Health Insurance Subsidies Extended Through 2028: Higher-Income Taxpayers Still Eligible for Premium Tax Credits

This bill is essentially a four-year extension of the health insurance affordability rules currently used on the marketplace. Right now, the enhanced premium tax credits—which help millions pay for their monthly health insurance premiums—are set to expire after the 2025 tax year. This legislation pushes that expiration date back to the end of 2028, applying to taxable years beginning after December 31, 2025.

The Subsidy Safety Net Gets a Longer Lifeline

The core of this bill extends the “enhanced” premium assistance amounts. What does that mean in plain English? It means the formula used to calculate how much financial help you get to buy insurance on the healthcare exchange stays the same, keeping premiums lower for people at all income levels who qualify. If this bill didn't pass, many people would see their monthly premiums jump significantly starting in January 2026, creating a serious affordability cliff for millions of families and individuals who rely on these subsidies to keep their coverage.

No 'Income Cliff' Through 2028

The other major provision being extended is the rule that eliminates the so-called “subsidy cliff.” Previously, if your household income exceeded 400% of the federal poverty line (FPL), you immediately lost eligibility for any premium tax credits. The current enhanced rules removed that cliff, ensuring that no one has to pay more than 8.5% of their household income toward their benchmark plan premium, regardless of how far above 400% FPL they fall. This bill extends that specific provision (Section 36B(c)(1)(E)) through the end of 2028. For a small business owner or a dual-income family whose income fluctuates and sometimes lands them just over the 400% FPL mark, this extension provides crucial financial stability, preventing a sudden, massive spike in healthcare costs that could otherwise force them to drop coverage.

What This Means for Your Budget

If you currently get help paying for your health insurance through the marketplace, this bill is good news because it provides certainty. It means you won't have to worry about a sudden, major cost increase in 2026. For example, a 45-year-old single parent earning $65,000 (around 400% FPL) who is currently paying a subsidized premium can breathe easier knowing that the cost-sharing percentages—and thus their monthly bill—will remain stable for the next few years. The main impact here is continued affordability and stability in the individual insurance market, benefiting consumers and healthcare providers alike by maintaining a large, insured customer base. While the general public ultimately bears the cost of these tax credits, the immediate, tangible benefit is continued access to affordable health insurance for those who need it.