Official Summaries

Health Care Affordability Act of 2025

This bill makes permanent temporary changes enacted by the American Rescue Plan Act of 2021 (ARPA) and the Inflation Reduction Act of 2022 (IRA) that generally expand eligibility for and increase the amount of the premium tax credit.

Currently, eligible taxpayers may be able to claim the premium tax credit, which applies toward the cost of obtaining health insurance through health insurance exchanges. To be eligible for the premium tax credit, a taxpayer’s household income must meet or exceed 100% of the federal poverty level (FPL) and, after 2025, may not exceed 400% of the FPL (maximum income limit). For 2021-2025, the ARPA and IRA eliminated the maximum income limit, which generally expands eligibility for the premium tax credit.

Further, under current law, the amount of the premium tax credit is (1) generally the plan premium (conditions apply), minus (2) the taxpayer’s household income multiplied by the applicable percentage. The applicable percentage is a specific percentage that varies depending on which of six income ranges (adjusted for inflation after 2025) the taxpayer’s household income falls within. For 2021-2025, the ARPA and IRA lowered the applicable percentages and eliminated the adjustment of the applicable percentages for inflation, which generally increases the amount of the premium tax credit.

The bill makes permanent the elimination of the 400% maximum income limit, the lower applicable percentages, and the elimination of the inflation adjustment for the applicable percentages.

Current Full Text

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 46 Introduced in Senate (IS)]

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119th CONGRESS
  1st Session
                                 S. 46

 To amend the Internal Revenue Code of 1986 to expand eligibility for 
   the refundable credit for coverage under a qualified health plan.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            January 9, 2025

  Mrs. Shaheen (for herself, Ms. Baldwin, Mr. Schumer, Mr. Wyden, Mr. 
Blumenthal, Mr. King, Ms. Hassan, Mr. Welch, Mr. Kaine, Mr. Coons, Ms. 
  Warren, Mr. Durbin, Mrs. Murray, Mr. Warnock, Mrs. Gillibrand, Mr. 
Reed, Ms. Duckworth, Mr. Van Hollen, Ms. Cortez Masto, Mr. Schatz, Mr. 
 Padilla, Ms. Smith, Ms. Klobuchar, Ms. Rosen, Mr. Kelly, Mr. Booker, 
 Mr. Whitehouse, Mr. Merkley, Mr. Schiff, Mr. Warner, Mr. Markey, Mr. 
   Lujan, Ms. Hirono, Mr. Bennet, Mr. Hickenlooper, Mr. Peters, Mr. 
   Fetterman, Mr. Heinrich, Mr. Kim, and Ms. Slotkin) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to expand eligibility for 
   the refundable credit for coverage under a qualified health plan.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Health Care Affordability Act of 
2025''.

SEC. 2. INCREASE IN ELIGIBILITY FOR CREDIT.

    (a) In General.--Subparagraph (A) of section 36B(c)(1) of the 
Internal Revenue Code of 1986 is amended by striking ``but does not 
exceed 400 percent''.
    (b) Applicable Percentages.--
            (1) In general.--Subparagraph (A) of section 36B(b)(3) of 
        the Internal Revenue Code of 1986 is amended to read as 
        follows:
                    ``(A) Applicable percentage.--The applicable 
                percentage for any taxable year shall be the percentage 
                such that the applicable percentage for any taxpayer 
                whose household income is within an income tier 
                specified in the following table shall increase, on a 
                sliding scale in a linear manner, from the initial 
                premium percentage to the final premium percentage 
                specified in such table for such income tier:


------------------------------------------------------------------------
                                                The initial   The final
 ``In the case of household income  (expressed    premium      premium
   as a percent of poverty line)  within the     percentage   percentage
            following income tier:                  is--         is--
------------------------------------------------------------------------
Up to 150 percent.............................            0            0
150 percent up to 200 percent.................            0          2.0
200 percent up to 250 percent.................          2.0          4.0
250 percent up to 300 percent.................          4.0          6.0
300 percent up to 400 percent.................          6.0          8.5
400 percent and higher........................          8.5      8.5.''.
------------------------------------------------------------------------

            (2) Conforming amendments relating to affordability of 
        coverage.--
                    (A) Paragraph (1) of section 36B(c) of such Code is 
                amended by striking subparagraph (E).
                    (B) Subparagraph (C) of section 36B(c)(2) of such 
                Code is amended by striking clause (iv).
                    (C) Paragraph (4) of section 36B(c) of such Code is 
                amended by striking subparagraph (F).
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2025.
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