Subsidies to make insurance more affordable and increase insurance coverage are a key element of any health reform plan.  However, the structure of the subsidies can vary widely as will the level of assistance provided.  The policy decisions made about subsidies are critical to the number of people eligible for subsidies, how much assistance is provided, and the cost of reform.  Subsidies may be available only to those meeting specific criteria, such as those without another source of coverage or to those with low or moderate incomes, or they may be made available to all individuals who purchase insurance. Subsidies for health insurance require a fine balance between the cost of providing the subsidies and the gain in the number of people with insurance.  As the subsidy level moves up the income scale, more individuals who would have purchased coverage on their own benefit from the subsidy. Because subsidies make up the majority of the cost of comprehensive health reform, they are a key element of reform in terms of both policy and politics. 

Full report:  Explaining Health Care Reform: What Are Health Insurance Subsidies (PDF | 327.92 KB)

Kaiser Family Foundation. (2009). Explaining health care reform: what are health insurance subsidies.