Capping Costs for Consumers Act of 2026

Bill Number

H.R. 7164

Origin Chamber

House

Congress

119th Congress, Session 2

Policy Area

Health

Status

Introduced

Latest Action

2026-01-20: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.

Last Updated

2026-02-13T18:40:05Z

AI-Generated Summary

Purpose of the Legislation

The "Capping Costs for Consumers Act of 2026" aims to make health insurance more affordable under the Affordable Care Act (ACA) by expanding financial assistance for out-of-pocket costs and premium subsidies. It shifts the benchmark for these benefits from "silver" plans (which cover about 70% of medical costs) to "gold" plans (which cover about 80% of costs), effective for plan years starting January 1, 2028. This is intended to reduce expenses for middle-income households while increasing federal funding to support the changes.

Key Provisions

• Expansion of Cost-Sharing Reductions (Section 2):
• Amends Section 1402 of the ACA to base cost-sharing reductions on gold-level plans instead of silver-level plans starting in 2028.
• For individuals and families with household incomes between 150% and 400% of the federal poverty level (FPL), the insurance plan's share of total allowed medical costs increases to higher percentages:
• 87% for incomes 150–300% FPL (up from previous limits).
• 85% for incomes 300–400% FPL (new eligibility extension).
• Before 2028, the existing structure remains: 94% for 100–150% FPL, 87% for 150–200% FPL, 73% for 200–250% FPL, and 70% for 250–400% FPL.
• Provides open-ended funding from the U.S. Treasury to cover these reductions, appropriated to the Secretary of Health and Human Services (HHS).
• Updates state Basic Health Programs (an ACA option for low-income coverage) to reference gold plans as the benchmark starting in 2028, ensuring alignment with Exchange plans.

• Changes to Premium Tax Credits (Section 3):
• Amends Section 36B of the Internal Revenue Code to calculate premium assistance credits based on the second-lowest-cost gold plan (instead of silver) for taxable years after December 31, 2027.
• These credits help eligible individuals afford monthly premiums for ACA Marketplace plans.

Significant Changes to Existing Law

• Benchmark Shift: Replaces silver plan references with gold plans in key ACA sections, making subsidies more generous by tying them to plans with higher coverage levels. This effectively caps consumer costs at gold-plan levels without requiring enrollment in gold plans.
• Income Eligibility Extension: Extends full cost-sharing reductions up to 400% FPL starting in 2028 (previously phased out above 250% FPL), closing a gap in affordability for middle-income groups.
• Funding Mechanism: Introduces mandatory Treasury appropriations for cost-sharing, removing reliance on annual budget approvals and ensuring stable funding.
• These changes build on the ACA's framework but do not alter core elements like Medicaid expansion or essential health benefits.

Potential Impacts

• On Citizens: Low- and middle-income individuals (up to 400% FPL, roughly $60,000–$120,000 for a family of four, depending on location) will face lower deductibles, copays, and premiums, potentially increasing enrollment in Marketplace plans and reducing medical debt. However, healthier individuals might see minimal changes if they already have low costs.
• On Government Agencies: HHS and the Internal Revenue Service (IRS) will need to update systems for calculating and distributing subsidies, with increased administrative workload. Federal spending could rise significantly (estimates not provided in the bill), funded through general Treasury revenues, potentially straining the budget without offsetting cuts or revenue.
• On International Relations: No direct impacts, as this is a domestic health policy focused on U.S. insurance markets.
• Broader Effects: May boost insurance coverage rates, similar to past ACA expansions, but could indirectly affect healthcare providers through higher utilization of services.

Main Stakeholders Affected

• Individuals and Families: Primarily those with incomes 100–400% FPL seeking ACA Marketplace coverage; benefits low-income more directly but extends to middle-class households.
• Health Insurers: Companies offering qualified health plans must adjust pricing and plan designs to account for higher actuarial values (the percentage of costs covered), potentially leading to richer benefits but squeezed margins if premiums don't rise accordingly.
• Federal Government: HHS (oversees Exchanges and subsidies), IRS (handles tax credits), and Treasury (provides funding); faces higher expenditures without specified limits.
• States: Those running their own Exchanges or Basic Health Programs will need to conform systems; states without expanded Medicaid may see more Marketplace reliance.
• Healthcare Providers: Indirectly affected through potential increases in insured patients and service use.

Notable Legal, Constitutional, or Political Implications

• Legal: Relies on Congress's spending power under Article I of the Constitution to appropriate funds and amend tax laws, consistent with prior ACA rulings (e.g., upheld in NFIB v. Sebelius). No challenges to federalism are evident, though states could opt out of related programs.
• Constitutional: Enhances ACA subsidies without altering its structure, avoiding separation-of-powers issues; the open-ended appropriation is standard for entitlement programs but could invite future litigation if seen as uncontrolled spending.
• Political: Positions as a pro-consumer update to the ACA, appealing to bipartisan support for affordability amid rising healthcare costs. However, it may spark debates over federal spending increases (potentially billions annually) and could face opposition from fiscal conservatives or during budget reconciliation. If enacted, it reinforces the ACA's longevity post-2025 subsidy enhancements.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Schrier, Kim [D-WA-8]

Cosponsors (1)

Rep. Budzinski, Nikki [D-IL-13]

Recent Actions

• 2026-01-20: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2026-01-20: Referred to the Committee on Energy and Commerce, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
• 2026-01-20: Introduced in House
• 2026-01-20: Introduced in House

Bill Versions

• Capping Costs for Consumers Act of 2026 — issued 2026-01-20 — PDF (7 pages)