New Healthcare Bill Extends Subsidies to 600% FPL, But Cuts Off Non-Citizens and Plans Covering Abortion

The “Accountability for Better Care Act of 2025” is a major piece of legislation focused on the Affordable Care Act (ACA) Marketplace subsidies. On one hand, it’s extending financial help to more people. On the other, it’s placing significant new restrictions on who qualifies for that help and what kind of plans are eligible. This bill extends and modifies the Premium Tax Credit (PTC) through 2027, making several key changes that will directly impact who can afford health coverage.

The Good News: More Income, More Help

For those worried about the subsidy cliff, this bill offers some temporary relief. The legislation extends the current subsidy structure—which prevents taxpayers from being ineligible for the PTC if their household income exceeds 400% of the federal poverty line (FPL)—through the end of 2027 (Sec. 2). Even better, for tax years starting after December 31, 2026, the income limit is temporarily hiked up to 600% of the FPL. This means a family of four earning up to roughly $187,200 (based on 2024 FPL estimates) could potentially qualify for subsidized coverage in 2027. This extension and increase could be a lifeline for middle-income families, small business owners, and freelancers who currently pay full price or close to it, freeing up cash that can go toward rising costs like childcare or mortgages.

Another significant change is the establishment of permanent funding for Cost-Sharing Reductions (CSRs) starting in 2027 (Sec. 3). CSRs are the subsidies that reduce deductibles, copayments, and out-of-pocket maximums for lower-income individuals. This move provides long-term financial stability for the insurance market, which is good news for carriers and, theoretically, for consumers who rely on those reduced costs to actually use their insurance.

The New Rules: Citizenship and Coverage Restrictions

Now for the major shifts that cut back on eligibility and coverage options. This bill fundamentally changes who can access these subsidies by replacing the “lawful presence” rule with a strict “citizen of the United States” requirement (Sec. 2, Sec. 3). Previously, lawful permanent residents, refugees, and other legally present immigrants could qualify for the premium tax credits and cost-sharing reductions. Under this bill, starting in 2026, these individuals—even those who have lived and worked legally in the U.S. for years—would lose access to subsidized Marketplace coverage. For a long-term legal resident who runs a small restaurant and relies on the PTC to afford insurance, this change means a sudden jump to paying full, unsubsidized premiums, potentially making coverage unaffordable.

Furthermore, the bill introduces a restriction on what kind of health plans qualify for the tax credit. Any health plan that provides coverage for abortions—except in cases of rape, incest, or to save the life of the mother—will no longer be considered a Qualified Health Plan (QHP) eligible for the premium tax credit (Sec. 2). This means if you rely on the PTC to buy insurance, your plan options will be limited to those that exclude most abortion coverage. This effectively restricts access to comprehensive reproductive healthcare for millions of subsidized consumers, forcing a choice between coverage they can afford and coverage that includes reproductive services.

The $5 Minimum Payment

Finally, the bill introduces a new minimum monthly payment rule starting in 2026 (Sec. 2). Under the current system, some very low-income individuals qualify for a subsidy so large that their monthly premium is $0. This bill changes that by requiring that the premium assistance amount cannot be greater than the monthly premium minus $5. In simple terms: everyone receiving a subsidy must now pay at least $5 per month toward their premium. While $5 is a small amount, for the lowest-income individuals already struggling to make ends meet, this introduces a new mandatory cost where none existed before, potentially creating an administrative hurdle or barrier to enrollment for people who were previously fully subsidized.