How to Reduce Out-of-Pocket Expenses with Cost Share Reductions

Cost share reductions are one of the most frequently misunderstood reductions offered under the new Healthcare Reform Law. Many mistakenly think that cost share reductions can help to lower health insurance premiums. This is not the case. Cost share reductions are not health insurance subsidies, and do not apply to your monthly premium. Rather, cost share reductions are an added benefit that you may receive, in addition to a premium subsidy, that will help to a reduce in the actual out-of-pocket expenses that you will have to pay when receiving covered medical care.

As part of healthcare reform, families with low incomes may qualify to receive certain cost share reductions through the Affordable Care Act that limit the amount they have to pay towards deductibles, coinsurance and copayments. Those who qualify for cost share reductions will be offered these out-of-pocket expenses at reduced rates.

Qualifying for Cost Share Reductions:

If a family’s household income is between 100% and 250% of the federal poverty level, the family may receive, in addition to a federal subsidy, a cost share reduction that reduces the amount of money that have to pay towards deductibles, coinsurance and copayments before their health insurance plan begins to pay. For example, a Blue Cross and Blue Shield of North Carolina® health insurance plan that normally has a copayment of $30 with a primary care physician, may only require you to make a $5 copayment if you qualify for a cost share reduction. Others with the same plan, whose incomes are too great to qualify for a cost share reduction, will be required to pay the full $30.

Cost share reductions are not available for all medical plans. Only silver plans purchased on the Health Insurance Marketplace offer cost share reductions. If your household income meets the threshold for receiving a cost share reduction, you will have to purchase a silver plan through the federal marketplace to utilize it. Silver plans do have higher premiums than Bronze plans. So you will want to do some math to determine if the cost share reductions you will receive on a silver plan are enough to offset the slightly higher premium payment.

Healthcare reform has made it possible for those families with limited incomes to acquire affordable health insurance. If you have an interest in reducing your family’s out-of-pocket expenses, and you think you may qualify for cost share reductions, stop in to speak with a healthcare reform advisor at The Asheville Blue Cross Blue Shield of North Carolina® Store today.