How the ACA Marketplace works
The Affordable Care Act created the Marketplace as one regulated place to shop for people who buy their own coverage, such as the self-employed, people between jobs and early retirees. Many states use HealthCare.gov and others run their own site, but the core rules are federal. To buy a plan you must live in the United States, be a citizen, national or lawfully present, and not be incarcerated, and you generally can’t buy one once you have Medicare.
One application for your household and expected income tells you whether you qualify for Medicaid or CHIP, which you can join at any time, or for the premium tax credit and cost-sharing reductions. Every plan comes from a private insurer, covers the same essential health benefits and covers pre-existing conditions from the first day.
Insurers may price a plan on only a few factors, which is why two neighbors can pay very different premiums for it.
- Age: an older adult can be charged up to 3 times what a younger one pays.
- Tobacco use: up to 50% more.
- Location: premiums differ widely by county.
- Who is covered: adding a spouse or children raises the premium.
- Never allowed: pricing by health, medical history or gender.
When you can enroll
There are two ways in. On HealthCare.gov, Open Enrollment for 2027 coverage runs from November 1, 2026 to January 15, 2027. Pick a plan by December 15 for coverage that starts January 1; a plan chosen from December 16 to January 15 starts February 1, once you pay the first premium. A state-run marketplace may set different dates.
Outside that window you need a Special Enrollment Period, opened by a life event such as marriage, a birth or adoption, a move, or losing other coverage. After losing job-based coverage you generally have 60 days before or after the loss to pick a plan.
The trap is COBRA. When COBRA runs out, you get a new 60-day window, but dropping it or no longer paying for it does not count, so leaving it midyear can mean waiting for the next Open Enrollment.
Metal tiers, catastrophic plans and out-of-pocket limits
Plans are grouped by how they split the cost of covered care with you on average, as the table below shows. The tier says nothing about the quality of care: it trades a lower premium for a higher deductible and copays, or the reverse.
Two details can change the choice. Cost-sharing reductions for lower-income households apply only to silver plans, where they lift the plan’s share of costs to 73%–96%. And all bronze and catastrophic plans now work with a health savings account, so a bronze buyer can set money aside pre-tax for the deductible.
Every Marketplace plan also caps what you pay in deductibles, copays and coinsurance for covered in-network care each year. For 2026 the limit is $10,600 for one person and $21,200 for a family, rising to $12,000 and $24,000 for 2027. Premiums, uncovered services and out-of-network care don’t count toward it.
Who gets help paying for a Marketplace plan
Help depends on household income, measured as a form of modified adjusted gross income and compared with the federal poverty level (FPL). For 2026 coverage the Marketplace uses the 2025 guidelines: $15,650 for one person and $21,150 for two in the 48 contiguous states. The larger credits of 2021–2025 have expired, so 2026 coverage follows the original ACA limits.
Two things rule out the credit whatever your income: an offer of affordable job-based coverage for yourself, and eligibility for Medicare.
- Under 100% of FPL: you probably won’t qualify for Marketplace savings, but you may qualify for Medicaid.
- Under 138%: in states that expanded Medicaid, you may qualify for Medicaid.
- 100%–400%: the premium tax credit, in every state, with cost-sharing reductions on silver plans at the lower end.
- Over 400%, or $62,600 for one person and $84,600 for two: no credit for 2026 coverage, so you pay the full price.
How to compare plans and avoid common mistakes
Compare what each plan could cost you in a year, not the premium alone. Twelve months of premiums after the credit, plus the plan’s out-of-pocket limit, is your cost in a bad year; in a quiet year you pay the premiums and a few copays, which is when a bronze plan tends to come out ahead. Then check that your doctors, hospitals and prescriptions are covered, because a cheap plan with the wrong network can cost more than it saves.
- Skipping silver when your income qualifies for cost-sharing reductions: they lower deductibles and copays, but only on silver plans.
- Guessing low on income: advance credits are settled on your tax return, and for 2026 any excess is repaid in full.
- Not reporting a raise, a move or a new household member during the year, each of which changes the credit.
- Missing December 15 when you want coverage from January 1, or dropping COBRA midyear and finding no window to enroll.
The Marketplace as a bridge to Medicare
For anyone who retires before 65, the Marketplace is usually the main alternative to COBRA or a spouse’s plan. Retiring ends job-based coverage, which opens the 60-day window, so you can choose a plan before your last day at work rather than wait for Open Enrollment.
