Marketplace Coverage, Subsidies, and Cost-Sharing Reductions

Premium tax credits or subsidies are available for those who are eligible for Marketplace Qualified Health Plans. They can be used with Bronze, Silver, Gold, or Platinum plans. The amount of savings is determined by household income. These credits, or subsidies, lower the cost of the monthly premiums that you will pay for these plans. Even higher earners may qualify for premium subsidies if the premium costs exceed 8.5% of their household incomes.

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Cost-sharing. You may have come across this term when exploring your health care coverage options. But what exactly does it mean? Cost-sharing refers to the part of a medical claim made to your insurance company that you, the insured, must pay. It comes in the form of deductibles, coinsurance, or copays. How much you will pay depends on the terms of your particular plan.

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A deductible is the yearly amount you must spend for medical services before your insurance starts paying for your covered health care expenses. Usually, commercial policies will not pay any health care costs, except for preventive services, until you have met your deductible, However, sometimes a plan will only require a copay for certain services even before the deductible has been met. Once you have met your deductible, you will most likely still need to pay a portion of your medical costs until you reach your out-of-pocket maximum. The out-of-pocket maximum is the most that your insurance company can require you to spend for covered medical costs in a plan year, aside from your premiums.

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A co-payment is a fixed amount you pay for particular types of healthcare services, such as office visits, prescription medications, trips to the emergency room, or surgery. This set amount can be required before or after you've met your deductible, providing a predictable out-of-pocket expense for those services.

Co-insurance represents a percentage of the allowed cost of a given service that you must pay. For instance, with an 80/20 insurance plan, if the allowed amount for the medical care that you have received is $100, and you have already met your deductible, you would pay $20, which is 20 percent, while your insurance covers the remaining 80%, or $80.

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Cost-sharing reductions, or CSRs, are a provision of the Affordable Care Act (ACA). Their purpose is to make healthcare costs more affordable. CSRs lower coinsurance, copay, deductible, and maximum out-of-pocket costs. The degree to which your costs may be lowered is based on your household income and size. CSRs are available to those with household incomes between 100% and 250% of the federal poverty level. Cost-sharing reductions are only available with Marketplace Silver tier plans. When you search for health care coverage using the prescreening tools on Kentucky’s kynect website, the reduced plan costs will appear in the deductibles, copays, coinsurances, and out-of-pocket maximums displayed.

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Cost-sharing reductions and premium tax credits can truly make a difference in your healthcare journey. Understanding how these features work can help you make choices that will make your health care coverage more affordable.