7 things to know about cost-sharing subsidies on the federal market

Megan Wood -  

A recent Kaiser Family Foundation brief outlined the bronze, silver, gold and platinum Affordable Care Act exchange health plan cost sharing provisions, according to The Henry J. Kaiser Family Foundation.

Here are seven things to know:

 

1. If low-income consumers chose silver federal or state marketplace plans, they experience reduced cost sharing.

 

2. Under these cost-sharing reductions, payers must establish variants of every standard silver plan, with every variant representing a higher actuarial value. A higher actuarial value results in decreased cost sharing.

 

3. The ACA demands standard silver plans have an actuarial value of 70 percent, meaning enrollees pay about 30 percent of service costs through cost sharing. These costs are paid through deductibles, copayments and coinsurance. However, the amount an enrollee will pay depends on an individualized basis.


4. Consumers with incomes between 100 percent and 150 percent of the federal poverty level are eligible for plans with an actuarial value of up to 94 percent; those with incomes between 150 percent and 200 percent of the federal poverty level may enroll in plans with an actuarial value of 87 percent; and those with those with incomes between 200 percent and 250 percent of the federal poverty level may enroll in plans with an actuarial value of 73 percent.

 

5. Typically, the cost sharing for a critical health benefit service in a reduced cost-sharing variant may not exceed the cost sharing for the same service in the standard silver plan.

 

6. The ACA also offers reduced out-of-pocket limits in the cost-sharing reduction variants, compared to other plans.

 

7. As the actuarial value of the variants increases, the average cost-sharing amounts in each service category decreases.

 

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