Saving money on health insurance

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.

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.

• If you qualify for cost-sharing reductions: You must pick a plan in the

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.

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

• 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.

American Indians and Alaska Natives and cost-sharing reductions

More answers: Cost-sharing reductions

How will I find out if I qualify for cost-sharing reductions?

After you apply for Marketplace coverage, check your Eligibility Determination Notice. If it says "Can choose a health plan with lower copayments, coinsurance, and deductibles" and is followed by (04), (05), or (06), you qualify for income-based savings — but only if you pick a Silver plan.

If I choose a Catastrophic plan will I qualify for savings on out-of-pocket costs?

No. Cost-sharing reductions apply only to Silver plans. (Catastrophic plans are also not eligible for the tax credit, no matter what your income is.)