H.R. 3257 — Bridge to Medicaid Act of 2025

This section enhances affordability of ACA Marketplace coverage for individuals with household income not exceeding 138% of the federal poverty level (FPL) as follows: (1) Amends ACA section 1402 (42 U.S.C. 18071), which provides cost-sharing reductions (CSRs) in silver-level qualified health plans (QHPs), (A) by expanding CSR eligibility for plan years 2026 through 2028 to those with household income up to 400% FPL (from 250% FPL); (B) by treating any such individual determined in 2025 to have household income not exceeding 138% FPL as having 100% FPL for the full year; (C) by excluding such individuals ("specified enrollees") from standard CSR percentages in plan years 2026 through 2028 and instead requiring issuers to reduce their cost-sharing such that the QHP covers 99% of total allowed costs, with the Secretary reimbursing issuers 12% of those costs from new appropriations; and (2) amends ACA section 1311(c) (42 U.S.C. 18031(c)) to establish a continuous special enrollment period beginning January 1, 2026, through December 31, 2028, for such individuals ineligible for minimum essential coverage other than eligible Marketplace plans or certain other individual policies; and (3) amends ACA section 1301(a) (42 U.S.C. 18021(a)), which defines QHPs, to require silver-level QHPs subject to section 1402 in plan years 2026 and 2027 to provide such individuals additional benefits consisting of non-emergency medical transportation services (as described in Medicaid under SSA section 1902(a)(4)).

This section temporarily expands the premium tax credit (PTC) under IRC §36B—available to subsidize ACA Exchange coverage for individuals lacking affordable minimum essential coverage with household incomes at or above 100% but below 400% of the federal poverty level (FPL)—for taxable years beginning after December 31, 2025, and before January 1, 2029, by (1) eliminating the 100% FPL minimum eligibility threshold; (2) disregarding employer coverage affordability requirements for those with household incomes at or below 138% FPL; (3) treating qualified small employer health reimbursement arrangements as unaffordable for those with household incomes at or below 138% FPL; and (4) limiting excess advance PTC recapture to $300 ($150 for taxpayers using section 1(c) rates) for those with household incomes below 200% FPL, while exempting certain projected non-filers with incomes at or below 138% FPL from recapture and tax return filing requirements. The section also amends the employer shared responsibility provisions under IRC §4980H to exclude PTCs received by employees with household incomes at or below 138% FPL from the "applicable premium tax credit" definition used for the affordability safe harbor exemption. (Thus, affected employers may face penalties for offering unaffordable coverage to such low-income employees even if those employees receive subsidized Exchange coverage.)

This section revises the enhanced federal medical assistance percentage (FMAP) available under the Medicaid program for states' expenditures attributable to newly eligible mandatory individuals (i.e., certain adults up to 138% of the federal poverty level eligible due to ACA expansion provisions) by (1) extending the 90% FMAP through calendar quarters in 2025 (previously, 2020 and each year thereafter), (2) providing a 93% FMAP for calendar quarters in 2026 through 2028 (from 90%), and (3) providing a 90% FMAP for calendar quarters in 2029 and each year thereafter. (Thus, the temporary increase offsets the regular FMAP, which averages approximately 57% nationally, by providing states additional federal funding for expansion enrollees during those years.)