If you’re shopping for individual health insurance, choosing an insurance policy that will meet your needs can be challenging. Luckily, all health plans on the federal or state-based marketplaces cover basic healthcare services. These plans are known as qualified health plans (QHPs)
QHPs are health insurance policies that follow Affordable Care Act (ACA) protections and requirements. These types of plans must meet specific standards to be certified as “qualified” on the individual market and cover essential services that most people rely on for their health.
Below, we’ll walk you through the ins and outs of QHPs, including how they’re categorized and how you can enroll in one.
Find out what qualified health plans work across multiple states in our complete guide
What is a qualified health plan?
A QHP is a health insurance plan that meets the requirements established by the ACA. These plans are certified by the Health Insurance Marketplace and provide minimum essential coverage (MEC). Some coverage options include benefits beyond the essentials, such as dental coverage.
According to the ACA, a typical health plan that’s considered a QHP must:
- Cover the ten essential health benefits, such as primary care, mental health services, prescription drugs, and emergency care.
- Limit the amount qualified individuals spend on deductibles, copays, annual out-of-pocket maximums, and other healthcare expenses.
- Prohibit lifetime benefit limits.
- Include a reasonable number of in-network providers determined by each state.
- Meet other requirements of the ACA.
QHPs are certified by public health exchanges, which include the federal Marketplace and all state-based marketplaces. The certification process happens each year before the marketplaces’ annual open enrollment process.
How are qualified health plans categorized?
In the United States, QHPs sold on the Marketplace are organized by metal levels: bronze, silver, gold, and platinum. The metal levels make it easier for qualified individuals to compare health plans that have similar health insurance premiums and out-of-pocket medical costs. All plan types sold on the health exchanges, regardless of their metal level, are QHPs.
Plans are assigned to a metal level based on actuarial value. While all QHPs pay for the same type of coverage, including the essential health benefits, a lower metal level policy, like bronze, costs less in premiums and more in out-of-pocket costs.
Conversely, a higher metal level policy, like gold, means you’ll pay a higher monthly premium, but less out-of-pocket medical expenses.
In addition to the four metallic tiers, catastrophic plans are considered QHPs because they cover essential health benefits. However, these types of plans are only available to those under age 30 and to those who are granted hardship exemptions based on income and other circumstances.
To break it down simply, the chart below outlines the four metallic tiers’ level of health coverage, plus catastrophic plans:
|
Plan type |
Level of coverage |
Who’s it for? |
|
Bronze level |
60% of expected costs for the average individual. |
This plan is the most affordable way to protect yourself from major medical situations, like severe sickness or injury. Health insurance premiums will be low for this plan, but you’ll have to pay for most routine medical services yourself instead of the insurance company paying. |
|
Silver level |
70% of expected costs for the average individual. |
This plan may provide the best overall value if you qualify for cost-sharing reductions. This plan is also a good choice if you’re willing to pay a slightly higher monthly premium rate than the bronze plan for a higher level of coverage of your routine medical services. |
|
Gold level |
80% of expected costs for the average individual. |
A gold plan could be a good value if you receive a lot of medical care or have a chronic condition. However, your insurance company will charge you a higher monthly premium rate to cover more out-of-pocket medical costs when you get medical treatment. |
|
Platinum |
90% of expected costs for the average individual. |
This plan is best for qualified individuals who usually use a lot of care or have a chronic condition. Participants will pay a high monthly premium rate for a greater level of coverage. |
|
Catastrophic |
In addition to the essential benefits, these plans are designed to cover major accidents or illnesses. |
Available to people under 30 who need little primary care or who meet the government’s criteria for a hardship exemption. This level of coverage has low monthly premiums, but high deductibles and out-of-pocket maximums. |
As with all typical health plans, you’ll pay a monthly insurance premium whether or not you use healthcare services. Premium costs are typically higher for plans that pay more of your medical expenses, such as platinum plans. Health insurance premiums are also usually higher for plans with lower deductibles and coinsurance amounts.
Do qualified health plans work with Medicare?
QHPs are typically not for people who qualify for Medicare. QHPs are ACA-specific and apply to people who don’t participate in an employer-sponsored group health insurance plan and who don’t meet eligibility requirements for Medicare or Medicaid. In fact, it’s illegal for someone to sell you a QHP if they know you have Medicare.
If you currently have a QHP and are becoming eligible for Medicare, in most cases, you should drop your QHP and enroll in Medicare. If you’re switching from a QHP to Medicare, follow your open enrollment guidelines to avoid a gap in coverage and late enrollment process penalties.
How to purchase a qualified health plan
You can enroll in a QHP on the federal or a state Health Insurance Marketplace. Qualified individuals can shop for coverage online or over the phone with a Marketplace representative. Depending on your household income, premium tax credits and cost-sharing reductions can be used to purchase a QHP.
Plans sold off-exchange as ACA-compliant health insurance follow the same basic rules as QHPs, but they aren’t certified by an exchange, nor are they eligible to be purchased with a premium tax credit. Additionally, premium tax credit subsidies can’t be used to buy catastrophic plans.
For a typical health plan purchased through the federal or state exchange, you’ll need the following information to enroll:
- Personal information, such as name, address, email address, social security number, date of birth, and citizenship status.
- Household size and income if you’re planning to apply for premium tax credits or cost-sharing reductions.
- A variety of documentation to prove your income, including pay stubs, W2s, your most recent tax return, etc.
- Health insurance coverage details for any employer-sponsored health plan that’s available to you (regardless if you’re enrolled in it or not).
- Hardship exemption notice if you want to purchase a catastrophic plan.
You can also speak directly with your health insurance broker or agent to enroll in a QHP. They can personally help you find a plan at an insurance company that fits your needs and budget. They can search for QHPs on private exchanges, help you find supplemental insurance, like a vision or dental plan, and answer any questions you may have along the way.
Conclusion
When it comes to healthcare, consumers need to be assured that the health insurance policy they’re paying for will provide the coverage they need for routine check-ups, healthcare emergencies, out-of-pocket costs, and everything in between.
Having a QHP can help you manage your essential healthcare needs and, depending on your plan type, your health insurance premiums. No one plans to get sick or hurt, but having a QHP for preventive care or in case of emergency can cover the costs so you and your family can stay healthy at an affordable price.
This article was originally published on June 24, 2022. It was last updated on September 19, 2022.
