The premium tax credit lowers the monthly bill
It is calculated from your household income, your household size, and the cost of the benchmark Silver plan in your specific county. It can be taken in advance, applied straight to your monthly premium, or claimed later on your tax return. Taking it in advance is what almost everyone does, and it is why the price you see on a comparison site before entering income is meaningless.
Cost-sharing reductions lower what you pay at the counter
This is the one people miss. If your household income lands roughly between 100% and 250% of the federal poverty level, a Silver plan gives you a lower deductible, lower copays and a lower out-of-pocket maximum, at the ordinary Silver premium. It attaches to Silver and nothing else. Choosing Bronze to save twenty dollars a month can quietly cost you thousands in a bad year.
Why we recheck every year
The benchmark plan changes, the poverty guidelines change, carriers enter and leave counties, and your income moves. A plan that auto-renews is not the same deal it was last November. We look at yours again each season rather than letting it roll, and we tell you if it got worse.
The part that catches people out
If you take the credit in advance and your income ends up higher than you estimated, some of it can be reconciled back at tax time. That is not a reason to lowball your estimate, it is a reason to give us a realistic figure and to ring us if your income changes mid-year. Updating it in March is painless. Discovering it in April is not.