The Affordable Care Act (ACA) provides premium tax credits and cost-sharing reductions as subsidies to help individuals afford health insurance. Premium tax credits lower the monthly cost of insurance premiums for those who qualify based on their income and household size. These credits are designed to make health insurance more accessible for middle- and lower-income individuals and families who purchase insurance through the Health Insurance Marketplace.
Cost-sharing reductions further assist these individuals by lowering out-of-pocket costs, such as deductibles and co-pays, when they use healthcare services. These reductions are available to those who qualify based on their income and select a silver-level health plan through the Marketplace.
This approach aims to enhance affordability and accessibility of health care. In contrast, the other options mentioned do not accurately reflect the subsidies provided under the ACA. There are specific income thresholds and guidelines that govern eligibility for these financial aids, ensuring that support is available to those who need it most and preventing a broad approach like free insurance for everyone or direct cash payments without specific criteria.