What is “cost-sharing reduction” (CSR)?

Cost-sharing reduction (CSR) refers specifically to a form of financial assistance aimed at lowering out-of-pocket costs for qualified individuals, which include expenses like deductibles, copayments, and coinsurance associated with health insurance. This assistance is crucial for individuals purchasing health insurance through the Health Insurance Marketplace who meet certain income criteria. By reducing these costs, CSRs make healthcare more affordable and accessible for those who otherwise might struggle with high deductibles or copayments.

The other options do not accurately represent the concept of cost-sharing reductions. There are no programs that offer full coverage to everyone, as healthcare costs must still be managed systematically and targeted towards those most in need. Additionally, discounts on insurance premiums are different from CSRs, as they specifically focus on out-of-pocket costs associated with utilizing healthcare services rather than reducing the premium itself. Lastly, CSR programs do not provide subsidies for funding insurance companies directly; instead, they are designed to support eligible consumers in managing their healthcare expenses.