After you fill out an application with the Health Insurance Marketplace® and provide household and income information, you’ll find out if you qualify for a premium tax credit that lowers your monthly health insurance bill.
You’ll also find out if your income qualifies you for extra savings known as “cost-sharing reductions.” If it does, you can save money a second way: by paying less out of pocket each time you get medical services.
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Getting extra savings with a Silver plan
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- If you qualify for cost-sharing reductions: You must pick a plan in the Silver category to get these extra savings on out-of-pocket costs.
- If you enroll in a plan in another health plan category, you can still use a premium tax credit. But, you won’t get these extra savings.
- Silver plans may also be available if you’re eligible for a premium 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?
Use this quick tool to see if your 2023 income estimate falls in the range 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.
American Indians and Alaska Natives and cost-sharing reductions
Learn about special cost-sharing reduction rules for American Indians and Alaska Natives.
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 a premium tax credit, no matter what your income is.)