Understanding Cost-Sharing Reductions in Health Insurance

How Do Cost-Sharing Reductions Work?

Under the ACA, health insurance plans offered through the Health Insurance Marketplace are categorized into different metal levels: Bronze, Silver, Gold, and Platinum. Each metal tier corresponds to a different level of cost-sharing between the member and insurer. CSRs are only available for members enrolled in a Silver metal level plan who also meet certain income requirements.

It's important to note that CSRs are different from premium subsidies available under the ACA. Premium subsidies help lower the monthly cost of insurance for eligible individuals, while CSRs focus on further reducing out-of-pocket costs for covered medical services.

Who Qualifies For Cost-Sharing Reductions?

To qualify for CSRs, individuals and families must meet the following criteria:

1. Enrollment in a Silver plan: CSRs are only available to individuals and families enrolled in a Silver plan. CSRs are not  available for those enrolled in Bronze, Gold, or Platinum plans.
2. Income eligibility: The primary factor in determining eligibility for CSRs is the individual or family's income level. The income is evaluated as a percentage of the federal poverty level (FPL). Cost-sharing reduction eligibility is typically determined for individuals or families with incomes between 100% and 250% of the FPL. The lower an individual or family’s income is in relation to the FPL, the more substantial the CSRs they may qualify for.

How Much Can I Expect To Save With a Cost-Sharing Reduction?

The amount individuals can save with CSRs varies based on the extra savings they qualify for and the specific Silver plan they choose. 

For example, if a member would normally have a $1,000 deductible under a Silver plan, the cost-sharing reductions may lower it to $500 or even $0, depending on their income level.

One important feature of CSRs is the maximum out-of-pocket (MOOP) limit. The MOOP limit sets a cap on the total amount individuals and families must pay for covered healthcare services in a year. Once the MOOP limit is reached, the insurer covers 100% of the remaining costs for covered services.

Individuals and families with incomes between 100% and 200% of the FPL: May qualify for enhanced CSRs, which result in a lower MOOP limit compared to individuals and families with higher incomes. The MOOP limit for this income range can be significantly lower than the standard MOOP limit for Silver plans. Individuals and families in this income range may have considerably reduced out-of-pocket costs compared to those with higher incomes.

Individuals and families with incomes between 201% and 250% of the FPL: May qualify for moderate CSRs, resulting in a slightly lower MOOP limit compared to individuals and families with higher incomes. The MOOP limit for this income range is typically higher than those in the 100%-200% FPL range, but still lower than the standard MOOP limit for Silver plans.

When exploring health coverage through the Marketplace, individuals and families can compare different options, including the estimated total yearly costs (monthly premium plus out-of-pocket expenses) for each plan. This can help provide a better understanding of the potential savings with CSRs and how they may impact the overall healthcare costs for an individual or family.

How Do I Find Out If I am Eligible For Cost-Sharing Reductions?

The best way to determine your eligibility for CSRs is to begin completing a Marketplace health plan application. Additionally, Anthem can guide you through the enrollment process, and help you find out if you’re eligible for savings.