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Sources: Kaiser Family Foundation Back to Glossary. The premium tax credit is refundable, meaning it is available to qualifying enrollees regardless of whether they have federal income tax liability. Everyone who receives APTC in a tax year is required to file a tax return for that year in order to continue receiving financial assistance in the future.
The second form of financial assistance available to Marketplace enrollees is a cost sharing subsidy. Unlike the premium tax credit which can be applied toward any metal level of coverage , cost sharing subsidies are only offered through silver plans. For eligible individuals, cost sharing reductions CSR are applied to a silver plan, essentially making deductibles and other cost sharing under that plan more similar to that under a gold or platinum plan.
Cost sharing subsidies are determined on a sliding scale based on income. This level of cost sharing reduction plan sometimes called CSR 94 plans is similar to a platinum plan, and otherwise, applicable silver plan deductibles, copays, and other cost sharing are substantially reduced.
Insurers have flexibility in how they set deductibles and copays to achieve the actuarial value under marketplace plans, including CSR plans. The ACA also requires maximum annual out-of-pocket spending limits on cost sharing under marketplace plans, with reduced limits for CSR plans.
Table 4. Subsidies to make insurance more affordable and increase insurance coverage are a key element of the Affordable Care Act. Premium and cost sharing subsidies of varying levels are available to individuals and families with low to moderate incomes, to make coverage and care more affordable.
Beginning in , the ARPA temporarily increased marketplace premium tax credit amounts and extended eligibility for premium tax credits.
The ARPA subsidies first became available to consumers during a pandemic-related special enrollment opportunity in , and more than 2. Even so, KFF estimates millions more uninsured individuals are eligible for marketplace financial assistance but not enrolled. As the public learns more about more affordable coverage options in the marketplace, it is possible that even greater numbers can enroll in plans with both monthly premiums and deductibles that they find affordable.
Health Insurance Marketplace Subsidies There are two types of subsidies available to marketplace enrollees. Who is eligible for the premium tax credit? If married, must file taxes jointly in order to qualify For the purposes of the premium tax credit, household income is defined as the Modified Adjusted Gross Income MAGI of the taxpayer, spouse, and dependents.
The unsubsidized are unique among health care consumers in that they must confront the full retail price of health insurance. While many states took action to protect consumers from premium increases, others raised premiums on all products, a decision which most adversely affected their unsubsidized residents. Unsurprisingly, this segment of the market has the lowest take-up rate, and is most susceptible to diversion to limited coverage plans. Growth in the individual market depends in large part on improving affordability for the unsubsidized, and results thus far are decidedly mixed.
Providing research, insight, and analysis on key issues affecting health and health care in the United States. How We Work. Our Focus Areas. About RWJF. Quick Links. Silver-loading affects consumers differently However, enthusiasm about this feature should be tempered by the fact that the population to which it applies is relatively small.
Parsing premiums for the unsubsidized The premium of the least expensive bronze plan on or off the exchange is a useful measure of affordability for the unsubsidized.
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