Certified Application Counselor Practice Test 2025 – 400 Free Practice Questions to Pass the Exam

A Premium Tax Credit is indeed a subsidy designed to help individuals and families afford health insurance purchased through the Health Insurance Marketplace. The purpose of the credit is to reduce the overall cost of premiums, making healthcare more accessible to those who qualify based on their income and family size.

Eligible consumers can apply for this credit when filing their federal tax returns, and it can significantly decrease the amount they need to pay monthly for their health insurance coverage. By lowering the financial barrier to obtaining health insurance, the Premium Tax Credit aims to increase enrollment and improve health outcomes in the population.

The other options reflect misconceptions about health insurance mechanisms. A penalty for not having health insurance pertains to the individual mandate, which is separate from the Premium Tax Credit. An additional cost added to the premium would be contrary to the function of a subsidy, which is to reduce expenses. A one-time payment for enrolling in a Marketplace plan does not accurately describe the ongoing nature of the financial assistance provided by the Premium Tax Credit; it is specifically a reduction in the monthly payment rather than a singular incentive.