Cost-sharing reductions
After you fill out an application with the Marketplace and provide household and income information, you’ll find out if you qualify for the
A tax credit you can use to lower your monthly insurance payment (called your “premium”) when you enroll in a plan through the Health Insurance Marketplace®. Your tax credit is based on the income estimate and household information you put on your Marketplace application.
Refer to glossary for more details.
that lowers your monthly health insurance bill.
You’ll also find out if your income qualifies you for extra savings known as “
A discount that lowers the amount you have to pay for deductibles, copayments, and coinsurance. In the Health Insurance Marketplace®, cost-sharing reductions are often called “extra savings.” If you qualify, you must enroll in a plan in the Silver category to get the extra savings.
Refer to glossary for more details.
.” If it does, you can save money a second way — by paying less out of pocket each time you get medical services.
Notice:
Getting extra savings with a Silver plan
- If you qualify for cost-sharing reductions:Youmustpick a plan in theto get these extra savings on out-of-pocket costs.
One of 4 categories of Health Insurance Marketplace® plans (sometimes called “metal levels”). Silver plans fall about in the middle: You pay moderate monthly premiums and moderate costs when you need care. Important: If you qualify for “cost sharing reductions” (or “extra savings”) you can save a lot of money on deductibles, copayments, and coinsurance when you get care — but only if you pick a Silver plan.
Refer to glossary for more details.
- If you enroll in a plan in another health plan category, you can still use the tax credit. But, you won’t get these extra savings.
- Silver plans may also be available if you’re eligible for the tax credit and can enroll through a Special Enrollment Period based on estimated household income.
- If you’re enrolled in a Silver plan and lose your cost-sharing reductions:You’ll qualify for a Special Enrollment Period. If you want to change plans, you can enroll in a Bronze, Silver or Gold plan that meets your needs and fits your budget.
Do you qualify for cost-sharing reductions?
- If it does fall in the range, the amount you'll save on out-of-pocket costs depends on your specific income estimate. The lower your income within the range, the more you'll save.
- You'll find out exactly how much you'll save only after you apply and shop for Silver plans in the Marketplace.
How cost-sharing reductions work
If you qualify for savings on out-of-pocket costs and enroll in a Silver plan:
- You'll have a lower deductible. This means the insurance plan starts to pay its share of your medical costs sooner. For example, if a particular Silver plan has a $750 deductible, you have to pay the first $750 of medical care yourself before the insurance company pays anything (other than for free preventive services). But if you qualify for cost-sharing reductions, your deductible for a Silver plan could be $300 or $500, depending on your income.
- You'll have lower copayments or coinsurance. These are the payments you make each time you get care — like $30 for a doctor visit. If a Silver plan's copayment is $30 for a doctor's visit, if you enroll in the plan and qualify for extra savings, you may pay $20 or $15 instead.
- You'll have a lower "out-of-pocket maximum."This means the total amount you'd have to pay in a year if you used a lot of care, like if you got seriously sick or had an accident, would be lower. Instead of $5,000, your out-of-pocket maximum for a particular Silver plan could be $3,000.
Note:These examples explain how cost-sharing reductions work. Your costs will vary depending on which plan you pick.
Plans in all categories have a wide range of deductibles, copayments/coinsurance, and out-of-pocket maximums. You'll know exactly how much you save on out-of-pocket costs only when you shop for Silver plans in the Marketplace.
