Q: How do cost-sharing reductions work?

Cost-sharing reductions were created specifically to help offset the cost of insurance for individuals and families enrolled in silver-level health plans purchased on healthcare.gov, through a state marketplace, or from an approved Web broker like GetInsured. Their purpose is to help you afford medical costs covered by your plan — but you can’t use them to pay for any medical costs considered out of your network.

Think of cost-sharing reductions — also known as cost-sharing subsidies — as a free upgrade on health insurance. These discounts are provided by the government to help pay for various health insurance costs, such as your deductible or the copay you’re charged when you visit the doctor. So at no extra cost, you get a silver level plan plus some additional expenses covered. That’s a sweet deal.

Here’s an example of how cost-sharing reductions work: Let’s say your health plan requires a $50 copayment each time you visit the doctor. Thanks to your cost-sharing subsidy, you might only owe $20 for a doctor’s visit. And if your health plan has a $2,000 deductible, the cost-sharing subsidy might knock that down a bit too.

Need help with the math? GetInsured can help walk you through it.”

  • Cost-Sharing Reductions