Healthcare subsidies: what you need to know
The federal government offers two types of subsidies to make health insurance more affordable for people and their families who qualify.
It is important to know that a subsidy is not a loan; you will not have to pay it back. A subsidy is just help to pay for your health care.
The two types of subsidies for those who qualify are the Advance Premium Tax Credit (APTC) and the Cost Share Reduction (CSR).
Advance Premium Tax Credit (APTC)
The Advance Premium Tax Credit (APTC) helps lower the costs of monthly health insurance payments, also known as “premiums.” When you apply for coverage through an individual or family health plan, you estimate your expected income for the year.
If you qualify for a premium tax credit based on your estimate, you can use any amount of the credit in advance to lower your premium.
If, at the end of the year, you’ve taken more premium tax credit in advance than you’re due based on your final income, you’ll have to pay back the excess when you file your federal tax return.
You can use APTC for any plan available through the marketplace. To qualify for APTC you must:
- Have household income between 100% and 400% of the federal poverty level (FPL)
- Not be eligible for public coverage, such as Medicaid
- Not be offered affordable health insurance through an eligible employer plan that provides minimum essential coverage
- Not file a “Married Filing Separately” tax return (some exceptions apply)
- Not be claimed as a dependent by another person
Cost-Sharing Reductions (CSRs)
Cost-sharing reductions (CSRs) only apply to Silver plans and help lower your out-of-pockets costs on things like deductibles and copays; CSRs are also called “extra savings.”
If you're a member of a federally recognized tribe or an Alaska Native Claims Settlement Act (ANCSA) corporation shareholder, you may qualify for additional cost-sharing reductions.
This subsidy option works similarly to APTC with a key difference: CSRs apply to more than just your monthly premiums; if you qualify for a CSR and enroll in a Silver plan, you automatically get reduced deductibles, copays, and coinsurance.
How do I find out if I am eligible for a healthcare subsidy?
To estimate your health insurance premium and subsidies for health insurance coverage, use the KFF Health Insurance Marketplace Calculator.
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