Protecting Health Care and Lowering Costs Act
S. 2556, the Protecting Health Care and Lowering Costs Act, would accomplish two main things. First, it repeals the health subtitle (Subtitle B) of the One Big Beautiful Bill Act (Public Law 119-21), effectively undoing the health-related changes enacted in that bill and restoring the law and regulations to how they were before that subtitle took effect. Second, it permanently extends and expands the enhanced premium tax credits (subsidies to help people buy health insurance through the ACA marketplaces) by replacing the existing structure with a new, tiered, income-based formula. The new formula increases or maintains subsidies for a broader range of income levels, including those above 400% of the federal poverty level (FPL), with a sliding scale that caps the required premium percentages at 8.5% of income for all eligible households. The changes would apply to taxable years beginning after December 31, 2025. In short, the bill would undo a recent health policy change package and lock in a more expansive, income-based subsidy structure for ACA premium subsidies starting in 2026.
Key Points
- 1Repeal of health subtitle changes: Subtitle B of title VII of Public Law 119-21 (the health subtitle from the One Big Beautiful Bill Act) would be repealed. Any laws or regulations referred to in that subtitle would be treated as if the subtitle—and its amendments—had never been enacted.
- 2Permanent extension of enhanced premium tax credits (PTCs): The bill would make the enhanced ACA premium tax credits permanent, rather than temporary or conditioned on other factors.
- 3New, tiered subsidy structure by income: The credit formula would be updated so that applicable premium percentages rise on a sliding scale across income tiers (as a percent of poverty). The table specifies initial and final premium percentages for each income tier, with higher subsidies for those in the 150% to 400% of the FPL bands and continuing a substantial credit for higher incomes.
- 4Elimination of certain affordability limit provisions: The bill would strike specific subparagraphs and clauses related to affordability provisions in the current 36B structure, aligning credits with the new tiered approach.
- 5Effective date: The changes to the premium tax credits would apply to taxable years beginning after December 31, 2025 (i.e., starting with 2026 tax year), making 2026 the first year under the new subsidy framework.