What types of subsidies and cost reductions are available for health insurance?
There are two main types of subsidies that help to lower your health insurance costs: Cost Sharing Reduction and the Advanced Premium Tax Credit. If you qualify for these, we'll let you know immediately and the premium you see will include the discounts you have received.
Below are the definitions of each subsidy:
Cost Sharing Reduction (CSR): This is a discount that lowers the amount you have to pay for deductibles, copayments, and coinsurance. This will also lower your out-of-pocket maximum — the total amount you’d have to pay for covered medical services per year.
Note: If you qualify for a CSR, you will likely need to enroll in a Silver plan in order to use it to lower your costs.
Advanced Premium Tax Credit (APTC): This is a tax credit that can be used to lower your monthly premium. If your estimated income falls between 100% and 400% of the federal poverty level for your household size, you'll likely qualify for a premium tax credit. In 2020, this translates to up to $51,040 for individuals and up to $103,000 for a family of 4.
You can enroll in any metal tier plan and still receive the advanced premium tax credit.
Note: Because the advanced premium tax credit is based on reported future income, if you use more of the credit than you qualify for based on your final yearly income, you must repay the difference when you file your federal income tax return. Similarly, if you use less of the credit than you qualify for, you’ll get the difference back as a refundable credit when you file your taxes.
To lower your risk of owing money at the end of the year, try to estimate your income as close as you can to what you believe you will earn. And keep in mind, you can always update your income throughout the year if you start earning more or less than you expected.
Learn more about estimating and reporting your income here.