Choosing between ACA Marketplace insurance and private health insurance can save you thousands of dollars each year. The right choice depends on your income, health needs, and whether you qualify for financial help. In 2025, individual market insurance premiums average $540 per member per month, but your actual costs vary significantly based on which option you choose.
What Is ACA Marketplace Insurance?
ACA Marketplace plans are listed on a government-run exchange and offer the opportunity for individuals to apply for tax subsidies if they qualify for financial help. You access these plans through HealthCare.gov or your state’s health insurance exchange. The marketplace was created under the Affordable Care Act to give people without employer coverage a place to compare and buy health insurance.
These government exchanges give you access to bronze, silver, gold, and platinum plans from different insurance companies. All marketplace plans cover essential health benefits including doctor visits, hospital stays, prescription drugs, mental health services, and preventive care.
The biggest advantage? If you qualify based on your income, you can get premium tax credits that lower your monthly payments. Some people pay as little as $10 per month after subsidies.
What Is Private Health Insurance?
Private health insurance plans are sold directly by health insurance companies, agents, or through an online website. You buy these plans off-exchange, meaning outside the government marketplace. You can purchase them through insurance brokers, company websites, or independent agents.
Private plans come in two types: ACA-compliant plans that meet all federal requirements, and non-ACA plans like short-term medical insurance. Most private individual plans sold today are ACA-compliant, which means they cover the same essential health benefits as marketplace plans.
The key difference? These plans don’t qualify for health insurance subsidies like premium tax credits. You pay the full premium without government assistance.
ACA Marketplace vs Private Health Insurance: Side-by-Side Comparison
| Feature | ACA Marketplace Plans | Private Health Insurance |
|---|---|---|
| Purchase Location | HealthCare.gov or state exchange | Insurance company or broker |
| Premium Subsidies | Available if you qualify | Not available |
| Cost-Sharing Reductions | Available on silver plans | Not available |
| Coverage Standards | Must cover 10 essential health benefits | ACA-compliant plans cover same benefits |
| Pre-existing Conditions | Always covered | Covered on ACA-compliant plans only |
| Provider Networks | Often smaller networks | May offer broader networks |
| Plan Variety | Limited to metal tier plans | More plan options available |
| Average Monthly Premium (2025) | $540 before subsidies | Similar pricing for comparable plans |
How Much Does Each Option Cost in 2025?
In 2025, ACA individual market plans have a $2,789 annual deductible which is higher than the average deductible for a worker with employer-sponsored coverage. But remember—your actual costs depend heavily on subsidies.
Marketplace Plan Costs
If you qualify for premium tax credits, your costs drop dramatically. To receive the premium tax credit for coverage starting in 2025, a Marketplace enrollee must have a household income at least equal to the Federal Poverty Level and not have access to affordable employer coverage.
For 2025, someone earning $35,000 per year might pay only $100-$200 monthly after subsidies for a silver plan. Without subsidies, that same plan costs $400-$500 per month.
Private Insurance Costs
Federal regulations require ACA-compliant plans through private exchanges to be around the same price as they would be on the public exchange. However, some off-exchange silver plans cost less than on-exchange versions due to how insurers price cost-sharing reductions.
If you don’t qualify for subsidies, shopping off-exchange sometimes gives you better rates, especially for silver plans. The result is lower-cost off-exchange Silver plan rates, compared with the on-exchange Silver plan rates, for people who don’t qualify for premium subsidies.
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Do You Qualify for Marketplace Subsidies?
This is the make-or-break question. Premium tax credits are available for people who meet these requirements:
- Your household income falls between 100% and 400% of the federal poverty level (though the cap is temporarily removed through 2025)
- You don’t have access to affordable employer coverage
- You’re not eligible for Medicare, Medicaid, or CHIP
- You’re a U.S. citizen or lawfully present non-citizen
For a single person in 2025, this means earning roughly $15,650 to $62,600 per year. A family of four qualifies with income between $32,200 and $128,800.
Many people don’t realize they qualify. In October 2016, HHS estimated that there were 2.5 million people with off-exchange coverage who would be eligible for subsidies if they switched to the exchange. That number likely increased with enhanced subsidies.
Coverage Quality: Which Plans Offer Better Benefits?
Both marketplace and private ACA-compliant plans must cover 10 essential health benefits:
- Emergency services
- Hospitalization
- Prescription drugs
- Maternity and newborn care
- Mental health and substance use treatment
- Preventive care and wellness services
- Pediatric services including dental and vision
- Laboratory services
- Rehabilitation services
- Ambulatory patient services
The coverage is identical. The real differences come down to provider networks and plan variety.
Provider Networks
Many on-exchange marketplace insurance plans have smaller doctor networks. This keeps costs down but limits your choice of doctors and hospitals. Always check if your preferred providers are in-network before buying any plan.
Private insurance sometimes offers access to broader networks, but this varies by insurance company and region. Don’t assume private means better networks—always verify.
Plan Options
Unlike public exchanges, which only allow you to shop for ACA-compliant medical plans, private exchanges offer a wider variety of plan choices. This includes catastrophic plans for young adults and plans with different network structures.
When Should You Choose Marketplace Insurance?
