Health Bill Extends Enhanced Tax Credits Through 2027 and Imposes $200,000 Penalties on Fraudulent Insurance Agents

If you’re one of the millions of people who buy health insurance through the marketplace (the Exchange), listen up. This bill is a three-part policy sandwich: a temporary financial boost for your premiums, a major shakeup for Medicare Advantage plans, and a massive crackdown on shady insurance agents.

The Premium Tax Credit Lifeline, Extended (For Now)

First, the good news for your wallet. This legislation temporarily extends the enhanced premium tax credits (PTCs) that currently help make marketplace coverage affordable. These credits were set to expire, but the bill keeps the enhanced levels for the 2026 and 2027 tax years. What does that mean in practice? It means the percentage of your income you’re expected to pay for health insurance remains lower, keeping your monthly premiums down.

Crucially, the bill also raises the upper income limit for applying the tax credit calculation from 400% to 600% of the federal poverty line for those two years. For a family of four, that 600% threshold could mean thousands of dollars in savings on premiums, ensuring that many middle-income families don't face a sudden, massive jump in health insurance costs when the temporary enhancements would have otherwise ended. This is a short-term fix, but a significant one for budgeting families.

Medicare Advantage: The Data Diet

Section 2 targets Medicare Advantage (MA), the private plans that cover seniors. Starting in 2026, the government is changing how it calculates risk adjustment—the system that pays plans more for sicker patients. Currently, plans can sometimes use diagnoses from a single year, but this bill mandates using two years of diagnostic data. This is meant to create a more stable and accurate picture of a patient’s health.

However, the bill also introduces a major restriction: it bans the use of diagnoses collected solely through chart reviews or Health Risk Assessments (HRAs) when determining payment adjustments. Chart reviews and HRAs are tools plans often use to find diagnoses that might have been missed in regular claims data, allowing them to capture higher risk scores and thus higher payments. By excluding this data, the bill aims to prevent "upcoding"—where plans might inflate risk scores without necessarily improving care. The practical challenge here is that plans and providers who rely on these methods to accurately reflect complex patient health conditions will need to find new ways to document and submit that information, or risk lower payments for their sickest members.

The Agent Crackdown: Fraud Gets Expensive

The most aggressive part of the bill is Section 3, which focuses on stopping fraudulent enrollment in qualified health plans. We’ve all heard the horror stories: unauthorized plan switching, agents enrolling people without consent, or flat-out lying to get a commission. This bill aims to make that behavior financially ruinous.

For an agent or broker who provides incorrect information due to negligence (meaning they weren't careful), the penalty is now a minimum of $10,000 and up to $50,000 for each individual affected. If they knowingly provide false information, that penalty jumps up to $200,000 per affected person. And if they do it willfully, they could face up to 10 years in prison. These are massive, business-ending penalties designed to scare bad actors straight.

To protect consumers, the bill mandates new verification processes starting in 2028. If an agent or broker enrolls you, the system must verify your consent, and commissions due to that agent will be held until any inconsistencies in the application are resolved. This is a huge win for consumers because it directly ties the agent’s payday to the accuracy and legitimacy of the enrollment. The bill also requires agents and brokers to adhere to a “duty to act in the enrollee’s best interests,” which sets a high standard of conduct for anyone involved in the enrollment process—from the agent to the marketing organization that hired them.