Know the real distinction — and which option puts more money back in your pocket.
When shopping for individual health insurance, you'll encounter two primary channels: the ACA marketplace (also called the exchange) and private or "off-exchange" insurance purchased directly from insurers. The terminology can be confusing because technically, marketplace plans are also privately provided. The critical difference comes down to one thing: subsidy eligibility. Understanding this distinction can save you thousands of dollars per year.
Marketplace health insurance refers to plans sold through the ACA exchange — either HealthCare.gov (used by most states) or a state-run exchange such as Covered California, NY State of Health, or GetCoveredNJ. These plans are offered by private insurance companies but sold through the government-operated marketplace platform.
Key features of marketplace plans:
In 2026, approximately 24 million Americans are enrolled in marketplace plans. The vast majority receive some form of financial assistance — making the marketplace the most cost-effective channel for most individuals who don't have employer-sponsored coverage.
Private or off-exchange insurance is purchased directly from an insurance company or through a broker, outside of the ACA exchange. The plans still must follow most ACA rules (pre-existing condition protections, essential health benefits, etc.) if they are ACA-compliant individual plans — but they are not eligible for premium tax credits or cost-sharing reductions.
Off-exchange plans include:
This is the central question that determines whether the marketplace is worth it for you. In 2026, there are two types of subsidies:
Premium tax credits reduce your monthly premium. You qualify if:
There is no upper income ceiling. A single person earning $75,000 in a high-premium state may still qualify for credits. Use the KFF Marketplace Calculator to estimate your specific credit.
CSR subsidies lower your deductible, copays, and out-of-pocket maximum. They apply only to Silver-tier plans and only if your household income is between 100% and 250% of the federal poverty level. At the highest CSR tier (income under 150% FPL), your deductible can drop to $0–$500 and out-of-pocket maximum to around $1,200 for an individual.
| Factor | Marketplace Plans | Private (Off-Exchange) Plans |
|---|---|---|
| Subsidy eligibility | Yes — premium tax credits + CSR | No subsidies available |
| Pre-existing condition protections | Yes | Yes (ACA-compliant plans) |
| Essential health benefits | Required | Required (ACA-compliant) |
| Plan variety | Limited to exchange offerings | Wider selection; some unique plans |
| Network options | Varies by insurer on exchange | May include plans not on exchange |
| Enrollment windows | Open Enrollment + SEP | Year-round (for ACA-compliant plans) |
| Best for | Anyone eligible for subsidies | High earners, those needing specific networks |
Off-exchange plans are the right choice in a limited set of circumstances:
If your income is just over the 8.5% benchmark threshold, the subsidy savings may be minimal. In that case, comparing off-exchange plans — which sometimes have different network configurations or plan designs — may be worthwhile. But run the numbers first; the marketplace should usually be your first stop.
Occasionally, an insurer offers a broader network or a specific hospital affiliation only through their off-exchange products. If a particular doctor, hospital, or specialist is critical to your care and only in-network on an off-exchange plan, that may justify the additional cost.
ACA-compliant off-exchange plans can be purchased any time of year, unlike marketplace plans (which require a qualifying SEP outside of Open Enrollment). However, if you've had a qualifying life event, you likely qualify for a marketplace SEP as well. Check our SEP guide before defaulting to off-exchange.
For more context on plan costs, see how much health insurance costs in 2026. If you're self-employed and weighing your options, our self-employed health insurance guide covers this decision in more detail.
See plans, prices, and subsidy estimates for your specific situation — in under 2 minutes.
Get Your Free Quote NowMarketplace plans are sold through the ACA exchange and are eligible for premium tax credits and cost-sharing reductions. Private (off-exchange) plans are purchased directly from insurers and are not eligible for subsidies. Both types follow most of the same ACA rules if they are ACA-compliant individual plans.
No. Premium tax credits and cost-sharing reductions are only available through the official ACA marketplace. Identical plans purchased off-exchange do not qualify for subsidies.
Yes — for people who don't qualify for subsidies and need a specific network or plan design not offered on the exchange. But for anyone who qualifies for premium tax credits, the marketplace almost always provides better value.
Anyone whose cost of the benchmark Silver plan exceeds 8.5% of household income qualifies for a premium tax credit in 2026. There is no upper income ceiling. Household income must generally be above 100% FPL, and you must not have access to affordable employer-sponsored coverage.