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Congress·In Committee·7 months ago

House Bill Would Cap Health Insurance Premiums at 8.5% of Income, Expand Tax Credit Eligibility

Also known as: Protecting Health Care and Lowering Costs Act of 2025

Legislative Progress

✓ Filed
Review
House
Senate
President

Impacts

Mixed Impacts(2)
Housing Assistance
Neutral
Renter
Neutral
Positive Impacts(4)
Chronic Illness
Helps
Child Tax Credit
Helps
Small Business Owner
Helps
Gig Worker
Helps

Key Points

  • Congress would repeal certain health-related parts of a recent budget law, rolling those changes back as if they never happened.
  • The bill would expand who can get health insurance premium tax credits by removing the current income cutoff tied to the poverty line.
  • It would set a premium cost cap so eligible families generally wouldn’t have to pay more than 8.5% of their income for benchmark coverage, even at higher incomes.
  • For lower-income households, the bill keeps very low required premium shares, including 0% for people up to 150% of the poverty line.
  • These tax credit changes would start for tax years beginning after December 31, 2025, affecting coverage and taxes in 2026.
HealthcareTaxesConsumer Protection

Milestones

2 milestones2 actions
Aug 1, 2025House

Referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Aug 1, 2025

Introduced in House

What Happens Next

Projected impacts based on AI analysis

Before and during enrollment for 2026 marketplace plans

Marketplace shoppers see the new subsidy rules during 2026 open enrollment (timing depends on marketplace calendar)

When you apply for 2026 coverage, your estimated subsidy could be larger or you could become newly eligible, lowering the monthly bill you see when picking a plan.

During 2027 tax filing season for 2026 taxes

IRS forms and tax filing for 2026 reflect the new premium tax credit eligibility

When filing taxes for 2026, households may reconcile (true-up) the larger/new credit based on actual annual income, which could change refunds or amounts owed.

Related News

1 article
Thomson Reuters·6 months ago

Battle Over Health Care Tax Credits Heats Up

Democrats have proposed a permanent extension of enhanced ACA credits in the Protecting Health Care and Lowering Costs Act (S. 2556/H.R. 4849). The bill removes the 400% poverty level income cap and establishes a sliding scale to ensure premiums do not exceed 8.5% of household income.

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Source Information

Document Type

Congressional Bill

Official Title

Protecting Health Care and Lowering Costs Act of 2025

Bill NumberHR 4849
Congress119th Congress
ChamberHouse of Representatives
Latest ActionReferred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Sponsor

Cosponsors

(137)
D: 137

Analysis generated by AI. While we strive for accuracy, this should not be considered legal or professional advice. Always verify information with official government sources.