More Affordable Care Act

Bill Number

S. 3264

Origin Chamber

Senate

Congress

119th Congress, Session 1

Status

Introduced

Latest Action

2025-11-20: Read twice and referred to the Committee on Finance.

Last Updated

2025-12-20T06:23:20Z

AI-Generated Summary

Purpose

The More Affordable Care Act (S. 3264) aims to increase state flexibility in administering health insurance by allowing waivers of certain Affordable Care Act (ACA) requirements, redirect funding to individual health savings accounts, enhance tax credits for small businesses in participating states, and improve transparency in health care pricing and outcomes data. It seeks to promote alternative coverage models while maintaining some consumer protections, such as bans on denying coverage for pre-existing conditions.

Key Provisions

• Health Freedom Waiver Program (Sec. 2):
• States can notify the Secretary of Health and Human Services (HHS) or Treasury (depending on the provision) at least 90 days in advance to waive specific ACA rules starting January 1, 2026, including requirements for health insurance exchanges, premium subsidies, cost-sharing reductions, and the individual mandate (Sections 36B and 5000A of the Internal Revenue Code).
• States must maintain a high-risk insurance pool or similar program to protect against high premium costs for risky individuals.
• Waivers can be requested by the governor or state legislature (via majority vote) and last until the state opts out.
• Funding for premium tax credits and cost-sharing reductions in waiver states is redirected to "Trump Health Freedom Accounts" (special health savings accounts) for eligible residents, calculated based on national averages and paid monthly, quarterly, or annually.
• States can operate their own exchanges, allow private entities to run commercial platforms for selling state-approved plans (with federal API access), or default to a federal exchange adapted to state laws.
• Consumer protections under the Public Health Service Act (e.g., no denial for pre-existing conditions, no lifetime limits) remain in place and cannot be waived.
• Plans in waiver states must be available across all such states, and child-only plans (for those under 21) are permitted.

• Trump Health Freedom Accounts (Sec. 3):
• Establishes a new type of health savings account (HSA) under Internal Revenue Code Section 223 for residents of waiver states.
• Accounts are funded by redirected ACA subsidies and can be used to buy health insurance or qualified medical expenses, but with restrictions: funds cannot cover premiums or services for gender transition procedures (defined broadly as hormonal or surgical interventions to change biological sex, with specific exclusions for disorders of sex development, emergencies, or certain treatments) or abortion services (defined as procedures to end a pregnancy, excluding cases like ectopic pregnancies, rape/incest, or life-saving separations).
• Eligible individuals must enroll in a state-approved plan; rollovers from existing HSAs are allowed, but no other contributions or rollovers to non-Trump accounts.
• Applies to tax years after December 31, 2025.

• Small Employer Tax Credit Enhancement (Sec. 4):
• Modifies the existing small business health care tax credit (Internal Revenue Code Section 45R) for employers in waiver states.
• Increases the credit to 50% of premiums (for all employers, including tax-exempt ones), removes income-based phaseouts, raises the employee eligibility threshold to 50 full-time equivalents, eliminates the full-time employee requirement, and makes the credit available indefinitely (not limited to two years).
• Treats state-approved plans in waiver states as qualified plans eligible for the credit.
• Applies to tax years after December 31, 2025.

• Price Reporting and Outcomes Transparency (Sec. 5):
• Directs HHS, in coordination with Treasury and Labor, to update regulations under Executive Order 13877 within 90 days of enactment.
• Requires disclosure of actual prices (not estimates) for items and services, standardized and comparable across hospitals and plans.
• Strengthens enforcement for accurate data reporting and mandates public reporting of health outcomes by providers.

Significant Changes to Existing Law

• Expands state waiver authority beyond the current ACA Section 1332 (which requires demonstrating coverage affordability, comprehensiveness, and benefits) by creating a simpler notification process without needing to prove equivalence, but ties it to maintaining high-risk pools.
• Introduces "Trump Health Freedom Accounts" as a new HSA variant, altering how ACA subsidies flow (from direct premium support to individual accounts) and imposing novel restrictions on uses related to gender transition and abortion, which are not in current federal law.
• Enhances the small business tax credit by making it more generous and permanent in waiver states, removing prior limitations like phaseouts and duration caps.
• Builds on existing price transparency rules (from 2019 executive order) by mandating actual prices, comparability, and outcomes data, shifting from voluntary or estimate-based reporting to stricter requirements.

Potential Impacts

• Government Agencies: HHS and Treasury face increased administrative burdens to process notifications, calculate and distribute funds to accounts, coordinate waivers across programs (e.g., Medicaid, Medicare), and update regulations. This could streamline some processes via a single waiver application but require new systems for account management and enforcement.
• Citizens: Residents of opting-in states may gain more insurance choices and portable funds via HSAs, potentially lowering costs for some, but lose direct ACA subsidies and face restrictions on covering certain services (e.g., gender-affirming care or abortions). Low-income individuals might see uneven access if states' high-risk pools are underfunded. Nationwide, it could fragment the insurance market if multiple states participate.
• International Relations: No direct impacts, as the bill focuses on domestic health policy.

Main Stakeholders Affected

• States and Governments: Governors and legislatures gain flexibility to customize health systems; non-waiver states may see competitive pressures or shifts in risk pools.
• Individuals and Families: Eligible residents (those who would qualify for ACA subsidies) in waiver states benefit from HSAs but are restricted in uses; those seeking gender transition or abortion services may face barriers.
• Small Employers and Employees: Gain enhanced tax credits for coverage, potentially improving affordability and retention in waiver states.
• Health Insurers and Providers: Must adapt to state-specific exchanges or platforms, comply with cross-state plan availability, and report detailed pricing/outcomes data, which could increase transparency but raise compliance costs.
• Taxpayers: Federal funds are redirected without increasing overall spending, but administration of accounts and credits may add overhead.

Notable Legal, Constitutional, or Political Implications

• Legal: The bill preserves core ACA consumer protections but allows waivers of subsidy and mandate provisions, potentially leading to litigation over whether this exceeds HHS/Treasury authority (limited by subsection (c)) or conflicts with ACA's statutory goals. Restrictions on account uses could invite challenges under equal protection or free exercise clauses, especially definitions of "sex" and exclusions for gender transition/abortion, which emphasize biological determinations.
• Constitutional: Reinforces federalism by empowering states via waivers, aligning with Spending Clause allowances for conditional funding, but may raise questions if redirected subsidies coerce states or undermine uniform national standards.
• Political: Names accounts after a former president ("Trump Health Freedom Accounts"), signaling partisan intent; promotes deregulation and market-based alternatives to ACA, which could polarize debates on health equity, with implications for coverage gaps or ideological restrictions on care. Regulations must be issued within one year, providing a timeline for implementation scrutiny.

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

Sponsor

Sen. Scott, Rick [R-FL]

Cosponsors (2)

Sen. Lee, Mike [R-UT], Sen. Lummis, Cynthia M. [R-WY]

Recent Actions

• 2025-11-20: Read twice and referred to the Committee on Finance.
• 2025-11-20: Introduced in Senate

Bill Versions

• More Affordable Care Act — issued 2025-11-20 — PDF (21 pages)