This year, many people with limited budgets will have a new item to add to their holiday shopping lists: health insurance. The virtual marketplace shelves are well-stocked with health plans for South Floridians, but if your income is between 100% and 250% of the federal poverty level, here's a savings tip to be aware of:
All of the health plans on the federally-run exchange have income-based subsidies that can substantially lower your monthly premium,. But "cost sharing," another benefit for people in your income category will help even more.
Cost sharing reductions reduce the deductibles, copays, and other out-of-pocket costs that would otherwise apply to some of a health plan's covered medical services, such as hospitalization. Unlike the income-based subsidies that reduce the cost of the monthly premium, which can be applied to any of the health plans, the cost sharing benefit applies to certain Silver plans.
These Silver plans have been modified with lower deductibles, copays, coinsurance and out-of-pocket limits compared to regular Silver plans, explains Kaiser Health News. Once the Marketplace determines you are eligible for cost sharing reductions, you will be able to select one of these modified Silver plans, based on your income level.
How much can you save with the cost-sharing benefit? Like the premium subsidy, it depends on your income and where you live, says KHN.
"To give a general idea, a typical Silver plan might have an annual deductible of $2,000 to $3,000 and an annual out of pocket limit on all cost sharing of $6,350. But if your income is between 100% and 150% of the federal poverty level, the cost sharing reductions will modify a Silver plan so that the annual deductible might be closer to $0 and the annual out of pocket limit on all cost sharing would be no more than $2,250.
If your income is between 150% and 200% of the federal poverty level, the cost sharing reductions will modify the Silver plan so that the annual deductible might be around $500 and the annual out-of-pocket limit would be no more than $2,250.
If your income is between 200% and 250% of the federal poverty level, the cost sharing reductions will be more modest. At this income level, your annual out-of-pocket limit will be reduced to no more than $5,200."