In the marketplace for healthcare, the ACA, there are programs designed to reduce the cost of coverage. These programs provide cost reduction based on an applicant income and other factors.
Advanced Premium Tax Credit and Cost-Sharing Reduction are two such programs. They essential lower the cost of healthcare coverage. The first, the Advanced Premium Tax Credit functions by reducing the monthly premium an applicant would be charged by a healthcare provider, because this tax credit would be paid in "advance" to the provider. So for example if your policy cost $395.00 dollars per month and your tax credit was $300.00 dollars per month, you would only need to pay the $95.00 to the provider .
The cost-sharing reduction works a little differently. This reduction effects the out of pocket cost when a policy holder receives service. By reducing or " sharing " the proportion the policyholders would be responsible for.
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