Health Care Affordability Act of 2025

Bill: 119-s-46
Sponsor: full_name: Sen. Shaheen, Jeanne [D-NH]
Introduced: 2025-01-09
Policy area: Taxation
Subjects: Health care costs and insurance

Income tax credits

Tax administration and collection, taxpayers
Latest action: action_date: 2025-01-09
text: Read twice and referred to the Committee on Finance.

Summaries:
action_date: 2025-01-09
action_desc: Introduced in Senate
text: <p><strong>Health Care Affordability Act of 2025</strong></p><p>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.</p><p>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.</p><p>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.</p><p>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.</p>

tv_txt: II 119th CONGRESS 1st Session S. 46 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. Luján , 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.

1. Short title This Act may be cited as the Health Care Affordability Act of 2025 . 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: In the case of household income (expressed as a percent of poverty line) within the following income tier: The initial premium percentage is— The final premium percentage 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.