If you’re not sure what cost-sharing reductions are, you’re not alone. However, cost-sharing reductions, or CSR payments, are important in health care today. Also known as, “extra savings,” CSRs are discounts that lower your deductibles, copayments and coinsurance costs. People enrolled in Silver plans qualify for these cost reductions. Several of you may take advantage of these savings today, but recent decisions in Washington to cut funding have put the conversation around CSRs front and center. Will these changes affect you? Let’s wade through the confusion and shed light on the potential impact.
CSRs are discounts that lower your deductibles, copayments and coinsurance costs.
Cuts may affect our premium…eventually.
Premium tax credits are not in jeopardy for 2018. If you make between 150% and 400% of the federal poverty level (or up to $98,400 for a family of four), tax credits will continue to lower your premium.
If you are eligible for a premium tax credit, you also may have been eligible for a cost-share reduction to help reduce your deductible, copayment and other out-of-pocket charges. The Marketplace provides a way to check your availability.
The Federal Government reimbursed insurance companies to pay the difference for “extra savings.” Despite the recent decision to cut reimbursements, current law still requires insurance companies to offer lower price plans to eligible individuals and families. Therefore, these discounted plans will remain the same.
So how will the cease on CSR payments affect you? In anticipation of funding cuts, the State of Michigan directed insurance companies to raise the rates on their Silver Marketplace plans. That means Michigan’s Silver plans are 20% higher than previous years.
The metal matters.
The Marketplace splits plans into four metal categories: Bronze, Silver, Gold and Platinum. Silver plans have a moderate monthly premium and covers mostly routine care. If you qualified for a cost-sharing reduction, you were required to pick a Silver plan to get the extra savings.
If you plan to purchase health care coverage on the Marketplace and know you are not eligible for a Silver plan, you may find more affordable options in off-marketplace plans—particularly Bronze plans, which were not subject to the state increase. Bronze plans have the lowest monthly premium and a higher deductible making them a low-cost way to protect you from worst-case medical scenarios.
Health insurance companies like Priority Health will continue to cover policy, changes to plans, and ways to help keep costs down on quality care. For more information on cost saving options, read Q&A: Which Health Insurance Cost-Saving Option is Right for You?
