S.46 - Health Care Affordability Act of 2025 (119th Congress)
Summary
The Health Care Affordability Act of 2025 (S.46) aims to amend the Internal Revenue Code of 1986 to expand eligibility for the refundable credit for coverage under a qualified health plan. Specifically, it seeks to remove the income cap of 400 percent of the poverty line for eligibility and adjust the applicable percentages used to calculate the credit amount. The bill proposes a sliding scale for premium percentages based on household income relative to the poverty line.
Expected Effects
If enacted, this bill would likely increase the number of individuals and families eligible for financial assistance in obtaining health insurance through the Affordable Care Act (ACA) marketplaces. This could lead to higher enrollment rates and potentially lower out-of-pocket healthcare costs for those who qualify. The changes would apply to taxable years beginning after December 31, 2025.
Potential Benefits
- Increased Access to Healthcare: More individuals and families, particularly those with incomes above 400% of the poverty line, could gain access to affordable health insurance.
- Reduced Financial Burden: Lower premium costs for eligible individuals and families due to the expanded tax credit.
- Improved Health Outcomes: Increased access to healthcare coverage may lead to better preventative care and management of chronic conditions.
- Greater Financial Security: Reduced risk of medical debt and financial hardship associated with unexpected healthcare costs.
- Simplification of the System: Removing certain affordability-related provisions could streamline the process of determining eligibility for the tax credit.
Potential Disadvantages
- Increased Government Spending: Expanding eligibility for the tax credit could lead to higher federal expenditures.
- Potential Tax Increases: To offset the increased spending, taxes may need to be raised or other programs cut.
- Market Distortions: The expanded tax credit could further distort the health insurance market, potentially leading to higher premiums for some.
- Complexity of Implementation: Implementing the new sliding scale for premium percentages could be complex and require significant administrative resources.
- Uncertainty of Long-Term Effects: The long-term effects on healthcare costs, enrollment rates, and the overall stability of the ACA marketplaces are uncertain.
Most Disadvantaged Areas:
Constitutional Alignment
The bill appears to align with the general welfare clause of the Constitution (Preamble), which empowers Congress to "promote the general Welfare." By expanding access to healthcare, the bill aims to improve the well-being of the population. Additionally, Article I, Section 8, Clause 1 grants Congress the power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).