Bipartisan Premium Tax Credit Extension Act
Bipartisan Premium Tax Credit Extension Act
Plain Language Summary
# Bipartisan Premium Tax Credit Extension Act (HR 5145) - Summary **What This Bill Would Do:** This bill would extend popular health insurance subsidies for one additional year through 2026. Currently, these expanded subsidies are set to expire after 2025. The bill would allow more middle and upper-middle-income Americans to qualify for tax credits that help pay their health insurance premiums purchased through the Affordable Care Act marketplace.
Specifically, it would remove the income cap that limits who can receive these credits, allowing higher-income individuals to qualify, and maintain the increased credit amounts that help make insurance more affordable. **Who It Affects:** This primarily affects people who buy their own health insurance on the marketplace rather than getting it through an employer or government programs like Medicare. The changes would especially benefit middle to upper-middle-income households (currently earning between 400-600% of the federal poverty level) who would gain or keep eligibility for financial assistance with premiums. **Current Status:** The bill is currently in committee and has not yet been voted on by the full House. It was introduced by Representative Jennifer Kiggans (R-VA) with bipartisan support indicated by its name.
CRS Official Summary
Bipartisan Premium Tax Credit Extension ActThis bill extends for one year, through 2026, 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 extends for one year, through 2026, the elimination of the 400% maximum income limit, the lower applicable percentages, and the elimination of the inflation adjustment for the applicable percentages.
Latest Action
Referred to the House Committee on Ways and Means.