What does “cost-sharing reduction” mean under the ACA?

Cost-sharing reductions are designed to make healthcare more affordable for individuals and families with low to moderate incomes. Under the Affordable Care Act, these subsidies specifically lower out-of-pocket costs, which include expenses such as copayments, deductibles, and coinsurance. This assistance is crucial because it helps to make necessary medical services more accessible to those who might otherwise struggle to afford them.

Eligible individuals typically receive these reductions when they purchase a health insurance plan through the Health Insurance Marketplace and have incomes between 100% and 250% of the federal poverty level. By decreasing the financial burden associated with healthcare costs, cost-sharing reductions play a significant role in encouraging more people to seek medical care without the fear of overwhelming expenses.