Health care credit expands eligibility in 2026

Summary#

The Health Care Affordability Act of 2025 would amend the Internal Revenue Code of 1986. Its stated goal is to expand eligibility for the refundable tax credit for coverage under a qualified health plan; it is not yet law and is at the introduced stage.

  • It removes the bill’s 400%-of-poverty-line income ceiling for eligibility under the amended provision. The bill does not set a new upper income limit.
  • It sets a sliding scale for the percentage used to calculate the credit: 0% up to 150% of the poverty line, rising by income tier to 8.5% at 400% and above. These are calculation percentages, not the percentage of insurance costs the government will always pay.
  • It also removes several other Code provisions related to affordability. Without the current text of the amended Code, their full effect cannot be verified.
  • The changes would apply to tax years beginning after December 31, 2025—starting with 2026 tax years if the bill became law.

What it means for you#

  • People seeking the credit: If you have qualifying coverage and meet the other applicable rules, the bill could make you eligible even if your household income is above 400% of the poverty line. It does not guarantee a credit or say what every person would receive.
  • People whose income is within the listed tiers: The bill would change the percentages used in calculating the credit. The percentage rises linearly within each tier, except that it is 0% up to 150% and 8.5% at 400% and above.
  • Insurers and people buying coverage: The bill does not directly set insurance prices, require anyone to buy coverage, or create a new insurance plan.
  • Taxpayers generally: The credit is refundable, but the bill does not provide a cost estimate or specify who would receive a credit in practice beyond changing the Code’s rules.

Money#

No publicly available information gives an estimate of the federal cost.

  • The bill changes eligibility and calculation rules for a refundable tax credit, which can affect federal spending or revenue.
  • It includes no appropriation, fee, fine, or cost estimate.

What is unclear#

  • The current text of the Internal Revenue Code provisions being amended was not supplied, so the full effect of the deleted affordability rules cannot be verified.
  • The bill does not show how much a person’s credit would change. That depends on rules and details not set out in the bill text provided.
  • The bill does not explain how the changes would interact with other existing coverage or assistance rules.
  • It is not yet law. Its passage and final terms are uncertain.

Case for#

  • A possible argument for the bill is that people above 400% of the poverty line would no longer be excluded by that income ceiling.
  • The sliding scale sets a stated contribution percentage by income tier, with a maximum of 8.5% for households at or above 400% of the poverty line.
  • Making the credit refundable can allow it to benefit eligible taxpayers even when the credit exceeds their income tax owed.

Case against#

  • One concern is that the bill removes the income ceiling without setting a replacement ceiling. If other conditions are met, eligibility could extend to households at any income.
  • The bill provides no estimate of the resulting federal cost or how many people might qualify.
  • Because the bill also deletes other affordability-related rules, the effect may be broader than removing the 400% income limit; the supplied material does not show the full impact.