A Consumer Practitioner’s Guide to the Reconciliation Bill

The massive Reconciliation Bill, Public Law 119-21 (July 4, 2025), cuts essential medical and food benefits for millions of Americans, increases costs for student loan borrowers, and eliminates incentives for energy-efficient investments, among its other provisions.  This article focuses on provisions of special interest to consumer law practitioners and legal services attorneys. 

Because of extensive changes to the student loan program, over half of the article focuses on the altered rights of student loan borrowers.  Use the table of contents to skip to other topics if your practice does not involve student loans.  Citations to the Reconciliation Bill reference sections of the Public Law, without reiterating that they are included in Public Law 119-21. Thus, Pub. L. No. 119-21 § 30001 is cited as § 30001.

Implications of 46% Cut in Maximum CFPB Funding

The Reconciliation Bill makes a 46% cut in the maximum amount of funding that the CFPB can receive each year from the FRB (§ 30001).  Generally, the CFPB has not received separate appropriations from Congress, and instead is funded by transfers from the FRB. 

The action taken in the Reconciliation Bill is somewhat unique in that it is not a 46% cut from the amount the CFPB will receive next year, and the cut does not determine the amount the CFPB receives next year or in any given year.  Instead, it is a dramatic cut in the maximum amount the CFPB can ever receive in future years.

Federal law provides that each quarter the FRB transfers to the CFPB such amount determined by the CFPB director to be “reasonably necessary to carry out the authorities of the Bureau under Federal consumer financial law.” 12 U.S.C. § 1017(a)(1).  The CFPB is constrained in making this request by a dollar cap which is a dollar amount fixed at FY 2013’s $598 million (12% of Federal Reserve System FY 2013 total operating expenses), adjusted each year by inflation, so that in FY 2025 the cap is $823 million.  See 12 U.S.C. § 1017(a)(2).  The Reconciliation Bill’s reduction of the cap, if applied to the $823 million figure, would shrink it to $446 million. 

This is a reduction in the maximum amount that the CFPB can request.  In FY 2024, the CFPB requested $729 million, which is $56 million under the FY 2024 cap of $785 million. On February 8, 2025, the CFPB requested zero dollars for the third quarter of FY 2025. 

Since the current director appears to be seeking funding well below even the new maximum, the greatest impact of the Reconciliation Bill will be to dramatically constrain future CFPB transfers from the FRB in such years when a CFPB director seeks to bring back CFPB spending to more typical levels.  A future Congress can always enact legislation raising the cap or can appropriate additional monies to the CFPB separate from FRB transfers. 

The immediate question as to CFPB funding is not whether the $446 million constrains the wishes of the current CFPB director.  The issue is whether the director will request an amount that will be sufficient to “carry out the authorities of the Bureau under Federal consumer financial law.”

 

Multiple Changes Affecting Student Loan Borrowers

The Reconciliation Bill makes extensive changes to the rights of student loan borrowers. An analysis of current rights is found in NCLC’s Student Loan Law.  Future digital updates will cover the new changes.

—Existing Student Loan Borrowers Will See Changed Payment Plans Within a Few Years and Will Lose Access to SAVE, PAYE, and ICR

Existing student loan borrowers and those who take out new loans exclusively before July 1, 2026, for now can rely on the existing payment plan options, including IBR, PAYE, ICR, and standard plans, but changes to plan options will be made by July 1, 2028 (§ 82001). They can also remain in the SAVE plan if a pending federal court action preliminarily enjoining the SAVE plan does not upend the SAVE option. 

Separate from this legislation, the Department of Education has already taken actions to restrict access to the SAVE plan. Since litigation challenging the plan began last year: borrowers already enrolled in the SAVE plan have been placed in forbearance since summer 2024; the Department stopped allowing borrowers to newly enroll in SAVE in February 2025; and just recently the Department announced that it would begin charging interest again on loans in the SAVE forbearance beginning August 1, 2025. 