Because help follows income, the way you pay for each year also sets the health insurance bill. Spending cash, or the cost basis of shares you sell, adds nothing to the income that counts, while traditional IRA withdrawals, Roth conversions and realized capital gains generally count in full.
At 65, Medicare takes over. Marketplace coverage doesn’t end by itself, so end it when Medicare starts, and sign up for Part B on time to avoid a penalty that lasts as long as you have Part B.
Illustrative numbers
How one credit prices three tiers: age 50, Smith County, Kansas, 2026
Household income, one person$50,000, or 319% of the poverty level
Benchmark silver premium (CRS)$1,053 a month
Expected contribution: 9.96% × $50,000 ÷ 12$415 a month
Premium tax credit: $1,053 − $415$638 a month
Bronze plan at an illustrative $820, after the credit$182 a month
Gold plan at an illustrative $1,290, after the credit$652 a month
The credit stays at $638 whichever tier this person picks, so bronze costs $233 a month less than the benchmark silver plan in exchange for a higher deductible, and gold costs $237 more for lower cost sharing. On any tier, the 2026 out-of-pocket limit for covered in-network care can’t exceed $10,600.
At a glance
Marketplace plan categories and how they share costs on average
| Category | Plan pays | You pay | Worth knowing |
|---|---|---|---|
| Bronze | 60% | 40% | Low premiums, high deductible; works with an HSA |
| Silver | 70% | 30% | Moderate deductible; the benchmark that sets the premium tax credit |
| Silver with cost-sharing reductions | 73%–96% | Less, depending on income | Low deductible; only for lower incomes who choose silver |
| Gold | 80% | 20% | Low deductible, higher premiums |
| Platinum | 90% | 10% | Low deductible, highest premiums |
| Catastrophic | Not a metal tier | Very high deductible | Under 30 or with a hardship or affordability exemption; works with an HSA |
Put it in your plan
ACA Marketplace in MoneyWhatIf
In MoneyWhatIf, switch on marketplace coverage in Health coverage and enter the benchmark monthly premium per person and your tax-family size; the form can suggest a state-based premium, which you must choose or replace. Coverage begins at the household’s last retirement and ends for each adult at 65, when the model starts Medicare, and the premium grows at plan inflation plus two points. Keep the same premium out of your healthcare spending card so it isn’t counted twice. Cost-sharing reductions and Medicaid are not modeled.
Common questions
ACA Marketplace FAQs
Is the ACA Marketplace the same as Obamacare?
In everyday use, yes. Obamacare is a nickname for the Affordable Care Act, and Obamacare plans usually means the individual plans sold through the Marketplace. What matters is where you buy: the premium tax credit applies only to coverage bought through the Marketplace, so the same kind of plan bought directly from an insurer costs the full price.
How much does a Marketplace plan cost?
It depends on your age, where you live and your income. Before any credit, the 2026 benchmark silver plan for a 50-year-old cost $541 a month in Anoka County, Minnesota, $1,053 in Smith County, Kansas and $1,785 in Monroe County, Florida, according to the Congressional Research Service; for a 27-year-old it ran from $317 to $1,048 across the same counties. With the premium tax credit, a household with income from 100% to 400% of the poverty level pays no more than 2.10%–9.96% of income for that benchmark plan.
Can I buy a Marketplace plan if an employer offers me coverage?
You can buy one, but you generally won’t get the premium tax credit if the offer is affordable and meets minimum value; for 2026, affordable means your share of self-only coverage costs no more than 9.96% of household income. Coverage from a former employer, such as COBRA or retiree coverage, is different: you can decline it and still qualify for the credit.
Can I keep a Marketplace plan after I turn 65?
Generally not once Medicare starts. It is against the law for someone who knows you have Medicare to sell you a Marketplace plan, and premium help ends. Marketplace coverage doesn’t stop automatically, so update your application up to 3 months ahead: if Medicare starts May 1, you can report it from February 1 and the Marketplace plan ends April 30.
Can an HSA pay Marketplace premiums?
Usually not. Money in a health savings account can pay insurance premiums only in a few cases, and one of them is health coverage while you are receiving unemployment compensation. Otherwise the HSA is for deductibles, copays and coinsurance, and enrolling in a bronze or catastrophic Marketplace plan generally lets you contribute to one.