Which term describes a provision that reduces out-of-pocket costs such as deductibles and copays for Marketplace health plans?

• A. Cost Sharing Reduction
• B. Advance Premium Tax Credit
• C. National Health Expenditure
• D. Diagnosis-Related Group

Answer: (A)

In Marketplace plans, a subsidy that lowers what you pay out of pocket for care—such as deductibles, copays, and coinsurance—is called a cost sharing reduction. This assistance typically helps people with incomes between 100% and 250% of the federal poverty level who enroll in a Silver plan, making everyday medical costs more affordable. It’s separate from premium tax credits, which reduce monthly premiums rather than out-of-pocket costs. The other terms refer to different concepts: a general hospital payment method used in Medicare (Diagnosis-Related Group) and overall health spending (National Health Expenditure).