Cost-sharing reductions are available to people who buy a so-called silver plan on government-run Obamacare exchanges, and who earn between 100 and 250 percent of the poverty level, or $11,880 and $29,700 for a single person. Silver plans are ones that, on average, cover 70 percent of their customers' health costs, with the customer being responsible for paying the balance of the charges out of pocket, in the form of deductibles, copays and coinsurance.
The Obamacare cost-sharing aid means that qualified customers will only owe between 6 percent and 27 percent of their medical costs, and not the average 30 percent that other, higher-income customers would personally pay.
The Commonwealth Fund analysis looked at median out-of-pocket costs for a 40-year-old nonsmoking man who was enrolled in silver plans in 38 markets served by the federally run Obamacare marketplace HealthCare.gov.
The analysis found that the median deductible for an enrollee earning $25,000 per year would be $2,500, compared to a median deductible of $3,500 for a man who earns $35,000 annually or more, and doesn't qualify for the cost-sharing reductions. If the same man earned $17,000 annually, his deductible would be just $125.
The maximum caps on a person's annual total out-of-pocket spending under their Obamacare plan likewise is sharply reduced as incomes get lower if they qualify for cost-sharing aid, the analysis noted.
The median out-of-pocket limit for 38 silver plans is $6,500. But with cost-sharing subsidies, a man who earns $25,000 annually would have an out-of-pocket cap of $5,000. The cap would drop to $1,850 for an enrollee who earns $20,000, and just a $650 cap for a man who earns $17,000.
Collins said some, if not many, people who benefit from the cost-sharing reductions might not even be aware of them, because the insurer is directly reimbursed by the federal government for lowering the out-of-pocket costs for qualified enrollees, who don't see the nonsubsidized price they would otherwise be paying.