In health insurance terminology, what is a "subsidy"?

A subsidy in health insurance terminology refers to a financial assistance program designed to help reduce the cost of premiums for eligible individuals. This mechanism is crucial in making health insurance more affordable, particularly for low- to moderate-income families. Subsidies can lower the monthly payments that individuals must make for their health insurance plans, allowing broader access to necessary medical coverage.

In the context of health insurance, these subsidies are often provided through government programs, such as those established under the Affordable Care Act (ACA). By lowering the financial barrier to obtaining health insurance, subsidies play a key role in promoting overall public health and ensuring that more individuals can receive the medical care they need without facing insurmountable costs.