Most people shopping the Marketplace sort by premium, pick the cheapest plan on the screen, and never learn that they threw away several thousand dollars of federal help by doing it. That is the cost-sharing reduction, and it is invisible until you click into a silver plan.
A premium tax credit lowers what you pay every month. A cost-sharing reduction lowers what you pay when you actually use the plan. They are separate benefits with separate rules, and the second one has a hard condition attached: silver only.
Every figure below was pulled on September 6, 2026 from the CMS guidance, the federal rule and the regulations that set it.
What a Cost-Sharing Reduction Actually Is
HealthCare.gov describes it as saving money a second way, by paying less out of pocket each time you get medical services. That undersells the mechanics.
Under 45 CFR 156.420, an issuer that offers a silver plan on an Exchange must also file three variations of it. Each variation covers the same benefits and the same providers as the standard plan, but with lower cost sharing and a lower annual limitation on cost sharing. The variations are pinned to actuarial values of 94%, 87% and 73%, against about 70% for the standard silver plan.
Actuarial value is the share of total covered costs the plan pays across a standard population. A 94% silver variant is, in cost-sharing terms, richer than any platinum plan sold on the Marketplace. You pay the silver premium and get a plan that behaves like something far more expensive.
You do not apply for it separately. If your income qualifies you and you pick a silver plan, the Marketplace enrolls you in the variant automatically.
The Three Variants and Their Real Numbers
The reduced ceilings are set annually. CMS finalized the 2026 figures in the Marketplace Integrity and Affordability rule published June 25, 2025, and published the 2027 figures in guidance dated January 29, 2026.
| Silver variant | Household income | 2026 out-of-pocket max (self-only / family) | 2027 out-of-pocket max (self-only / family) |
|---|---|---|---|
| 94% AV | 100% to 150% FPL | $3,500 / $7,000 | $4,000 / $8,000 |
| 87% AV | Over 150% to 200% FPL | $3,500 / $7,000 | $4,000 / $8,000 |
| 73% AV | Over 200% to 250% FPL | $8,450 / $16,900 | $9,600 / $19,200 |
| Standard silver, no CSR | Over 250% FPL | $10,600 / $21,200 | $12,000 / $24,000 |
Two things to notice. The 94% and 87% variants share a ceiling because CMS applies the same two-thirds reduction to both bands, and the 73% variant gets only a one-fifth reduction, because a larger cut would push the plan’s actuarial value above the 73% the statute allows.
The gap is the point. In 2026, moving from standard silver to a 94% silver variant cuts your worst possible year from $10,600 to $3,500. For the mechanics of that ceiling, see out-of-pocket maximum.
Deductibles move just as hard. KFF’s cost-sharing reduction explainer, last updated June 26, 2025, reports average silver deductibles falling from $4,902 on a standard silver plan to $87 for enrollees under 150% of poverty, $682 between 150% and 200%, and $3,620 between 200% and 250%. An $87 deductible is functionally no deductible. Compare that against what a normal plan asks on health insurance deductible, and note that copays and coinsurance drop too, which is covered on copay vs coinsurance.
Who Qualifies
45 CFR 155.305(g) sets three conditions. You must be eligible to enroll in a qualified health plan through the Exchange, you must meet the requirements for advance payments of the premium tax credit, and your expected household income must not exceed 250% of the federal poverty line.
Then comes the condition that trips everyone: paragraph (g)(1)(ii) says the Exchange may only provide cost-sharing reductions to an enrollee who is not an Indian if that person is enrolled in a silver-level qualified health plan.
Here is what the income bands work out to in dollars. HHS ASPE published the 2026 poverty guidelines at $15,960 for one person, $21,640 for two, $27,320 for three and $33,000 for four in the 48 contiguous states and DC. The Marketplace applies the prior year’s guidelines to a coverage year, so these figures govern 2027 eligibility.
| Household size | 100% FPL | 150% FPL | 200% FPL | 250% FPL |
|---|---|---|---|---|
| 1 | $15,960 | $23,940 | $31,920 | $39,900 |
| 2 | $21,640 | $32,460 | $43,280 | $54,100 |
| 3 | $27,320 | $40,980 | $54,640 | $68,300 |
| 4 | $33,000 | $49,500 | $66,000 | $82,500 |
In states that expanded Medicaid, CMS notes that consumers under 138% of poverty may be routed to Medicaid instead of a Marketplace plan.
The Separate Rules for American Indians and Alaska Natives
45 CFR 155.350 sets up a different and more generous track. An Exchange must find an applicant who is an Indian eligible for cost-sharing reductions if their expected household income does not exceed 300% of the poverty line, and 45 CFR 156.420(b) requires issuers to file a variation of every plan at every metal level with all cost sharing eliminated for those enrollees.
