No Income Cap for Health Subsidies: Bill Expands Premium Tax Credits Starting 2026

The “Protecting Health Care and Lowering Costs Act of 2025” is making a big swing at health insurance affordability, specifically targeting the Premium Tax Credit (PTC)—the subsidy that helps people buy insurance on the marketplace. If you’ve ever looked at your income and realized you made just too much money to qualify for help, this bill is aimed squarely at you.

The End of the Subsidy Cliff

Right now, if your household income ticks over 400% of the Federal Poverty Level (FPL)—which translates to roughly $60,240 for an individual or $124,800 for a family of four in 2024—you fall off the “subsidy cliff.” You lose all help and have to pay full price for premiums. Section 3 of this bill completely eliminates that 400% FPL cap. Starting in the 2026 tax year, the government is essentially saying that anyone, regardless of how much they earn, can potentially qualify for some level of premium assistance if their health insurance is deemed too expensive.

This is a massive change for middle- and upper-middle-class families, particularly those in high-cost areas or those with expensive health needs. If you’re a small business owner or a contractor making $150,000 but facing $30,000 in annual premiums, the old system offered zero relief. The new system means you’d get a tax credit to ensure your premium contribution doesn't exceed a certain percentage of your income. The bill also changes the math used to calculate that subsidy, moving from a rigid table to a “linearly” increasing sliding scale. This means the percentage of your income you’re expected to pay for coverage will adjust smoothly, avoiding those painful jumps in payment responsibility that happen under the current setup. The goal is a fairer, more predictable subsidy amount across all income levels.

Hitting the Undo Button on Past Legislation

While the subsidy expansion is the headline, Section 2 is the mystery box. It completely repeals Subtitle B of Title VII from a previous reconciliation act. Think of it like taking a specific chapter out of a law book and shredding it. The problem is that the bill doesn't specify what those provisions were. When you wipe out a section of law, you also wipe out any rules, regulations, or protections that were built upon it.

For everyday people, this means we don't know exactly what benefits or guardrails are being removed. Were these provisions related to drug pricing, specific coverage mandates, or something else entirely? The full repeal is treated as if the provisions “had never been enacted,” meaning whatever entities or programs relied on those specific rules now have to revert to the pre-existing legal framework. This creates a significant unknown, and it’s something regulators and affected groups will have to sort out quickly once the bill is enacted.

What This Means for Your Wallet

If you’re currently paying full price for marketplace insurance because you earn slightly over the 400% FPL threshold, this bill could be a game-changer starting in 2026. You could finally qualify for subsidies that significantly reduce your monthly premiums. This expansion will likely draw many higher earners who previously avoided the marketplace back into the system.

However, the cost of this expanded subsidy eligibility has to be covered somewhere. While the bill doesn’t detail the funding mechanism, expanding subsidies to an unlimited income group means a larger expense for the federal government. Furthermore, the vagueness of the Section 2 repeal means the trade-off for these expanded subsidies might involve losing some other form of healthcare regulation or protection that was previously in place. It’s a classic policy puzzle: clear, tangible benefits in one section, coupled with a significant, but currently opaque, regulatory rollback in another.