Individual Health Insurance – Question re benefit of purchasing on-exchange vs. off-exchange

Archived From: Finance
  • Page :
  • 1
  • Text Only
Voting History
Looking for advice regarding on and off-exchange health insurance.  From what I understand, an individual in California who will be paying for their own insurance plan has two options: 

(1) Purchase a plan through Covered California, the state government-run health exchange.  From the 2017 Preliminary Rates  (proposed however still subject to public regulatory review) booklet here: it looks as if the plan I am looking at will increase in 2017 a little over 20% from the 2016 rate schedule

(2) Buy a private plan through an insurance agent or a health plan directly outside of the exchange.  I have been told some insurers no longer offer individual full-network plans in Southern California so choice of insurance companies appears to be very limited now.    

My questions are:

(1) Are the premiums for both (1) and (2) above typically the same in California assuming the same insurer and the same metal level?  In this case, the carrier being considered will most likely be Blue Shield

(2) Is the only benefit of choosing the government run program is when one’s income is low enough to qualify for a government funded premium subsidy?

(3) Anyone have any personal experience as to whether Blue Shield’s available physician / hospital facility / medical groups are the same in Southern California for both on and off the exchange?   Do physicians try to limit the number of "exchange" patients? 

(4) If the medical group or hospital that a customer selects quits participating in that insurer’s program during 2017, is the customer able to switch insurance companies or are they stuck with choosing from that insurer’s menu of available medical groups until the next annual enrollment period.

Thanks in advance for any recommendations/advice.

Member Summary
Staff Summary
  • Also categorized in:
Thanks for visiting Join for free to remove this ad.

You can see the premium price on the exchange. Call a broker or insurance company directly to compare. As a datapoint, I've done this in the past, and the premiums were exactly the same. So as far as I know, the only reason to be on the exchange would be for premium credits. Note that when I talked to the insurance company, they, at the time, had some plans that were not available on the exchange, but where available directly. Also note that this was only with two insurers, a year ago, and only for my location. So, YMMV.

Can't comment on any of your other questions. Good luck!

Look carefully at the networks for each plan. The answer to 2 is yes, all other benefits being the same. I bought off exchange this year because the price was slightly lower for similar benefits. The situation is actually more complicated, not less since the intro of the exchanges...I've been buying indie insurance since 2000. The main complication is the shrinking and shifting networks.

A plan in Covered California will have the same premiums and benefits as the same plan outside the exchange.  This is designed this way to prevent "adverse selection".   There are more providers and plans available outside the exchange though.
This table shows the breakdown of Federal Poverty Levels for 2017.  If your MAGI is above 400% of the FPL, you will receive no premium assistance and might as well purchase outside the exchange.
If you are below 138% of FPL, you may qualify for Medi-Cal for little or no cost health insurance.
Size of Household 138% 150% 200% 250% 300% 400%
1 $16,394 $17,820 $23,760 $29,700 $35,640 $47,520
2 $22,107 $24,030 $32,040 $40,050 $48,060 $64,080
3 $27,820 $30,240 $40,320 $50,400 $60,480 $80,640
4 $33,534 $36,450 $48,600 $60,750 $72,900 $97,200
5 $39,247 $42,660 $56,880 $71,100 $85,320 $113,760


My thanks to everyone who responded with answers and advice -- most appreciated.   I spoke with an insurance broker a few minutes ago and he confirmed what the posters mentioned above.  


Disclaimer: By providing links to other sites, does not guarantee, approve or endorse the information or products available at these sites, nor does a link indicate any association with or endorsement by the linked site to

Thanks for visiting Join for free to remove this ad.

While FatWallet makes every effort to post correct information, offers are subject to change without notice.
Some exclusions may apply based upon merchant policies.
© 1999-2017