Explaining Health Care Reform: What Are Health Insurance Subsidies
The cost of health insurance makes health coverage unaffordable for many lower
and moderate income families, especially if they are not offered health benefits
through their jobs. This issue brief explains how government subsidies—an
integral part of most major health reform plans under consideration in Congress—work in making coverage more affordable, protecting lower income people from
high out-of-pocket costs and encouraging broad participation in health
insurance.
The brief examines the different ways that premium and
cost-sharing subsidies can be structured and focuses on new subsidies being
considered for people buying coverage on their own (perhaps through an insurance
exchange). Premium subsidies, in particular, are important because they are a
prime determinant of how many people will gain coverage through various reform
plans and because they account for a large portion of the cost of any health
reform proposal that significantly increases health coverage.