For existing borrowers who do not take out any new loans on or after July 1, 2026, the Bill will change their repayment options by July 1, 2028. The SAVE, PAYE, and ICR plans will be eliminated, and borrowers who were enrolled in one of these plans will have to switch to one of five options: 

• Income-Based Repayment (IBR);
• The Standard plan (with fixed monthly payments);
• The Extended Plan (if eligible) with fixed monthly payments over a longer term;
• The Graduated plan (with payments that increase over time); or
• A new option called the Repayment Assistance Plan (RAP), which is described in the next section. 

If borrowers enrolled in SAVE, PAYE, or ICR do not voluntarily switch plans by the time those plans are eliminated, then the Department will switch their plans for them. The Department will place all Direct Loans taken out for a borrower’s own education in the new RAP plan, and will place loans enrolled in IDR that are ineligible for RAP in the IBR plan, including any FFEL loans and any Direct Consolidation loans that paid off a Parent PLUS loan (if the consolidation loan is enrolled in any IDR plan before July 1, 2028).

The elimination of the SAVE plan will mean higher monthly payments for most borrowers currently enrolled in IDR. Payments in both IBR and the new RAP plan will be significantly higher than payments in SAVE. The RAP plan is not yet available, but should be available by July 1, 2026, and the Department may update its loan simulator by then to facilitate comparisons of borrowers’ estimated monthly and lifetime payments in IBR and RAP. 

IBR will be the only current income-driven plan that will remain, and it will only remain available to borrowers who take out all their loans before July 1, 2026.  The IBR payment amounts and loan forgiveness periods will not change. Under IBR, borrowers who took out their loans before July 1, 2014, pay 15% of their discretionary income (defined as income above 150% of the Federal Poverty Line for their family size), with forgiveness of any remaining balance after 25 years. Borrowers who took out loans between July 1, 2014, and June 30, 2026, pay 10% of discretionary income, with forgiveness after 20 years. Congress has eliminated the requirement that borrowers must have a “partial financial hardship” to enroll in IBR, which will make more borrowers eligible to switch into the plan. 

Congress will also allow existing Parent PLUS borrowers to use IBR, but only if they consolidate their Parent Plus loans into a Direct Consolidation loan before July 1, 2026, and enroll in an income-driven repayment plan, such as ICR, before July 1, 2028.  This is meant to grandfather in Parent PLUS borrowers who have been repaying via ICR, since ICR will be eliminated. But it will only help current Parent PLUS borrowers—and only if they jump through the above hoops. If Parent PLUS borrowers consolidate their loans or take out any new loans on or after July 1, 2026, then they will not be eligible for IBR or any other income-driven repayment plans.

Be aware that taking out any new loans on or after July 1, 2026, will result in the borrower losing access to existing repayment options for their new and even for their existing loans and in being limited only to the two new repayment options described below for new borrowers (standard and RAP). Importantly, consolidating existing loans results in a new Direct Consolidation Loan, and thus any existing borrower who consolidates their loans on or after July 1, 2026, will also be limited to only the two new repayment options described below.

—Repayment Options for New Borrowers (and Existing Borrowers Who Consolidate or Take Out New Loans) Will Eliminate $0 Payment Options and Require Higher Monthly Payments for Many

Borrowers with any federal student loans disbursed on or after July 1, 2026, will only have a choice of two repayment plans: a new standard plan with fixed monthly payments and a new income-driven repayment plan called the Repayment Assistance Plan (RAP) (§ 82001). Existing plans (including SAVE, PAYE, IBR, ICR, graduated, extended, alternative) will not be available to anyone who borrows a federal student loan on or after July 1, 2026.  This applies even to existing loans where the same borrower takes out another loan after July 1, 2026.  Importantly, anyone who waits until after July 1, 2026, to consolidate their student loans will be treated as borrowers with new loans and limited to only the new RAP and standard plans.

The new standard plan has fixed payments amortized over a period that varies from 10 to 25 years, with longer repayment terms for people who borrowed more. Borrowers will be able to switch back and forth between the RAP and standard plans. But Parent PLUS borrowers with new loans after July 1, 2026, will only have access to the standard plan. 

