Health Insurance Premium Credits Extended Through 2028, Averting Major Price Hike for Marketplace Users

The aptly named “Lower Health Care Costs Act” is doing one big thing right out of the gate: it’s extending the enhanced financial help millions of people use to pay for health insurance on the Marketplace (the Affordable Care Act exchanges). This isn't a new program; it’s about keeping the existing, beefed-up subsidies from expiring at the end of 2025. Specifically, Section 2 of this bill pushes the deadline for these enhanced premium tax credits from 2025 all the way through December 31, 2028.

The Subsidy Cliff That Didn't Happen

If you buy your health insurance through the Marketplace, this is the most important policy detail you’ll read this year. These premium tax credits are what keep monthly costs manageable for millions of working families and individuals. Without this extension, those subsidies would have shrunk dramatically starting in 2026, leading to a massive price jump—sometimes called the “subsidy cliff”—for anyone enrolled in these plans. The bill ensures that the current, more generous formula for calculating your premium assistance continues for three more years (Section 36B(b)(3)(A)(iii) of the Internal Revenue Code).

Think of it this way: If you currently pay $150 a month for a plan that actually costs $600, that $450 difference is the enhanced tax credit. If the enhancement had expired, that $450 credit might have dropped to $200, meaning your monthly premium would have suddenly shot up to $400. This legislation avoids that shock, keeping your premiums predictable and affordable through 2028.

Keeping Higher Earners in the Game

Perhaps the biggest change being extended affects households with incomes above 400% of the federal poverty line (FPL). Before the current enhancements, people earning above this threshold—roughly $60,000 for an individual or $125,000 for a family of four—were completely ineligible for premium tax credits, regardless of how expensive their local premiums were. This created a huge affordability problem for middle-class families.

This bill extends the current rule that removes that income cap (Section 36B(c)(1)(E)). Now, if your premium costs more than a set percentage of your income (currently 8.5%), you still qualify for a tax credit to cover the difference, even if you’re above the 400% FPL mark. For a self-employed consultant or a small business owner whose household income fluctuates but who faces high insurance costs, this provision is critical for maintaining coverage without breaking the bank. The extension of this eligibility is set to kick in for taxable years starting after December 31, 2025.

The Bottom Line for Your Wallet

In short, the “Lower Health Care Costs Act” is primarily a stability measure for the health insurance marketplace. It doesn't introduce sweeping new reforms or benefits, but it prevents a massive, costly disruption that would have hit millions of people right as they were managing other rising costs. For the 25-45 demographic juggling mortgages, childcare, and career growth, this means one less massive financial unknown looming on the horizon for the next few years. The cost of this stability, of course, is borne by taxpayers, but the immediate benefit is straightforward: keeping health insurance premiums lower and more accessible for those who rely on the Marketplace.