What is the purpose of CSR in health insurance?

The purpose of CSR, or Cost-Sharing Reduction, in health insurance specifically aims to limit out-of-pocket costs for eligible individuals. CSRs are designed to help lower income individuals and families who purchase health insurance through the marketplace. By providing these reductions in co-payments, deductibles, and other out-of-pocket expenses, CSRs make healthcare more affordable for those who might otherwise struggle to pay for necessary medical services. This enhancement allows consumers to access their benefits more effectively, thereby supporting their overall health and financial well-being.

Other options do not accurately reflect the intent of CSRs. For instance, providing free insurance for all children or focusing on comprehensive coverage for pre-existing conditions does not capture the specific financial support that CSRs are meant to provide. Furthermore, CSRs do not aim to increase premiums for high earners, as that would contradict the intention of making health insurance accessible and affordable for lower-income individuals. The focus of CSRs is on reducing costs directly rather than altering premiums or coverage structures to accommodate different income levels.