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, in addition, 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.

IMPORTANT

If you qualify for these extra savings on out-of-pocket costs, you get them only if you enroll in a plan in the Silver category. You can use a premium tax credit for a plan in any metal category, but you’ll get extra cost-sharing reductions only if you pick a Silver plan.

Do you qualify for cost-sharing reductions?

Use this quick tool to see if your 2018 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 Health Insurance Marketplace.

How cost-sharing reductions work

If you qualify for savings on out-of-pocket costs and enroll in 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 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, will be lower. Instead of $5,000, your out-of-pocket maximum for a particular Silver plan could be $3,000.

Important: The above are just examples to illustrate how cost-sharing reductions work.

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.)