State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
An enrollee with household income between 138% and 250% of FPL selects a Silver plan through Covered California. What does the Cost-Sharing Reduction (CSR) subsidy do?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Cost-Sharing Reduction (CSR) is available to eligible enrollees with income between 138% and 250% of FPL who choose a Silver plan. It lowers out-of-pocket costs — deductibles, copayments, and coinsurance — which effectively raises the actuarial value of the Silver plan (for example, Silver 73, Silver 87, Silver 94 designs). CSR is available only on Silver plans, which is why a Silver plan is the required choice. It does not touch the premium; premium assistance is handled separately through the Advanced Premium Tax Credit (APTC), which is paid to the insurer.
Why the other options are wrong
- B) CSR affects cost sharing, not premiums; reducing monthly premiums is the role of the APTC, and even that does not necessarily bring premiums to zero.
- C) CSR makes the Silver plan more generous by lowering cost sharing; it does not downgrade the plan to a Bronze level of coverage.
- D) Premium assistance is paid to the insurer on the enrollee's behalf; CSR is an out-of-pocket cost reduction, not a premium payment to the individual.
Memory hook
Silver + CSR = cheaper visits, not cheaper premium. Income 138-250% picks Silver to get it.