CSRs raise the actuarial value of a plan and limit the maximum out-of-pocket costs (Norris, 2019). As shown in Table 11.2, CSRs increase the actuarial value by having plans pay a higher percentage of service costs based on income level. The standard maximum out-of-pocket costs are based on health savings accounts limits and are indexed annually. CSRs set lower out-of-pocket maximums based on the scale in Table 11.3, which results in lower cost-sharing obligations (i.e., deductibles, copayments, coinsurance). For example, in 2020, enrollees with incomes between 100% and 200% of the FPL have a maximum out-of-pocket limit of \($2700,\) compared to \($8150\) for an unsubsidized individual (Norris, 2019).

Unlike premium subsidies, CSRs are available only if enrollees sign up for a silver plan. The subsidy is automatically included in the cost when an eligible individual shops for a plan. Low-income individuals may be better off choosing a higher-premium silver plan than a low- or zero-premium bronze plan, based on the value of the CSR (Norris, 2019).

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TABLE 11.2 Cost-Sharing Subsidy Schedule Income Level by Federal Poverty Level (FPL) Actuarial Value 100%-150% 150%-200% 200%-250% 94% 87% 73% TABLE 11.3 Out-of-Pocket Spending Limits Income Level by Federal Poverty Level (FPL) 100%-200% 200%-300% 300%-400% Out-of-Pocket Spending Limit 2/3 of maximum 1/2 of maximum 1/3 of maximum