Health insurance exchanges: What you need to know

Health insurance exchanges are all over the news, but do you know how they work? Get the facts about exchanges.

By Mayo Clinic Staff

Health insurance exchanges were created by the Patient Protection and Affordable Care Act, which requires that most U.S. citizens and legal residents have health insurance. Health insurance exchanges, also called marketplaces, make insurance available to people who don't have coverage, people who need financial assistance, and small businesses and their employees.

Health insurance exchanges look slightly different from state to state, depending on if a state has chosen to use a federally facilitated model. However, what all exchanges have in common is the goal to help you:

  • Determine if you're eligible for Medicaid, low-cost coverage or financial assistance to cover the costs of health insurance
  • Compare and contrast health insurance plans
  • Choose and enroll in a health insurance plan that meets your needs

How do health insurance exchanges work?

Health insurance exchanges provide access to health insurance plans offered by private companies. These plans must cover a core set of benefits — called essential health benefits — that includes hospitalization, maternity and newborn care, prescription drug coverage, and mental health and substance abuse services. Many preventive services are offered at no cost.

To participate in a health insurance exchange, you fill out an application that provides information about your household size and income. You then find out if you qualify for Medicaid, low-cost coverage or financial assistance to cover the costs of health insurance. Health insurance exchanges also allow you to see and compare different insurance plans.

None of these insurance plans can turn you away or charge you more for coverage because you have an illness or medical condition.

How do I apply?

You can fill out an application in one of four ways:

  • Online at
  • By telephone at 800-318-2596
  • In person with a trained counselor
  • By mailing in an application downloaded from

How can I find out if I'm eligible for Medicaid or financial assistance?

Eligibility for Medicaid has been expanded in many but not all states. You can find out if you qualify for Medicaid or financial assistance at, by telephone (800-318-2596) or with the help of a trained counselor (

If you already have Medicaid, there will be no change for you. You don't need to apply again.

Feb. 05, 2014 See more In-depth