Go with marketplace insurance if:
You qualify for premium tax credits. This is the biggest reason. Even modest subsidies save you thousands per year. A $300 monthly subsidy equals $3,600 in annual savings.
You need cost-sharing reductions. If your income is between 100% and 250% of poverty level, silver marketplace plans offer reduced deductibles and copays. The average annual deductible under a CSR 87 silver plan was about $700 compared to nearly $5,000 for regular silver plans.
You want straightforward comparison shopping. The marketplace makes it easy to compare plans side-by-side with standardized information.
You’re between jobs or self-employed. The marketplace fills the gap when you don’t have employer coverage.
When Should You Choose Private Health Insurance?
Choose private insurance if:
You don’t qualify for subsidies. Without financial assistance, you might find better deals off-exchange. Off-exchange health insurance plans are seeing smaller rate increases for 2026, which can make them more affordable.
You need a broader provider network. If your doctors aren’t in marketplace networks, private plans might give you more options.
You want more plan choices. Private exchanges often have more variety in plan designs and coverage options beyond the standard metal tiers.
You’re getting help from a broker. Working with an experienced insurance agent can help you navigate private plans and find options that fit your specific needs.
What About Short-Term Health Insurance?
Short-term medical plans are a type of private insurance that doesn’t follow ACA rules. Most short-term medical plans cost $60–$250 per month, depending on age, deductible, and state. They’re much cheaper but come with major limitations.
These plans can deny coverage for pre-existing conditions, don’t cover essential health benefits, and are designed for temporary gaps in coverage. They’re not a long-term solution and won’t protect you the way ACA-compliant plans do.
How to Make Your Decision
Follow these steps to choose the right option:
1. Check if you qualify for subsidies. Go to HealthCare.gov and enter your income information. The calculator shows your estimated tax credits immediately.
2. Compare total costs, not just premiums. Look at deductibles, copays, and out-of-pocket maximums. A plan with a $50 lower monthly premium but a $2,000 higher deductible isn’t actually cheaper.
3. Verify your doctors are in-network. Call your doctor’s office and ask which plans they accept. This matters more than anything else if you have ongoing health needs.
4. Calculate your expected healthcare usage. If you take regular medications or have planned surgeries, a gold or platinum plan with higher premiums but lower copays might save you money overall.
5. Consider working with a broker. Licensed insurance agents can help you compare both marketplace and private options at no cost to you. They’re paid by insurance companies, not by you.
Understanding Open Enrollment Periods
The primary time to enroll in on-exchange and off-exchange health insurance plans is during the annual Open Enrollment Period, which generally starts November 1 and ends January 15.
Outside this window, you need a qualifying life event to enroll, such as:
- Losing other health coverage
- Getting married or divorced
- Having or adopting a baby
- Moving to a new state
Both marketplace and private plans follow these same enrollment rules.
What’s Changing for 2026?
Insurance costs are rising across the board. Healthcare expenses continue climbing due to increasing prescription drug prices, higher hospital costs, and greater use of expensive treatments.
Individual health insurance premiums are set to increase in 2026, with the projected rise particularly steep due to federal policy changes and increasing healthcare costs.
The enhanced premium tax credits that made marketplace plans more affordable may expire at the end of 2025. If Congress doesn’t extend them, subsidies will be smaller and fewer people will qualify. This could make private insurance more competitive for middle-income families.
The Bottom Line: Which One Should You Choose?
For most people, the answer is simple: if you qualify for marketplace subsidies, use them. The financial assistance is too valuable to pass up.
If you don’t qualify for help, compare both options carefully. Look at identical coverage levels—compare a marketplace silver plan to a private silver plan, for example. Check provider networks, calculate total costs including deductibles, and verify your doctors participate.
Your health insurance decision affects your finances and your access to care. Take time to understand both options, use online calculators to estimate costs, and don’t hesitate to ask for help from licensed brokers or marketplace navigators.
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Frequently Asked Questions
Can I switch from marketplace to private insurance mid-year?
Generally, no. You can only switch during open enrollment or if you have a qualifying life event. However, if you’re on a marketplace plan and your income changes significantly, you should report it immediately as your subsidy amount might change.
Are private health insurance plans worse than marketplace plans?
Not necessarily. ACA-compliant private plans offer the same coverage as marketplace plans. The main difference is you can’t use premium tax credits or cost-sharing reductions with private plans, which makes them more expensive if you qualify for subsidies.
How do I know if my income qualifies me for subsidies?
Use the calculator at HealthCare.gov. You’ll need to estimate your total household income for the year. This includes wages, self-employment income, Social Security benefits, and investment income. If your income is between 100% and 400% of the federal poverty level, you likely qualify.
Can I buy both marketplace and private insurance?
You can only have one individual health insurance plan at a time as your primary coverage. Having two plans doesn’t make sense financially because you’re paying double premiums but can only use benefits from one plan for any given medical service.
What happens if I earn too much for marketplace subsidies but can’t afford private insurance?
You can still buy marketplace insurance without subsidies, or you can shop for private plans to find the best rate. Some people choose high-deductible health plans paired with Health Savings Accounts to reduce costs. If costs are truly unaffordable, some states offer additional assistance programs beyond federal subsidies.
