What Is Health Insurance Premium Credit? 
Health insurance premium credits are one form of redistribution built into the Affordable Care Act . Cost sharing subsidies are the other form . The objective is to make having health insurance more affordable for people in lower income brackets . Both subsidies hinge upon the family 's modified adjusted gross income relative to the federal poverty level . Subsidies phase in for families at 100 % of the federal poverty level , and phase out for families at 400 % and above . The government pays a portion of the health insurance through premium credits , based upon the family 's projected income . 