Subsidy
A subsidy is financial support from a government or another organization that lowers the cost of a product, service, or activity for the recipient. Subsidies can be delivered through direct payments, grants, tax credits, or other mechanisms. Their eligibility rules, cost, and effects depend on the program's design.
A subsidy is financial support from a government or another organization that lowers the cost of a product, service, or activity for the recipient. Subsidies can be delivered through direct payments, grants, tax credits, or other mechanisms. Their eligibility rules, cost, and effects depend on the program’s design.
Example: Eligible people who buy health insurance through the federal or state Marketplace may qualify for a premium tax credit that lowers their monthly premiums.
Common misconception: Every subsidy is a cash payment sent directly to a person. Some subsidies reduce taxes or prices, reimburse providers, or support an activity indirectly.
Sources: https://www.healthcare.gov/lower-costs/; https://www.healthcare.gov/glossary/premium-tax-credit/