For many people, receiving Premium Assistance Payments to help cover the monthly cost of their insurance helps, but it still isn't enough. The out-of-pocket expenses that they incur when they actually use their health insurance plan can still push them beyond what they can afford. This means that "affordable care" is still not affordable enough for them. In these situations, the Affordable Care Act offers still more assistance in the form of Cost Sharing Reductions which limit the amount of out-of-pocket costs they will face.
In order to receive cost sharing reductions (out-of-pocket assistance subsidies), you must buy a Silver Plan from the state exchange, and you and your family must have an income of no more than 250 percent of the Federal Poverty Line. With this assistance a family in the lowest income group will pay no more than 6 percent of their share of out-of-pocket expenses, while a family at the upper level of the income range will pay up to 27 percent of out-of-pocket expenses.
Combining Advance Premium Tax Credits with Out-of-Pocket subsidies creates an average subsidy of about $5,000 for families and individuals. But, low-income families get larger subsidies and those with several children get the most.
The amount of assistance is broken down into three Income Level Actuarial Values. These are the amount of costs a Silver Plan will cover due to cost sharing reduction subsidies for a given percentage of the Federal Poverty Level (FPL).
- An income at 100-150% of the FPL provides a 94% Cost Sharing Reduction;
- An income at 150-200% of the FPL provides an 87% Cost Sharing Reduction;
- An income at 200-250% of the FPL provides a 73% Cost Sharing Reduction.
If you want assistance with determining if and how much of a Cost Sharing Reduction you could receive, call us at (504) 441-7283 to speak to a Dan Burghardt Health Insurance Specialist. We'll be happy to assist you to determine exactly how much assistance you qualify for and what you could save on your health insurance.