How Do People Make Choices Among Marketplace Plans?

The Issue

Recent changes in the Marketplace, including enhanced subsidies in the Inflation Reduction Act and the elimination of cost-sharing subsidies that insurers were previously required to provide, has led to new patterns in consumer plan choice.

Key Findings

• While 57.9 percent of individuals in the Marketplace chose silver plans in 2023, 26.3 percent chose bronze plans and 15.8 percent chose gold plans.
• Choice of plan varied considerably by income. 81.4 percent of individuals with incomes between 100 percent and 150 percent of the federal poverty level chose silver plans while only 11.3 percent of individuals with incomes four times the federal poverty level chose silver plans.
• Data from California and New York reveal that about 10 percent of enrollees in Los Angeles and more than 20 percent of enrollees in San Francisco, New York City, and Long Island chose more expensive plans, likely due to more generous benefits or a preferred insurer.

Conclusion

The majority of people shopping in the Marketplace, particularly those with low incomes, chose silver plans to take advantage of low premiums. This indicates that the incentives of the Affordable Care Act appear to be working.

About the Author/Grantee

The nonprofit Urban Institute is dedicated to elevating the debate on social and economic policy. For nearly five decades, Urban scholars have conducted research and offered evidence-based solutions that improve lives and strengthen communities across a rapidly urbanizing world. Their objective research helps expand opportunities for all, reduce hardship among the most vulnerable, and strengthen the effectiveness of the public sector. Visit the Urban Institute’s Health Policy Center for more information specific to its staff and its recent research.