There is also a rule that ignores income entirely. Under section 1402(d)(2) of the ACA and 155.350(b), any American Indian or Alaska Native Marketplace enrollee gets no cost sharing on items and services furnished directly by the Indian Health Service, an Indian Tribe, Tribal Organization or Urban Indian Organization, or through referral under contract health services, at any income level and at any metal level.
That is the one situation where the silver-only rule does not bind. Everyone else has to buy silver.
The Trap: CSRs Are Wasted on Bronze and Gold
On the plan comparison screen, a $0-premium bronze plan looks like a free lunch and a silver plan with a $30 premium looks like a worse deal. For anyone under 250% of poverty it is usually the reverse.
CMS makes the case in its own agent and broker resource, which does not state a plan year, so read the dollars as an illustration of the shape rather than as current pricing. In its Scenario One, a 20-year-old in Lubbock County, Texas at 175% of poverty can take a $0-premium bronze plan with a $4,000 deductible and an $8,700 out-of-pocket maximum, or a silver plan for $5.73 a month with a $1,800 deductible and an $1,800 out-of-pocket maximum. In a high-use year the bronze plan costs $8,700 and the silver plan costs $1,869. The $5.73 buys almost $7,000 of protection.
CMS’s own guidance to brokers is that on some platforms $0-premium bronze plans are the first thing consumers notice, and that the only way to capture income-based CSRs is to enroll in a silver plan. HealthCare.gov says the same thing in consumer language: if you enroll in another plan category you can still use the tax credit, but you will not get the extra savings.
Gold is the same mistake in a nicer suit. A gold plan has a higher actuarial value than a standard silver plan, so it looks like an upgrade. But a 94% or 87% silver variant beats gold on cost sharing outright, and it usually costs less. Below 250% of poverty, silver is not a compromise. It is the answer.
Silver Loading, and Why Gold Wins Above 250%
Above the cutoff, the logic flips completely, and the reason is a fight that ended in 2017.
In October 2017 the federal government stopped reimbursing insurers for the cost-sharing reductions they were still legally required to deliver. The Attorney General’s legal opinion that month concluded HHS had no congressional appropriation for the payments, and the rule text CMS published in 2025 still cites that opinion in a footnote to the CSR section.
Insurers did not stop providing CSRs, because the ACA still requires them. They repriced instead. Most state regulators allowed the cost to be loaded onto silver premiums only, since CSRs attach only to silver. KFF estimates that silver loading pushed benchmark silver premiums up roughly 17 percentage points more than bronze between 2017 and 2018.
The lasting artifact shows up in the current national averages. KFF’s 2026 data for a 40-year-old puts the lowest-cost gold plan at $615 a month against $625 for the benchmark silver plan and $611 for the lowest-cost silver plan. Gold, the richer tier, is cheaper than the benchmark.
So the decision rule is clean:
- At or under 250% of poverty: buy silver. The variant is worth more than any premium difference on the screen.
- Above 250% of poverty: price gold against silver directly, because silver carries a loaded premium and gives you nothing back. Compare the plan types on HDHP vs PPO before deciding.
When Your Income Changes Mid-Year
CSR eligibility is based on your expected household income for the coverage year, so an income change can move you between variants or out of them entirely.
HealthCare.gov states that if you have a silver plan and lose your cost-sharing reductions, you qualify for a Special Enrollment Period and can switch to a bronze, silver or gold plan. That is worth acting on: once the reduction is gone, the silver-loaded premium is no longer buying you anything. The broader rules on mid-year switches are on qualifying life event.
The reverse case matters more. If your income drops, report it. A household that slips from 260% to 190% of poverty goes from a $10,600 ceiling to $3,500 for 2026, and the Marketplace will not make the switch for you.
The Bottom Line
Cost-sharing reductions are the most valuable benefit in the Marketplace that people routinely decline by accident. If your household income is at or under 250% of the federal poverty line, which is $39,900 for one person and $82,500 for a family of four under the 2026 guidelines, buy a silver plan and take the variant. For 2026 it caps your worst year at $3,500 self-only under 200% of poverty and $8,450 between 200% and 250%; for 2027 those become $4,000 and $9,600. Above 250%, silver is the loaded tier and gold is often literally cheaper. If none of this is reachable for you right now, uninsured start here and free clinics and sliding-scale care are the next stops, and buyers pricing their own coverage should read self-employed health insurance cost and health insurance for early retirees.