Cost Sharing Reduction

If I make under a certain amount, do I qualify for better benefits?

If you make under 250% of the Federal Poverty Level (under $64,505 for a family of four), you may qualify for cost sharing reduction (CSR). This means better benefits for you at the same monthly premium. For example, instead of paying a $45 doctor visit, cost sharing may lower your doctor visit copayment down to $5. The less you make, the more cost sharing will save you at the point of service. The goal here is that people with low incomes won’t feel too big of an ouch when they go to use the services that are provided by their Covered California health care plan.

Only Available on the Silver Plan

If you qualify for cost sharing reduction through Obama Care California, you must choose a Silver Plan to take advantage of this benefit. Covered California exchange plans are “metallic plans”. From richest to least-benefits the plans are Platinum, Gold, Silver and Bronze. If you choose a Bronze Plan, your monthly premium will be the lowest, but the benefits on a Silver Plan are better, especially if you qualify for cost sharing reduction.

3 Tiers of Cost Sharing Reduction on the Silver Plan (73, 87 and 94)

The standard Silver Plan covers 70% of your out-of-pocket costs. If you qualify for cost sharing reduction, you may qualify for the Silver 73, the Silver 87, or the Silver 94. The Silver 73 covers 73% of your out-of-pocket costs, 3% more  than the standard Silver Plan. However, if you qualify for a Silver 87 or a Silver 94, you will receive 87% or 94% coverage, which is 17% or 24% more of your out-of-pocket costs than the standard Silver Plan. For those who qualify for CSR, rarely would it make sense to purchase a Gold Plan. If you qualify for the Silver 87 or 94 and you “go for the gold”, you will be paying higher premiums for less benefits. The Silver 94 is even better than the Platinum Plan, which covers 90% of your out-of-pocket costs.