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Health Care Reform:

Health Insurance & Affordable Care Act

Back to ACA Health Insurance Terms List


A subsidy is a type of financial aid to help you pay for insurance sold through your state's health insurance Marketplace. Under the Affordable Care Act, there are two types of subsidies:

  • Tax credits to lower your premium, which is the amount you have to pay each month for insurance. Despite the name, you may get this money right away to help you. You don't have to wait until you file taxes to get it. The level of the subsidy is tied to your income level.
  • Cost-sharing subsidies to lessen how much you have to pay when you get health care. This subsidy may lower your deductibles so your health plan starts helping pay for your care faster. It may also lower how much you have to pay when you see a doctor or buy a prescription medicine.

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