In the context of health insurance, what does "subsidy" mean?

The term "subsidy" in the context of health insurance specifically refers to financial assistance that is designed to help individuals and families afford their premiums. This financial support can make health insurance more accessible for those who might struggle to pay the full cost on their own. In many health insurance programs, particularly those established under the Affordable Care Act, subsidies are provided based on income levels, allowing qualifying individuals to reduce the amount they pay for their monthly premiums.

This form of assistance plays a crucial role in ensuring that health coverage is affordable and that individuals do not forgo necessary health care due to cost barriers. By reducing the out-of-pocket expense for premiums, subsidies help increase the overall enrollment in health insurance plans, leading to better health outcomes and financial security for families.

The other options touch on different aspects of health care costs but do not accurately define the term "subsidy". For example, fees charged for accessing health plans, discounts for cash payments, and tax benefits for insurance companies pertain to different financial interactions within the health care system, but none align with the specific purpose and nature of a subsidy, which is fundamentally about aiding individuals in affording their premiums.