The new Repayment Assistance Plan (RAP) will be the only income-driven repayment option for new borrowers, and it will be very different from prior IDR plans. Payments in the RAP plan will be calculated at 1% to 10% of the borrower’s full adjusted gross income, depending on the income level. The resulting monthly payment is reduced by $50 per dependent, with a minimum monthly payment of $10.  

RAP Plan Monthly Payments Based on Adjusted Gross Income

Adjusted Gross Income range	% of income used to calculate monthly bill	Monthly bill range before subtracting $50 per dependent (with $10 minimum payment after deductions)
Less than $10,000	NA	$10
$10,000–$20,000	1%	$10–$16
$20,000–$30,000	2%	$33–$50
$30,000–$40,000	3%	$75–$100
$40,000–$50,000	4%	$133–$166
$50,000–$60,000	5%	$208–$250
$60,000–$70,000	6%	$300–$350
$70,000–$80,000	7%	$408–$466
$80,000–$90,000	8%	$533–$600
$90,000–$100,000	9%	$675–$750
Greater than $100,000	10%	$833+

This is quite different from past IDR plans, which calculated payments based only on a percentage of “discretionary income.” These plans deducted an amount to allow borrowers and their families to meet their basic needs, and then the payments were based on the remaining amount. The non-discretionary income was estimated as 100% to 225% of the federal poverty level by family size. Low-income borrowers earning below these protected income thresholds qualified for $0 payments, which allowed them to keep their loans in good standing, avoid default, and make progress toward loan forgiveness through IDR or Public Service Loan Forgiveness (PSLF). 

Overall, the RAP plan will require higher payments than the existing SAVE plan. One analysis found that the typical borrower will pay almost $3,000 more per year in RAP than they would in the SAVE plan.  Moreover, the RAP payment schedule is not indexed to inflation, so over time, unless fixed by Congress, borrowers will have to pay an increasing percentage of their income toward loans.

The RAP plan will also require more years of payments to qualify for cancellation of any remaining balance. Current income-driven repayment plans forgive the remaining balance after 10 to 25 years of qualifying payments, depending on the plan. For RAP, the balance is not forgiven until 30 years, meaning borrowers with persistently low incomes or high debt-to-income ratios could be in debt for thirty years even if they make all their payments on time with no deferrals, forbearances, or periods of delinquency. As a result, the growing crisis of people carrying unaffordable student loan debt into retirement age is likely to worsen.

There are some helpful features in the RAP plan, however. First, like the SAVE plan, the RAP plan waives any monthly interest charges that are not fully covered by the borrower’s monthly payment, ensuring that borrowers who make their required payments will not have their balance balloon with interest, and making it more likely that borrowers will repay in full before their 30-year term is up. Once a borrower has repaid in full, their repayment obligation will be satisfied. Second, the RAP plan adds a reduction-in-principal match of up to $50, which is available where interest charges eat up most or all of a borrower’s monthly payment. This means that when a borrower makes an on-time payment, their outstanding balance will always go down, even if only by $10. 

—Student Loan Debt Cancelled Through IDR After 2025 Likely Will Be Taxable

The 2021 American Rescue Plan Act temporarily removed federal income tax consequences for all federal student loan discharges and cancellations that occur through the end of 2025.  See 26 U.S.C. § 108(f)(5). Additional legislation duplicates this for certain types of student loan discharges, without an end date. See NCLC’s Student Loan Law Chapter 14. 

The Reconciliation Bill fails to extend past 2025 this broad protection against taxation, which means that student loans cancelled through income-driven repayment after December 31, 2025, will be subject to taxation barring any new legislation. Beginning next year, borrowers will be subject to federal income tax when a cancellation through any of the IDR programs (IBR, RAP, SAVE, PAYE, ICR) occurs. 

Note, though, that a debt cancellation being subject to taxation does not always mean the cancellation will increase an individual’s taxes.  Discharged debts are not taxable if the borrower is insolvent (debts exceed assets), the debt is discharged in bankruptcy, or in certain cases where the debt is subject to dispute. See NCLC’s Student Loan Law §§ 14.6, 14.7.

