Health Care Subsidies: What You Need to Know

The federal government offers two types of subsidies to make health insurance more affordable for people and their families who qualify.

It is important to know that a subsidy is not a loan; you will not have to pay it back. A subsidy is just help to pay for your health care.

The two types of subsidies for those who qualify are the advance premium tax credit (APTC) and the cost-sharing reduction (CSR).

Advance premium tax credit

The APTC helps lower the costs of monthly health insurance payments, also known as “premiums.” When you apply for coverage in the Health Insurance Marketplace, you estimate your expected income for the year.

If you qualify for a premium tax credit based on your estimate, you can use any amount of the credit in advance to lower your premium.

If, at the end of the year, you’ve taken more premium tax credit in advance than you’re due based on your final income, you’ll have to pay back the excess when you file your federal tax return.

You can use APTC for any plan available through the marketplace. To qualify for APTC you must:

  • Have a household income between 100% and 400% of the federal poverty level (FPL).
  • Not be eligible for public coverage, such as Medicaid.
  • Not be offered affordable health insurance through an eligible employer plan that provides minimum essential coverage.
  • Not file a “Married Filing Separately” tax return. (Some exceptions apply.)
  • Not be claimed as a dependent by another person.

Cost-sharing reductions

CSRs only apply to Silver plans. They help lower your out-of-pocket costs on things like deductibles and copays. CSRs are also called “extra savings.”

If you're a member of a federally recognized tribe or an Alaska Native Claims Settlement Act (ANCSA) corporation shareholder, you may qualify for additional cost-sharing reductions.

This subsidy option works similarly to APTC, with a key difference: CSRs apply to more than just your monthly premiums; if you qualify for a CSR and enroll in a Silver plan, you automatically get reduced deductibles, copays, and coinsurance.

How do I find out if I am eligible for a health care subsidy?

To estimate your health insurance premium and subsidies for health insurance coverage, use the KFF Health Insurance Marketplace Calculator.

You’ve done the calculations. Now let’s get you covered.

Get one step closer to the high-quality health care you deserve. Enroll with a First Choice Next health plan today, or call us at 1-877-564-3152 (TTY 711), Monday through Friday, 9 a.m. to 6 p.m.

Enroll with a First Choice Next health plan today