Senators Propose CARE Act to Extend ACA Premium Subsidies with New Eligibility Caps

Senators Bernie Moreno (R-OH) and Susan Collins (R-ME) have introduced the Consumer Affordability and Responsibility Enhancement (CARE) Act, aiming to extend enhanced Affordable Care Act (ACA) premium subsidies for two years while instituting new eligibility restrictions. The CARE Act proposes capping eligibility for these tax credits at a household income of $200,000 and requires all enrollees to pay a minimum monthly premium of $25, eliminating zero-premium plans currently available to lower-income individuals. This legislative effort responds to the impending expiration of ACA premium subsidies set for the end of 2025, which, without extension, could lead to significant premium increases for enrollees and loss of coverage for millions. Enhanced premium tax credits, introduced under the American Rescue Plan Act in 2021 and extended through 2025 by the Inflation Reduction Act, have expanded ACA marketplace enrollment from around 11 million to over 24 million. If these subsidies lapse, premiums for many enrollees could rise by over 100%, with subsidized enrollees potentially seeing average annual premium costs increase from $888 to $1,904 in 2026. The Congressional Budget Office predicts a rise in uninsured Americans by millions in the years following expiration, exacerbating pressures on healthcare providers. Middle-income families, especially those above 400% of the federal poverty level, would be disproportionately affected by the re-establishment of the "subsidy cliff," which currently caps premium payments at 8.5% of household income. The CARE Act's measures seek to balance extending affordability while introducing fiscal controls by capping eligibility and requiring minimal premium contributions. Health insurers are already proposing significant rate hikes for 2026, raising concerns about affordability and plan accessibility. Experts highlight that an increase in uninsured rates due to subsidy expiration could strain hospitals and safety-net providers, particularly in rural regions and states without Medicaid expansion, impacting overall healthcare system sustainability. Senators Moreno and Collins frame the CARE Act as a pragmatic approach to prevent sudden disruptions in coverage while addressing cost concerns. The legislation illustrates ongoing Congressional debates over how to manage ACA premium subsidies amid broader healthcare affordability challenges in the U.S. market.