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Financial Help for Consumers

Making health insurance affordable is another priority of the Affordable Care Act. The federal government is providing financial assistance for eligible consumers who buy through a state or federal marketplace. 

There are two types of financial help available to reduce the cost of health insurance:

  • Premium assistance: New premium tax credits will help to lower the cost of monthly premiums for qualified individuals. Eligible consumers can choose to:
    • Take the entire amount of premium assistance right away to lower their monthly premium bills.
    • Wait until the end of the year and apply the amount as a credit when filing taxes.
    • Apply some right away, and the balance at tax time.
  • Cost-sharing reductions: (Also known as subsidies and cost-sharing subsidies). In addition to premium tax credits, certain consumers may also be eligible for reductions of their out-of-pocket costs. For example, a copayment for a doctor office visit might be $3 instead of $20. To receive cost-sharing reductions, eligible consumers have to enroll in a silver-level qualified health plan.

Both types of financial help are available only to eligible consumers who buy health insurance through a state marketplace or the federal health insurance marketplace.

Eligibility is based on annual household income as a percentage of the Federal Poverty Level (FPL).

Household financial help eligibility
Household Income Eligibility
134%–250% FPL
  • Premium assistance
  • Cost-sharing reductions if enrolled in a silver-level health plan through a state marketplace or the federal health insurance marketplace
250%–400% FPL
  • Premium assistance
Over 400% FPL
  • Can purchase health insurance through the marketplace but do not qualify for financial help

Consumers at or below 133% of the FPL qualify for Medicaid and are not eligible for premium assistance. Some states are planning to expand Medicaid eligibility to 138% of the FPL.

People offered coverage by an employer are not eligible for premium assistance unless the employer’s plan does not meet the minimum value of at least 60 percent or unless the person’s share of the premium is more than 9.5 percent of their household income.