In an effort to make access to healthcare insurance more affordable, the Affordable Care Act used two cost reduction methods: tax credits and cost-sharing reductions. Tax credits are available to individuals on a sliding scale from 100 percent of the federal poverty level (FPL) to 400 percent of the FPL and are used to offset the cost of a health insurance premium. In addition to tax credits, cost-sharing reductions (CSRs) are available to individuals on a sliding scale from 100 percent of the FPL to 250 percent of the FPL. CSRs limit exposure to deductibles, co-payments, and coinsurance when individuals access services covered by the health insurance plan. CSRs are available only if an individual selects a silver plan (70-percent actuarial value, or A/V) through the Health Insurance Marketplace.
The graphics illustrate the level of CSR protection for individuals with incomes between 100 and 250 percent of the FPL. Despite the president’s recent decision to halt reimbursement to insurers for offering CSRs, these protections for consumers are still available because insurers are required to provide them. Insurers, including those in Arkansas, have responded with increased premiums for 2018 to offset the cost.