State RegulationsNY specificDifficulty 1/5
Under the Affordable Care Act, what does a cost-sharing reduction do for an eligible enrollee?
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Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under the Affordable Care Act, a cost-sharing reduction is a subsidy that lowers what an eligible enrollee pays out of pocket when receiving care - deductibles, copayments, and coinsurance - rather than the monthly premium, which is the job of the premium tax credit. It is delivered automatically through qualifying silver plans. The two subsidies are therefore distinct forms of assistance: one cuts the premium, the other cuts point-of-care costs.
Why the other options are wrong
- A) Lowering the monthly premium is the premium tax credit's function; cost-sharing reductions act on deductibles and copayments.
- C) Enrollment timing is governed by open and special enrollment periods, not by cost-sharing reductions.
- D) The insurer's tax burden is unrelated; the reduction benefits the eligible enrollee at the point of care.
Memory hook
CSR cuts the deductible, not the premium.