In addition to the premium tax credit, cost-sharing subsidies are another form of financial assistance.
Let's use 2014 as our example again: If your 2014 income level fell between 100 percent and 250 percent of the FPL, you qualified for cost-sharing reductions, which means lower out-of-pocket costs. Specifically, you qualified for cost-sharing subsidies if your 2014 annual income fell into the following ranges [source: HealthCare.gov]:
- $11,670 to $29,175 for individuals
- $15,730 to $39,325 for a family of 2
- $19,790 to $49,475 for a family of 3
- $23,850 to $59,625 for a family of 4
- $27,910 to $69,775 for a family of 5
- $31,970 to $79,925 for a family of 6
- $36,030 to $90,075 for a family of 7
- $40,090 to $100,225 for a family of 8
(Just as with premium tax credits, qualifying income ranges for cost-sharing reductions are higher if you live in Alaska or Hawaii)
Qualifying for cost-sharing subsides means you'll have lower co-payments, lower deductibles and lower coinsurance. Although the health care law sets the maximum amount an insurer can expect you to pay when it comes to out-of-pocket costs, the actual costs vary from plan to plan — which means that although plan A and plan B may have the same monthly premium cost, plan A may have a higher co-pay, for instance, than plan B, but plan B may have a lower deductible than plan A. So it pays, literally, to choose a plan not solely based on premiums, but also one that best suits your out-of-pocket budget.
If your household income falls into the lowest income category, it's expected you'll pay no more than 6 percent of that plan's out-of-pocket expenses. On the other hand, if your income falls into the highest range, your cost-sharing subsidy will reduce your cost to 27 percent of the plan's out-of-pocket expenses [source: ObamaCare Facts].
Unlike the premium tax credit, cost-sharing assistance is available only when you purchase and enroll in a silver-level health plan through the Marketplace. In 2014, as many as 76 percent of people who were eligible for a cost-sharing subsidy selected a silver plan and received the credit [source: ASPE Office of Health Policy].
If your income and family size qualify you for subsidies or the premium tax credit, there are a few additional criteria you need to meet before you really, truly qualify.