The Reconciliation Bill does extend the protection from federal income tax consequences for loans discharged through the Total and Permanent Disability Discharge program, as well as for loans discharged based on death (§ 70119). Additionally, separate protections against federal income tax consequences remain applicable to loans cancelled or discharged through the Public Service Loan Forgiveness program, Closed School Discharge Program, and False Certification Discharge Program. Additionally, the IRS has previously stated that it would not assert taxation against people who had loans cancelled under the Borrower Defense Program, though that protection is less secure.

—Rights Rolled Back for Borrowers Whose School Engages in Fraud or Closes

The Closed School and Borrower Defense discharge programs were strengthened by regulations in 2022 designed to make it easier for borrowers to get discharges when their school closed before they completed their program or engaged in lies or other misconduct to get the borrower to enroll. While these discharge programs will remain, the Reconciliation Bill delays the effective date of the 2022 regulations, such that the 2022 regulatory improvements will only apply to loans issued after July 1, 2035 (§§ 85001, 85002). That means existing loans, as well as new loans issued over the next 10 years, will be subject to the pre-2022 regulations, which will make it harder for borrowers to obtain discharges through those programs.

—Future Student Loans Will Have New Restrictions on Deferment and Forbearance

For loans taken out on or after July 1, 2027, the Reconciliation Bill eliminates economic hardship and unemployment deferments that allow financially distressed borrowers to defer payments and any interest accrual on subsidized loans for up to three years (§ 82002). New limits will also apply to discretionary forbearances that are often used by borrowers who are temporarily unable to afford to their payments (§ 82002). These will now be limited to nine months during any two-year period. These new limits on postponing payments in times of financial distress, combined with the elimination of $0 payments in IDR for new borrowers earning below or near poverty wages, mean that severely financially distressed borrowers will have fewer options to avoid falling behind and into default. 

—Increased Opportunity to Rehabilitate a Loan

Student loan borrowers can rehabilitate their loans and get out of default.  Beginning on July 1, 2027, the Reconciliation Bill increases the number of times a borrower can rehabilitate their loans out of default from one to two (§ 82003). This generally applies to Direct, FFEL, and Perkins Loans, and applies to both existing and future loans.

—The Public Service Loan Forgiveness Program Is Basically Unchanged

The Public Service Loan Forgiveness Program (PSLF) is unchanged, other than to make clear that RAP payments will qualify for PSLF (§ 82004).

—Elimination of GRAD PLUS; New Loan Limits for Graduate Students

The Reconciliation Bill limits federal loans for graduate students (§ 81001).  Beginning in July 2026, the Grad PLUS loan program is eliminated entirely, and there are new dollar amount limits on other loans to graduate students. Moreover, a new aggregate lifetime loan dollar limit for all students will primarily impact students pursuing graduate or professional degrees. There are also new limits on Parent Plus loans. Additionally, schools will be allowed to reduce annual loan limits for students at their school by program or school-wide. 

—Beyond Reconciliation: Dep’t of Ed. Will Charge Interest for Those in SAVE Forbearance, Block New SAVE Enrollments, and Hold Up Forgiveness in SAVE, PAYE, and ICR 

The Department of Education has interpreted an April 2025 federal court order preliminarily enjoining the SAVE plan as blocking the entirety of the Department’s 2023 income-driven repayment rules, 88 Fed. Reg. 43,820 (July 10, 2023), including provisions applicable to repayment plans other than SAVE. 

Since March 2025, the Department has stopped accepting applications to enroll in the SAVE plan and has changed its IDR application form to remove SAVE as an option, though it continues to accept applications to enroll in PAYE, IBR, and ICR. Borrowers can apply to enroll in those plans at: https://studentaid.gov/idr/.

