Reduced Cost Plans

If you’ve applied for individual coverage through the healthcare.gov marketplace hopefully you understand how tax subsidy’s work (based on your household size and income you may or may not be eligible to have the federal government assist you in paying for your health insurance). After going through the application process you can find out if you qualify for a subsidy and start looking at plans. You may see under the plan name reduced cost plan. What does that mean?

Reduced cost may also be known as cost sharing reduction. Based on the household information you had to put in for the application you may be eligible for lower cost deductibles, co payments or co insurance. If your income falls under a certain percentage of the Federal Poverty Limit (click on link below to see chart) health insurance companies on the Marketplace must lower your out of pocket expenses.

When looking at these reduced cost plans you may be confused as the Marketplace does not always differentiate the actual amount you will pay as far as out of pocket medical bills go. If you click on the summary of benefits you may see different numbers than you saw on the first page with the name of the plan. Follow what you originally saw as the summary of benefits page is not always updated with correct information.

To make sure you understand how reduced cost plans work and know exactly what your paying for make sure to contact your local Health Insurance Specialists.

To view the federal poverty limit chart and see if you qualify for these reduced cost benefits click on the link, Federal Poverty Limit Chart & Explanation.

Written by Patrick, a contributing writer and employee of the Health Insurance Specialists, Inc.

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