Cost-sharing reductions aren’t as common as premium tax credits, but you could be missing out on some major savings if you aren’t taking advantage of them.
What Is a Cost-Sharing Reduction?
Also known as “extra savings,” cost-sharing reductions are a way to save on health care costs outside of your monthly premium. They provide a discount on deductible costs and copays, and they ultimately lower your out-of-pocket maximum for the plan year. So, if your copays for primary care visits are usually $40, a cost-sharing reduction could bring that cost down to $30 or $20 per visit. This means that health insurance carriers start paying their share of your benefits sooner, which is a big win for your wallet.
How Do I Get a Cost-Sharing Reduction?
If you have a Silver plan through the Marketplace, you might qualify for cost-sharing reductions. Only Silver Marketplace plans are eligible for this form of savings, so double-check that you haven’t enrolled in a plan from any other tier if your goal is to add this feature to your benefits.
To take advantage of these extra savings, you’ll need to confirm that your household income is at or below 250% of the federal poverty limit. When you fill out your application for coverage through the Marketplace, it will include questions meant to verify that you qualify for these extra savings, as well as for premium tax credits.
The goal of these extra savings is to limit out-of-pocket health care spending in a way that fits your needs. It’s a great way to get more bang for your buck in your health care budget, so go and check whether you qualify.