There is a big backlog of IDR applications since the Department paused application processing several times during the SAVE plan litigation and changed the application form in March. Online applications submitted now are processed more quickly than both paper applications and online applications submitted prior to the application change in March.  Servicers report that if a borrower submits an online application, it will supersede any pending old applications the borrower has filed and is likely to be processed more quickly. 

Borrowers who are currently in the SAVE plan have been in a zero-interest forbearance since August 2024, and for now at least can remain in forbearance. Nevertheless, on July 9, 2025, the Department announced that as of August 1, 2025, the Department will begin charging interest on loans in the SAVE forbearance, meaning borrowers’ balances will increase every month unless they switch out of the plan or make voluntary payments. Although the Department claimed this was due to a court order, no court has ordered the Department to charge interest to borrowers in the SAVE forbearance.

Additionally, the Department has stated that time in the SAVE forbearance will not be considered qualifying time toward loan forgiveness in either the income-driven repayment plans or PSLF. Borrowers may consider switching to another repayment plan, such as IBR, or applying for an economic hardship deferment, which would allow them to continue postponing payments while not being charged interest on any subsidized loans they have and to earn credit for time in the deferment toward IDR and PSLF forgiveness.

The Department is also not processing loan forgiveness for borrowers otherwise eligible for forgiveness in the Income-Contingent Repayment Plans (ICR) and Pay As You Earn (PAYE) plans, as well as for borrowers in the SAVE plan. The Department is urging borrowers to switch to the Income-Based Repayment (IBR) plan (described above), and states that it will process forgiveness for borrowers in that plan. However, many advocates have reported that borrowers eligible for forgiveness in IBR are similarly not receiving forgiveness right now, raising concerns that if forgiveness is delayed until 2026, it will be subject to federal income taxation. 

 

Radical Changes in Car-Buying Incentives

The Reconciliation Bill offers incentives to purchase American vehicles on credit, eliminates incentives to purchase electric vehicles, and reduces incentives for manufacturers to produce fuel-efficient vehicles.

The $7,500 tax credit to purchase a new “clean” vehicle (e.g., electric) terminates seven years early, no longer applying for any vehicle acquired after September 30, 2025 (§ 70502). The $4,000 tax credit to purchase a clean used vehicle also terminates seven years early, no longer applying for vehicles acquired after September 30, 2025 (§ 70501). The $1,000 tax credit for installing electric vehicle charging stations for home charging ends June 30, 2026 (§ 70504).

Eliminating this credit also eliminates the tax credit for leased “clean” vehicles going to the lessor and not consumers.  One might now expect a reduction in the amount of leasing taking place for electric vehicles and an increase in credit sales.

The Act also eliminates civil penalties for violations of the Corporate Average Fuel Economy (CAFE) standards. Thus, manufacturers may have less incentive to produce fuel-efficient vehicles.

At the same time the Act creates an above-the-line deduction of up to $10,000 per year for interest payments on a car, minivan, van, sport utility vehicle, pickup truck, all-terrain vehicle, recreational vehicle, or motorcycle purchase (§ 70203). The deduction applies only to new and used vehicles whose final assembly occurs in the United States.  Excluded are commercial purchases, leases, and purchases of vehicles with salvage titles or used for scrap or parts. 

The deduction phases out starting when the taxpayer’s modified adjusted gross income exceeds $100,000 ($200,000 in the case of a joint return).  Taxpayers with no federal tax liability cannot obtain a tax refund based on their car interest payments.  The deduction is allowed only from tax years 2025 through 2028.

Given car dealer track records regarding explaining vehicle purchase incentives to customers, there is a real risk that sales presentations will misrepresent the advantages of the tax deduction or fail to account for the individual consumer’s tax profile. The complexity of this interest deduction will not help matters. For a discussion of consumer claims involving dealers’ sales misrepresentations, see NCLC’s Unfair and Deceptive Acts and Practices Chapter 7. 

No More Tax Credits for Energy Efficient Homes

The Reconciliation Bill ends seven years early, on December 31, 2025, The Energy Efficient Home Improvement tax credit of up to $3,200 for such energy efficiency improvements as home energy audits, air source heat pumps, heat pump water heaters, Energy Star doors and windows, insulation and air sealing, electric panel work, and other measures (§ 70505).

