Health Insurance Subsidy - What Is It | Anthem.com
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Understanding Health Insurance Subsidies

Understanding Health Insurance Subsidies

When planning for the costs of coverage, it is important for every household budget to include health insurance costs. However, we understand it is not always easy to add this kind of expense into your monthly finances. That is where subsidies can help.

What is a health insurance subsidy?

If you do not have health coverage provided through an employer, Medicare, or Medicaid, the federal government provides health insurance subsidies through the Affordable Care Act to help cover some of the costs of health coverage.

How health insurance subsidies are calculated

The Affordable Care Act bases subsidies on your earnings, family size (including yourself, your spouse if married, and anyone you will claim as a tax dependent — even if they do not need coverage). It also considers the cost of health coverage in your state.

There are two types of health insurance subsidies:

  1. Advanced Premium Tax Credit helps lower monthly premiums. If you qualify, the Advanced Premium Tax Credit discounts your monthly health coverage payments, also known as a premium. You will not have to pay the full amount of your monthly premium. If your income varies throughout the year, you can adjust how much your tax credit applies to your monthly health insurance premiums.
  1. Cost-Sharing Reduction reduces out-of-pocket costs which include your deductible, coinsurance, or copays. If you are eligible for Cost-Sharing Reductions, you receive your health plan with reduced cost-sharing charges included.

Keep in mind, you may be eligible for both the Advanced Premium Tax Credit and the Cost-Sharing Reduction, which can help you save on all your annual health plan costs.

How to know if you are eligible for a health insurance subsidy

Your eligibility for subsidized health coverage depends primarily on how much you earn compared to yearly updated federal guidelines.

If you earn less than 400% of the federal guidelines, you could be eligible for the Advanced Premium Tax Credit subsidy.

If you earn less than 250% of the federal guidelines, you could be eligible for both the Advanced Premium Tax Credit subsidy and Cost-Sharing Reduction.

The number of people in your household and the cost of health coverage in your state also affect eligibility.

Learn more about insurance subsidies under the Affordable Care Act

The Health Insurance Marketplace offers a tiered system of health insurance where ACA approved health insurance plans with subsidy options are available.

There are four tiers: Bronze, Silver, Gold, and Platinum. The tiers differ by what percentage of your costs are covered by your provider after you have met your deductible.

If eligible, the Advanced Premium Tax Credit subsidy is available in any of the four tiers. The Cost-Sharing Reduction requires the selection of a Silver plan.

Plan Bronze Silver Gold Platinum
What your plan pays 60% 70% 80% 90%
Your cost 40% 30% 20% 10%
Health Insurance Subsidy Premium Tax Credit Premium Tax Credit and Cost Reduction Premium Tax Credit Premium Tax Credit

Learn more about ACA open enrollment for health insurance for individuals and families, so you know when to apply.

Plan Bonze
What your plan pays 60%
Your cost 40%
Health Insurance Subsidy Premium Tax Credit
Plan Silver
What your plan pays 70%
Your cost 30%
Health Insurance Subsidy Premium Tax Credit and Cost Reduction
Plan Gold
What your plan pays 80%
Your cost 20%
Health Insurance Subsidy Premium Tax Credit
Plan Platinum
What your plan pays 90%
Your cost 10%
Health Insurance Subsidy Premium Tax Credit

Health insurance subsidies for dental and vision

While subsidized coverage includes dental and vision for children, it may not always for adults. If you need coverage for the whole family, stand-alone dental and vision plans are also available and may provide the additional coverage you need at a budget friendly cost.

Find the right health insurance coverage option

Receive the support you need to enroll in insurance coverage. With Anthem, you will have help choosing a health insurance plan and guidance through the process of signing up for subsidized health coverage. We can even help you find out if you are eligible for savings.

Compare health insurance plans and find one that fits your needs.