Saving money on Marketplace coverage

It starts with your household and your income estimate

When you apply, the Marketplace asks who is in your household and what you expect your household to earn in the year you want coverage. Those two answers decide what help you get.

• Your household is you, your spouse if you're married, and anyone you'll claim as a tax dependent, even people who don't need coverage.
• A good starting point for your income estimate is your household's adjusted gross income from your last tax return, updated for any changes you expect.
• HealthCare.gov has an income calculator to help you make your best estimate.

The premium tax credit lowers your monthly bill

If you qualify, the premium tax credit lowers the monthly premium you pay. You can use all of it, some of it, or none of it each month. When you use it up front, the Marketplace sends it straight to your insurance company, so your bill is smaller. This is called an advance payment of the premium tax credit.

When you file your federal taxes, the credit is checked against your actual income for the year. If you used more than you qualified for, you pay back the difference. If you're worried about owing money, you can choose to use less of the credit each month.

Cost-sharing reductions lower what you pay for care

Some people also qualify for extra savings called cost-sharing reductions. These lower your deductible, your copays and coinsurance, and your out-of-pocket maximum, so your plan starts paying sooner and your costs are capped lower in a hard year.

The catch: you only get these savings if you pick a Silver plan. You can still use your tax credit with a Bronze, Gold, or Platinum plan, but you'll give up the extra savings. The lower your income within the qualifying range, the more you save.

When your life changes, your savings change

• If your income goes up or someone leaves your household, you'll probably qualify for less help. Using less of your credit each month can keep you from owing at tax time.
• If your income goes down or someone joins your household, you'll probably qualify for more.
• Either way, report the change to the Marketplace as soon as it happens.

If your income is too high for the credit

You can still buy a Marketplace plan at full price, or shop for a plan outside the Marketplace, where you may find more options. Catastrophic plans never come with the tax credit, whatever your income.