The bill also ends seven years early, on December 31, 2025, tax credits for homeowners of up to 30% of the cost for clean energy systems such as rooftop and other solar panels, solar water heating, wind turbines, geothermal heat pumps, and fuel cells (§ 70506). Solar developers, but not consumers, may remain eligible for other tax credits for a longer period.

The Reconciliation Bill did not change the Low-Income Weatherization Assistance Program (WAP) which assists in making low-income Americans’ housing more energy efficient.  WAP is a block grant program, providing each state with a fixed amount to allocate among eligible households. The states subcontract with local providers or grantees, such as community action agencies or other public or nonprofit agencies, which then enter into agreements with homeowners and landlords to complete the weatherization work. For more details on WAP, see NCLC’s Access to Utility Service § 9.2. See generally Chapter 9 (discussing utility-sponsored and other programs to increase residential energy efficiency).

Funds Rescinded for Improvements to HUD-Subsidized Multifamily Properties

Funds not yet spent from the Green and Resilient Retrofit Program for Multifamily Housing are rescinded. The funds provided grants to support energy efficiency and improve indoor air quality and climate resiliency in privately-owned, HUD-subsidized multifamily properties. Property owners could use project funding and financing to improve energy and water efficiency, address indoor air quality concerns, implement building electrification and renewable energy technologies, install low-emission building materials, and improve climate resilience (§ 30002). 

IRS Free Direct File in the Crosshairs?

The IRS now offers Direct File, a free tax preparation and filing program that is available in 25 participating states, for taxpayers who only take standard deductions and have certain common types of income.  This can be an attractive option for consumers not only to save on tax preparation fees but to avoid commercial services that might entice consumers to take out expensive financial products.

The Reconciliation Bill (§ 70607) does not immediately eliminate Direct File. Instead, it creates a task force to investigate replacing Direct File with a public-private partnership.  The IRS already has a public-private program, which has been plagued by abuses and low usage.

New Tax on International Remittances

The Reconciliation Bill adds a new 1% excise tax on international remittances sent after December 31, 2025 (§ 70604).  The Electronic Fund Transfer Act’s Regulation E establishes disclosure requirements before and after a remittance is sent concerning the amount to be transferred, fees and taxes added to that amount, and the total amount charged for the transfer. See 12 C.F.R. § 1005.31; NCLC’s Consumer Banking and Payments Law § 9.2.  If a remittance company fails to properly disclose the new tax, the consumer should have a claim for actual damages, $1,000 statutory damages, costs, and attorney fees.  In federal court, the consumer will have to show concrete injury.  See NCLC’s Consumer Banking and Payments Law § 7.15. 

Some LIHEAP Recipients Will See a Smaller SNAP Benefit

The Reconciliation Bill (§ 10103) will lower some Low Income Home Energy Assistance Program (LIHEAP) recipients’ Supplemental Nutrition Assistance Program (SNAP) benefits under the current “Heat and Eat” provision by restricting eligibility for “Heat and Eat” to households with older adults or members with disabilities. Around 10 states participate in SNAP “Heat and Eat” which is described more thoroughly here by the Food Research & Action Center.

Over 20 Million Families Affected by SNAP Cuts

The Reconciliation Bill harms millions of Supplemental Nutrition Assistance Program (SNAP) recipients in multiple ways. According to the Food Research & Action Center, the Act:

