What is a premium subsidy, and who is eligible for it under the ACA?

A premium subsidy refers to financial assistance designed to help lower-income individuals afford health insurance premiums. Under the Affordable Care Act (ACA), these subsidies are specifically targeted at individuals and families whose income falls between 100% and 400% of the federal poverty level. The purpose of the subsidy is to make health insurance more accessible and affordable, ensuring that those with limited financial resources can still obtain necessary health coverage.

This assistance takes the form of a premium tax credit, which reduces the amount of money individuals and families must pay out-of-pocket each month for premiums on qualified health plans purchased through the Health Insurance Marketplace. As a result, eligible consumers can see significant savings when enrolling in a health insurance plan, making it easier to manage their healthcare costs.

The other available options do not accurately describe a premium subsidy under the ACA, as they either refer to unrelated financial mechanisms or do not specify the targeted income groups that benefit from such subsidies.