Legislative Summary: Senate Amendment 3960
Summary: The amendment revives for two years (i.e., 2026 and 2027) the now-expired enhanced system of premium subsidies first enacted by Democrats as part of the American Rescue Plan Act (P.L. 117-2), and extended until the end of 2025 in the Inflation Reduction Act (P.L. 117-169).
Modifies the enhanced subsidy regime in two ways:
- Creates a minimum monthly payment for benchmark coverage (i.e., the second-lowest cost silver plan) of $5. Enrollees could choose a lower-cost plan (e.g., the lowest-cost silver plan or a bronze plan) for coverage with a lower, or no, premium.
- Imposes an income cap on eligibility of $100,000 for an individual, $200,000 for a family, and $150,000 for a head of household. (In 2025, $100,000 in income for an individual equals roughly 639% of poverty, and $200,000 in income for a family of four equals roughly 622% of poverty.) By contrast, the enhanced subsidy regime under ARPA and IRA had no income cap, allowing households at all income levels to receive subsidies whenever premiums for benchmark coverage exceeded 8.5% of household income.
The below table compares the subsidy regime of Obamacare as enacted (i.e., current law subsidy levels), the regime passed in ARPA and extended in the IRA, and the modified subsidy regime under the amendment. All numbers are expressed as the maximum percentage of income a household would pay for benchmark coverage (i.e., the second-lowest cost silver plan), with the federal subsidy covering any difference.
Note that in 2025, the federal poverty level was $15,650 for a single individual, and $32,150 for a family of four. (Federal poverty levels for 2026 have not yet been released.) The Obamacare premium assistance percentages are adjusted every year, per a formula laid out in statute. The 2026 premium assistance percentages were published in IRS Revenue Procedure 2025-25.
Cost: A formal Congressional Budget Office (CBO) cost estimate is not available. However, the two-year revival of enhanced subsidies would likely cost tens of billions of dollars, and the amendment has no offset for this spending.
Possible Conservative Concerns: Conservatives may have significant concerns with the amendment’s revival of enhanced subsidies, including but not limited to:
- No Impact on Gross Premiums in 2026: In its cost estimate, CBO admitted that the amendment would have no effect on gross premiums for the current plan year, “because those premiums have already been set.”
- Expands and Entrenches Obamacare: The amendment would for the second time extend COVID-era enhanced subsidies that were designed to be temporary, amounting to a major entitlement expansion on the installment plan.
- Funds Plans Covering Services Americans Find Morally Objectionable: Pro-life groups have consistently noted that Obamacare subsidizes plans that cover abortion—in recent months, Maryland has used Obamacare dollars to fund abortion tourism for out-of-state residents, and encouraged other blue states to follow suit. Moreover, Obamacare subsidy dollars have also been used to fund transgender procedures that many Americans find objectionable, and political indoctrination that violates the First Amendment.
- Increases the Federal Deficit: With the federal government over $38 trillion in debt, many would question the wisdom of incurring tens of billions of dollars in deficit spending to subsidize health insurance companies.
- Undermines Employer-Provided Health Coverage: CBO noted that under a separate subsidy revival bill, 2.1 million fewer Americans would have employer-sponsored coverage. Expanding and entrenching Obamacare will only encourage more businesses to stop offering insurance and dump their workers on to the Exchanges.
- Increases Insurer Profits: The amendment directs tens of billions in new taxpayer funds to insurance companies. Because Obamacare allows them to keep one-fifth of premium dollars for profit and administrative expenses, the bill could see insurance companies receiving billions of dollars in added profit—at taxpayer expense.
- Welfare for the Wealthy: While the amendment does impose an income cap on eligibility, it would still allow households earning up to $200,000 to qualify for “low-income” insurance subsidies.
- Raises, Rather than Lowers, Underlying Health Costs: Not only does the amendment not contain any reforms to lower the actual cost of health care—Obamacare’s subsidy mechanism, under which every additional premium dollar is subsidized by federal taxpayers, only encourages health insurers to raise premiums.