• Requires SNAP participants to prove that they are either exempt from or meeting strict work requirements or they are limited to receiving SNAP benefits for three months in three years.  The age up to which able-bodied adults without dependents must meet work requirements is increased from 54 to 64.  The bill also narrows the definition of a dependent child to those under 14, and removes current protections for veterans, individuals (or families with children 14+) experiencing homelessness, and youth aging out of foster care. The Department of Agriculture is barred from granting work requirement waivers except in areas with unemployment rates above 10% (§ 10102).
• Prohibits increasing SNAP benefits based on re-evaluations of the Thrifty Food Plan, thus preventing SNAP benefits from keeping pace with rising food costs and changes to nutrition standards and food preparation (§ 10101).
• Increases restrictions on non-citizens receiving SNAP benefits by removing eligibility for lawfully present individuals such as refugees, those granted asylum, and survivors of domestic violence, human trafficking, or other humanitarian crises (§ 10108).
• Prevents households from continuing to be able to include internet service costs when calculating their excess shelter deduction (§ 10104).
• Terminates SNAP-Ed, effective after FY 2025, ending nutrition education and obesity prevention efforts (§ 10107).
• Requires states to pay for a much larger share of SNAP administrative costs (75% instead of 50%), likely affecting the ability of state agencies to manage the program effectively and likely resulting in service delays and staffing reductions (§ 10106).
• Requires states, for the first time ever, also to contribute to the cost of the SNAP benefits themselves beginning in FY 2028, with the percentage (0% to 15%) tied to a state’s error rate in administering the program.

One study found all 22.3 million US families receiving SNAP benefits would lose at least some benefits because of the limitations in Thrifty Food Plan increases.  5.3 million families would receive at least $25 less than they do now in SNAP benefits per month, with these 5.3 million families losing an average of $1,752 a year for a full-year recipient.

Massive Rollbacks to Medicaid, Obamacare, and Even Medicare

The Reconciliation Bill cuts more than $ 1 trillion from health care, largely from Medicaid, and it is estimated that at least 17 million Americans will lose health coverage. The Act:

• Terminates Medicaid coverage and locks out from marketplace tax credits those adults without dependent children under 13 if they do not regularly report on their work, school, or “community engagement” activities that total 80 hours a month. This begins December 31, 2026; states can start earlier, but no later than December 1, 2028.
• Requires eligibility redeterminations every six months for adults enrolled through the Affordable Care Act Medicaid expansion, beginning December 31, 2026.
• Restricts retroactive coverage from three months to two months in non-Medicaid expansion states, and to one month for Medicaid expansion states.
• Prohibits marketplace auto enrollment and renewal, effective in 2028.
• Prohibits premium tax credits for any month in which a person had not reconciled previously received advanced premium tax credits, effective in 2028.
• Eliminates Medicaid eligibility and/or marketplace tax credits for various categories of non-citizens.
• Reduces benefits, narrows eligibility, and increases premiums and cost sharing for marketplace insurance, including coverage limits for people in need of gender-affirming care and people with DACA-protected immigration status.
• Adds cost-sharing for adults with incomes over 100% FPL up to $35/visit or up to $1,000 for individuals making around $15,000/year, for adults getting coverage through the ACA Medicaid expansion, exempting primary, prenatal, pediatric and emergency room care, and behavioral health, rural clinic, and federally qualified health center services.
• Exempts from price negotiation “orphan” drugs approved to treat rare diseases or conditions.
• Prohibits marketplaces from establishing special enrollment periods based on income.
• Requires those underestimating their annual income to repay the total amount received more than advanced premium tax credits rather than repayment based on a dollar limit adjusted for their income, with an exemption for people whose income unexpectedly drops to below the poverty line.
• Limits state assessment of new provider taxes, the structure of provider tax revenue under state Medicaid 1115 waivers, and states’ ability to direct higher reimbursement for rural hospitals, clinics, and other safety-net providers.
• Sunsets on January 1, 2026, the offer of subsidies to any state newly adopting Medicaid expansion.
• Prohibits Medicaid reimbursement to any essential community provider primarily engaged in family planning and reproductive health, who offers abortion services and received more than $800,000 in Medicaid funding in 2024.
• Stops implementation of a federal rule strengthening nursing home staffing ratio requirements.

Acknowledgments

Thanks to Betsy Gwin and Victoria Negus of the Massachusetts Law Reform Institute for contributions concerning the SNAP discussion. That discussion relies heavily on materials from the Food Research & Action Center. The section on health insurance is based on materials from Families USA.