Health insurance is a financial commitment that is not for the faint of heart. Premiums are high and so are deductibles. To keep monthly costs from getting higher, you’ll want to find subsidized health insurance to offset the cost. These Affordable Care Act (ACA) subsidies take many forms and can significantly lighten the burden of purchasing an individual health insurance policy. Depending on your income, age and other factors, you may qualify for various types of assistance with paying coverage. Whether you’re just researching your options or have already started the process of buying a policy, this guide will help you understand what subsidized health insurance is and how they can make coverage more affordable for you.

Are Affordable Care Act Subsidies?

Affordable Care Act subsidies are deductions or discounts applied to your health insurance premiums or out-of-pocket expenses. The availability of these subsidies depends on your income and a number of other factors. The specific types of assistance you can receive depend on the country where you live, your age and the amount of money you earn. Because ACA subsidies are designed to make health insurance more affordable for people on lower incomes, they are available only to those who purchase individual plans through state or federal health exchanges. Subsidies come in the form of tax credits and reduced cost-sharing. The first is a reduction in your insurance premium, while the second reduces your out-of-pocket costs when you actually use the insurance. It is also possible to receive both of these subsidies.

How to Know If You Qualify for a Subsidy

If you think you qualify for subsidized health insurance, the first step is to find out exactly how much support you are eligible for. The easiest way to do this is to use an online subsidy calculator. You can find free calculators on websites such as HealthCare.gov or the federal government income tax website, IRS.gov.

You’ll need to provide some basic information, including:
– The amount of money you earn each year
– The number of your family members who will follow the health insurance policy
– Whether you’re working or not
– Do you have dependents that will also be covered by your policy

Advanced Premium Tax Credit

If you earn less than 400% FPL, you may qualify for a premium tax credit. These subsidies apply directly to your health insurance premiums and can lower them by as much as $800 per month. If you have a premium tax credit that is applied to your monthly premium, you don’t have to pay the full amount up front. Instead, the premium tax credit is applied directly to your monthly payment and you only have to pay the difference. This allows you to pay less monthly premiums than you otherwise would.

Reducing Cost Sharing (CSR)

Health insurance provided through the Affordable Care Act exchange has higher deductibles and copays than many traditional policies. This is done to reduce monthly premium costs. If you qualify for reduced cost-sharing, you’ll pay less when you go to the doctor or visit the emergency room. This can significantly reduce your overall expenses.

Residency Assistance and Risk Adjustment

Health insurance subsidies are determined by various factors. One of the most important is your residence status. If you are not a resident of one of the states that use federally managed exchanges, you may have to pay more for your health insurance than you would in other states. This is because some states offer subsidized health insurance for residents, but most do not. The risk adjustment assistance and residency programs are designed to level the playing field for non-residents. The risk-adjustment program takes into account the overall health profile of each state and applies percentage adjustments to specific insurance providers. Risk adjustment can help lower the overall cost of a health insurance policy.

Conclusion

Health insurance is a financial commitment that is not for the faint of heart. Premiums are high and so are deductibles. To keep monthly costs from getting higher, you’ll want to find subsidized health insurance to offset the cost. These Affordable Care Act (ACA) subsidies take many forms and can significantly lighten the burden of purchasing an individual health insurance policy. Depending on income, age, and other factors,

You may qualify for various types of assistance with paying coverage. What is the Affordable Care Act Subsidy? ACA subsidies are deductions or discounts applied to your health insurance premiums or out-of-pocket expenses. The availability of these subsidies depends on your income and a number of other factors. The Continuation Premium Tax Credit can lower your monthly premium by as much as $800 per month. Cost-sharing deductions can reduce your expenses when you actually use insurance.