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What is Subsidized Health Insurance?
Subsidized health insurance is an insurance plan with reduced premiums with health coverage that’s obtained through financial assistance from programs to help people with low and middle incomes.
There are two kinds of subsidies available from the federal government for individual health insurance plans.*
- The Advanced Premium Tax Credit lowers your monthly health insurance payment, or premium.
- Cost Sharing Reduction reduces your out-of-pocket maximum. This amount is the most you’ll have to pay during a policy period (usually a year) for health care services you receive and includes your deductible, coinsurance and copays.
What Does Subsidized Health Insurance Cover?
Subsidies can only be applied to qualified health plans that are purchased through a government health insurance exchange or through a qualified online insurance marketplace partnering with a government exchange. Insurers are offering additional plans outside of exchanges which will still meet the coverage requirements of the Affordable Care Act, but these off-exchange plans are not eligible for purchase with a subsidy.
Who Pays for Subsidized Health Insurance?
Government health insurance subsidies are provided to qualifying consumers to help them purchase health insurance for themselves in the open market. Whatever amount the subsidy doesn’t cover, the consumer is responsible for.
Who’s Eligible for Subsidized Health Insurance?
It depends on:
- How your income compares to the Federal Poverty Level
- Your family size
- How much health insurance costs where you live
What Are the Benefits of Subsidized Health Insurance?
People with low and middle incomes are able to have access to affordable, quality healthcare.
Employer Subsidized Health Insurance
Those who work for a company may receive nominal or free health insurance through their employer’s subsidized health insurance plan.
If you are eligible for Medicaid or if your State doesn’t expand Medicaid and you make less than 100% of the Federal Poverty Level, you will not qualify for subsidies on the health insurance marketplace. Learn how you can apply for Medicare even if you’re not ready to retire.