What Are Health Insurance Subsidies?
Health insurance subsidies are financial assistance programs that help lower the cost of health coverage for individuals and families. These subsidies were introduced through the Affordable Care Act (ACA) to make health insurance more affordable for people who don’t get coverage through an employer and aren’t eligible for Medicare or Medicaid.
If you purchase your insurance through the Health Insurance Marketplace, you may qualify for one or more subsidies based on your income and household size.
Types of Health Insurance Subsidies
There are two primary types of ACA subsidies, and some non-ACA subsidies which will be explained below. These can significantly reduce what you pay for health coverage. The ACA Health Insurance Subsidies include:
1. Advanced Premium Tax Credit (APTC)
The Advanced Premium Tax Credit (APTC) helps lower your monthly insurance premium. The amount you receive depends on:
- Your estimated annual income
- Household size
- The cost of coverage in your state
You can apply this credit in advance to reduce your monthly insurance bill. When you file your taxes, the IRS reconciles your actual income. If you received too much, you may have to pay some back. If you received too little, you’ll get the difference as a tax refund.
2. Cost-Sharing Reductions (CSRs)
Cost-Sharing Reductions (CSRs) help lower your out-of-pocket costs when you get medical care. These include:
CSRs are only available if you enroll in a Silver-level plan through the Marketplace. The amount of assistance you get depends on your income:
| Income Range (FPL) | Plan Type | Actuarial Value | Average Annual Deductible (2024) |
|---|---|---|---|
| 100–150% FPL | CSR 94 | 94% | ~$97 |
| 150–200% FPL | CSR 87 | 87% | ~$700 |
| 200–250% FPL | CSR 73 | 73% | ~$4,500 |
You can qualify for both APTC and CSR subsidies at the same time if your income meets the criteria.
How Much Do Health Insurance Subsidies Pay For?
Health plans in the ACA Marketplace are grouped into four metal tiers: Bronze, Silver, Gold, and Platinum. Each tier reflects how you and your plan share costs.
| Plan Tier | What the Plan Pays | What You Pay | Subsidies Available |
|---|---|---|---|
| Bronze | 60% | 40% | APTC |
| Silver | 70% | 30% | APTC + CSR (if eligible) |
| Gold | 80% | 20% | APTC |
| Platinum | 90% | 10% | APTC |
What costs do Health Insurance Subsidies Help Cover?
Premium tax credits help pay for monthly health insurance premiums—the amount you pay each month to keep your Marketplace plan active. They do not help with deductibles, copayments, coinsurance, or other out-of-pocket costs.
So, they only lower the upfront monthly cost of your insurance, not what you pay when you get care.
Cost-sharing reductions (CSRs), on the other hand, help pay for out-of-pocket costs when you get medical care. These include:
- Deductibles – The amount you pay before your insurance starts covering services.
- Copayments – Flat fees for things like doctor visits or prescriptions.
- Coinsurance – Your share of the bill after you’ve met your deductible.
- Out-of-pocket maximums – The most you’ll have to pay in a year for covered services.
Who Is Eligible for Health Insurance Subsidies?
To qualify for subsidies in 2025, you must meet the following criteria:
- Income at or above 100% of the Federal Poverty Level (FPL)
- No access to affordable employer coverage
- Not eligible for Medicare, Medicaid, or CHIP
- Must be a U.S. citizen or lawfully present immigrant
- File taxes jointly if married
Your Modified Adjusted Gross Income (MAGI) is used to calculate eligibility. This includes wages, Social Security benefits, interest, and dividends.
2025 Federal Poverty Guidelines
| Household Size | 100% FPL | 250% FPL | 400% FPL |
|---|---|---|---|
| 1 | $15,060 | $37,650 | $60,240 |
| 2 | $20,440 | $51,100 | $81,760 |
| 3 | $25,820 | $64,550 | $103,280 |
| 4 | $31,200 | $78,000 | $124,800 |
If your income exceeds 250% of the FPL, you may still qualify for APTC and will pay no more than 8.5% of your income toward premiums.
Can Health Insurance Subsidies Be Used for Dental or Vision?
Subsidies can be applied to ACA health plans that include embedded dental and vision coverage. These are especially common in pediatric plans, where dental and vision coverage is required.
However, subsidies do not apply to standalone dental or vision plans.
Are There Other Types of Health Insurance Assistance?
Yes. Besides APTC and CSRs, several other programs offer help with health coverage:
Medicaid
A joint federal and state program providing coverage to low-income adults, children, and people with disabilities. Eligibility and benefits vary by state.
Medicare
A federally subsidized health program primarily for people age 65 and older, or younger individuals with qualifying disabilities. Learn more about Medicare here.
CHIP (Children’s Health Insurance Program)
Covers children in families with incomes too high for Medicaid but too low to afford private insurance.
COBRA
A temporary program that lets you keep employer-sponsored coverage after job loss or reduction in hours—though you typically pay the full premium yourself.
D-SNP (Dual Special Needs Plans)
These Medicare Advantage plans are for individuals eligible for both Medicare and Medicaid. They offer coordinated care tailored for people with chronic illnesses or special healthcare needs.
State Programs
Many states offer local programs to assist with health insurance. Visit your state’s health department or Marketplace website to explore options.
Final Thoughts
Health insurance subsidies are a powerful way to make coverage more affordable. Whether you qualify for premium tax credits, cost-sharing reductions, or additional public programs, understanding your eligibility can help you get the coverage you need at a cost you can manage.
If you’re still looking for affordable options and aren’t sure what you qualify for, get in touch! We’re dedicated to getting you the best health coverage available.
