions apply if you qualify.
- Gold plans pay about 80% and you pay 20%. Deductibles are lower, costs more predictable.
- Platinum plans pay about 90% and you pay 10%. Highest premiums, lowest costs when you actually use care.
Whichever tier you choose, federal law caps your out-of-pocket spending for the year. For 2026, the cap is $10,600 for an individual and $21,200 for a family. Once your deductibles, copays, and coinsurance reach that ceiling, the plan covers everything else at 100% for the rest of the year.
A fifth option sits outside the metal tiers. Catastrophic plans carry the lowest premiums on the exchange but come with a deductible equal to the full out-of-pocket maximum ($10,600 for an individual in 2026), so you pay for nearly all routine care yourself.9HealthCare.gov. Catastrophic Health Plans You still get three primary care visits per year before meeting the deductible, plus free preventive services. These plans are available if you’re under 30. If you’re 30 or older, you can enroll only through a hardship or affordability exemption. Starting in 2026, the affordability exemption expanded: if your income is too high to receive premium tax credits, you automatically qualify for a catastrophic plan where one is offered in your area.
Financial Help Based on Income
The Marketplace uses your Modified Adjusted Gross Income (MAGI) and household size to determine whether you qualify for two kinds of help: the Premium Tax Credit and Cost-Sharing Reductions.10HealthCare.gov. What’s Included as Income MAGI is your adjusted gross income plus any untaxed foreign income, non-taxable Social Security benefits, and tax-exempt interest. Your “household” for this purpose is the tax filer, their spouse, and any tax dependents.
Premium Tax Credit
The Premium Tax Credit directly reduces your monthly premium. Under the baseline rules in federal law, you qualify if your household income falls between 100% and 400% of the Federal Poverty Level.11Internal Revenue Service. Eligibility for the Premium Tax Credit For a single person in 2026, 400% of the FPL is roughly $62,000; for a family of four, around $127,000. The credit slides: the lower your income, the less you’re expected to pay toward a benchmark Silver plan, and the larger your credit.12Office of the Law Revision Counsel. 26 USC 36B – Refundable Credit for Coverage Under a Qualified Health Plan
One caveat matters for 2026. The enhanced premium tax credits from the Inflation Reduction Act, which eliminated the 400% FPL income cap and made credits more generous at every income level, expired on December 31, 2025. The House passed legislation in January 2026 to extend them for three more years, but as of this writing the bill still needs Senate passage and the President’s signature. If the extension becomes law, people earning above 400% FPL would again qualify for help, and credits below that threshold would be larger than the baseline statute provides. Check HealthCare.gov for the current status before you enroll.
You can take the credit two ways. Most people apply it in advance so their monthly premium drops immediately. You can also pay full price each month and claim the entire credit as a lump sum when you file your federal tax return.
Cost-Sharing Reductions
Cost-Sharing Reductions lower your deductibles, copays, and out-of-pocket maximum. They only apply if you pick a Silver-tier plan, and only if your household earns between 100% and 250% of the FPL. The exchange automatically upgrades your Silver plan to a more generous version at no extra premium. The lower your income within that range, the greater the reduction: for households between 100% and 200% FPL, the out-of-pocket maximum for 2026 drops to roughly $3,500 compared to the standard $10,600.
If You Have Access to Health Insurance at Work
Having access to coverage through a job doesn’t automatically disqualify you from the Marketplace, but it usually disqualifies you from financial help. You can receive premium tax credits only if your employer’s plan fails one of two tests.13Internal Revenue Service. Minimum Value and Affordability
- Affordability: if your share of the premium for the cheapest plan your employer offers exceeds 9.96% of household income for plan years beginning in 2026, the coverage is considered unaffordable and you become eligible for Marketplace subsidies.14Internal Revenue Service. Revenue Procedure 2025-25
- Minimum value: if the employer’s plan covers less than 60% of expected medical costs, it fails the standard and you can seek subsidized Marketplace coverage instead.
Here is where people make a costly mistake. If your employer’s plan is technically unaffordable or fails minimum value, but you enroll in it anyway, you lose eligibility for Marketplace tax credits. You have to actually decline the employer plan and enroll through the exchange to receive the subsidy.
When You Can Sign Up
The main window to enroll or switch plans runs from November 1 through January 15 each year.15HealthCare.gov. When Can You Get Health Insurance? Enroll by mid-December and coverage typically starts January 1. Enroll between mid-December and January 15 and coverage starts February 1. States that run their own exchanges sometimes set different deadlines, so check your state’s exchange if you don’t use HealthCare.gov.
Outside open enrollment, you can only enroll or change plans if you have a qualifying life event. Common ones include losing other health coverage, getting married, having a baby, adopting a child, or moving to a new area where different plans are available.16HealthCare.gov. Getting Health Coverage Outside Open Enrollment Most events give you 60 days from the date of the event to pick a plan, and the exchange may ask for documents verifying what happened.
Settling Up at Tax Time
If you received advance premium tax credits during the year, you must file IRS Form 8962 with your federal tax return to reconcile the advance payments against the credit you actually earned based on your final income.17Internal Revenue Service. Instructions for Form 8962 – Premium Tax Credit The exchange sends you Form 1095-A early in the year showing how much was paid on your behalf each month.
If your actual income came in lower than you estimated, your credit is larger than what was advanced and you get the difference back. If your income was higher than projected, you owe money back. For 2026 tax returns, there is no cap on repayment: you must pay back every dollar of excess advance credit.18Internal Revenue Service. Updates to Questions and Answers About the Premium Tax Credit This changes earlier rules that limited repayment based on income. Report your income as accurately as you can when you apply, and update your estimate on HealthCare.gov if it changes mid-year. A $3,000 or $4,000 surprise at tax time is an easy mistake to avoid.
State Coverage Mandates
The federal penalty for going uninsured dropped to $0 in 2019, but a handful of states and the District of Columbia still enforce their own mandates. Penalties are typically the greater of a flat dollar amount per adult or a percentage of household income, and they can add up to several hundred dollars or more. If you live in a state with its own mandate, going without minimum essential coverage, including a Marketplace plan, could still cost you at filing time.