Explain "cost-sharing reduction" in health insurance.

Cost-sharing reduction refers to a subsidy designed to decrease out-of-pocket expenses for eligible individuals when they use healthcare services. This is particularly relevant within the context of the Affordable Care Act, where such reductions are provided to lower income individuals who purchase health insurance through the health insurance marketplace.

Eligible individuals benefit from decreased deductibles, copayments, and coinsurance, which allows them to access necessary medical services without facing prohibitive costs. This financial assistance is crucial for promoting access to healthcare, ensuring that lower-income individuals can afford care without incurring unsustainable debt.

Understanding the nature of cost-sharing reductions is important as it directly influences how accessible healthcare is for vulnerable populations, ultimately aiming to improve health outcomes by encouraging individuals to seek necessary medical attention without financial hesitation.