On-exchange vs. off-exchange: 3 ways health plans differ


As the Affordable Care Act’s 2017 open enrollment period nears, off-exchange plans have become the subject of increased focus, even though less is known about them than their on-exchange counterparts.

New data from the Robert Wood Johnson Foundation sheds a little more light on these products, which are ACA-compliant but not eligible for subsidies. Understanding how the two markets compare can provide vital insights for how the individual and small-group markets as a whole could function better, Katherine Hempstead, who directs RWJF’s work on health insurance coverage, writes in a post for the Health Affairs Blog.

Hempstead highlights some key insights from the HIX Compare data for 2016:

Premiums and deductibles: The average unsubsidized on-exchange silver premium was $279 per month, versus $314 for off-exchange products. The average off-exchange silver products had a deductible of a little more than $3,273, versus an average of $2,053 for on-exchange plans. Deductibles for on- and off-exchange small-group plans were generally lower than off-exchange individual plans, but higher than on-exchange individual plans. Small-group plan premiums were the highest of all three categories, with an average of $347.

Provider networks: More than 50 percent of off-exchange products were “open” plans such as preferred-provider organization or point-of-service plans, while only 36 percent of products sold on the exchange were PPO or POS plans. Indeed, narrow-network plans have become increasingly common among ACA exchange products, according to a previous study from the Blue Cross Blue Shield Association. And another analysis predicts that trend will continue in 2017. For off-exchange plans, PPOs were more common at lower metal levels, but the opposite was true for on-exchange plans. For small-group plans, nearly 65 percent were either PPO or POS.

Metal levels: About 65 percent of on-exchange products were categorized as silver, while off-exchange products were half as likely to be silver. For the other levels, 12 percent of on-exchange products were gold or platinum and 17 percent were catastrophic or bronze, compared to 25 percent and 38 percent, respectively, for off-exchange products. Meanwhile, more than 40 percent of small-group plans were at the gold or platinum level.