Health Credit Bill Expands Subsidies to 700% FPL, But Adds New Immigration Hurdles

This bill, the Tax Credit Extension Act, is a major overhaul of how health insurance subsidies work under the Affordable Care Act (ACA). The core purpose is twofold: first, to keep the enhanced premium tax credits going for a few more years, and second, to fundamentally change who gets them and how they receive the money. Specifically, it extends the increased subsidy amounts, which were set to expire at the end of 2025, through the end of 2027. This means that for the next two years, millions of people will continue to see lower monthly premiums.

The Subsidy Ceiling Gets a Massive Boost

The biggest financial change here is who qualifies for help. Currently, if your household income is above 400% of the federal poverty line (FPL), you generally don't qualify for premium tax credits. This bill blows that cap wide open, raising the income limit to 700% of the FPL through 2027 (Sec. 2). Think of a family of four earning well into the six figures—they could now qualify for assistance. This is huge for middle- and upper-middle-income earners who often feel squeezed by high insurance costs. It means more people in the 25–45 age bracket, often juggling mortgages and childcare, will find health insurance suddenly much more affordable.

Your Tax Credit, Your Choice: The Personal HSA Option

Starting in 2026, the bill changes how you receive your advance premium tax credits (APTCs). Right now, that money goes straight to your insurance company to lower your monthly bill. Under the new rules, you get three options (Sec. 3). You can still send it to the insurer, or you can elect to have the payment sent directly to you, the individual. Even more interesting is the creation of the “Personal HSA.” If you enroll in a bronze or catastrophic plan, you can choose to have your APTC payments deposited into this special account. These contributions won't count against annual HSA limits, giving people more flexibility to save and spend on health expenses. For the savvy consumer who wants more control over their healthcare dollars, this could be a game-changer.

The Hidden Cost: Minimum Premium Responsibility

Here’s where things get a little less rosy for those who need the most help. The bill introduces a minimum premium responsibility requirement (Sec. 4). This means that even with the subsidy, you will be required to pay a certain minimum amount of your monthly premium. The exact dollar amount will be set by the Secretary of the Treasury. While the intent might be to ensure everyone has some skin in the game, the practical reality is that this creates a financial floor. For the lowest-income individuals, who currently might pay $0 or a very low amount for coverage, this new minimum payment could be a significant barrier to enrollment. We need to watch closely what number the Secretary sets, as it could make or break coverage for the most vulnerable.

New Hurdles for Non-Citizens

Perhaps the most restrictive part of this legislation deals with immigration status verification. The bill mandates that the Treasury and Health and Human Services Departments must coordinate with Homeland Security to help Exchanges determine if non-citizen applicants are lawfully present (Sec. 6). This process is set to tighten even further starting after 2026, when agencies must also verify if the individual is an “eligible alien”—a specific legal status that often determines eligibility for federal benefits. This new, more stringent verification process could create significant administrative delays or errors, potentially causing eligible, lawfully present individuals to lose access to their subsidies temporarily or permanently.

Furthermore, Section 7 includes a “Sense of Congress” stating that the tax credit should not be available to undocumented immigrants or, after 2026, to those who are lawfully present but not “eligible aliens.” While a “Sense of Congress” isn't binding law, it signals a strong intent to restrict coverage. For non-citizens who currently qualify based on lawful presence, this provision—especially the future requirement to be an “eligible alien”—raises serious concerns that the door to subsidized coverage could soon be closing, regardless of how long they’ve lived and worked here.