S. 3391: Accountability for Better Care Act of 2025

This bill, titled the "Accountability for Better Care Act of 2025," proposes amendments to the Internal Revenue Code of 1986 primarily focused on health insurance premium tax credits. Here are the key aspects of the bill:

Extension of Premium Tax Credits

The bill aims to extend the enhanced premium tax credits available to individuals obtaining health insurance through exchanges established under the Affordable Care Act (ACA). Specifically, the deadline for these extended credits is moved from January 1, 2026, to January 1, 2028.

It also introduces changes to how eligibility for these tax credits is calculated, allowing individuals and families earning up to 600% of the federal poverty level to qualify for premium assistance. Previously, this threshold was set at 400%.

Adjustments to Applicable Percentages

The bill proposes adjustments to the applicable percentage tables used in calculating premium tax credits, which determine how much individuals must contribute towards their insurance premiums.

• For taxable years starting before January 1, 2026, individuals with incomes at 400% of the federal poverty level or higher would contribute 8.5% of their annual income to premiums.
• The contribution percentage increases for higher income brackets, potentially reaching up to 16.5% for those at the 600% mark.

Minimum Monthly Payment Adjustments

The legislation includes a provision for establishing a minimum monthly payment for health insurance premiums, ensuring that no individual's premium assistance amount exceeds their monthly premium less a $5 deduction.

Changes Relating to Citizenship and Coverage

There are specific rules regarding citizenship for premium tax credit eligibility. For taxable years beginning after December 31, 2025, the language clarifies that individuals who are not U.S. citizens will have different eligibility criteria compared to those who are lawfully present but not eligible aliens.

Moreover, any health insurance plan that covers abortion will not be regarded as a qualified health plan for the purpose of these credits, with exceptions noted for cases where the mother’s life is at risk or the pregnancy results from rape or incest.

Funding for Reduced Cost-Sharing

The bill also addresses provisions for reduced cost-sharing under the ACA by ensuring that funds are appropriated for payments relating to these plans starting January 1, 2027.

Effective Date

Most of the amendments made by this bill would take effect for tax years beginning after December 31, 2025, which means that the new rules will apply starting with the 2026 tax year.

Relevant Companies

• HCA Healthcare (HCA) - As one of the largest healthcare providers in the U.S., changes in health insurance premiums and coverage could impact patient volumes and revenue.
• Anthem, Inc. (ANTM) - As a health insurance company, Anthem could see changes in enrollment and premium pricing structures due to amended tax credits.
• Centene Corporation (CNC) - This company, which provides managed healthcare services, may experience alterations in its customer base due to increased tax credit thresholds affecting low-income individuals.