H.R. 6538 — More Affordable Care Act

This section establishes a health freedom waiver program under which the Secretary of HHS must waive specified ACA requirements—Exchanges (Part 1 of subtitle D), qualified health plan standards (Part 2), cost-sharing reductions (sec. 1402), premium tax credits (IRC sec. 36B), and the individual mandate (IRC sec. 5000A)—for health insurance coverage in states that notify intent at least 90 days prior (via governor or majority vote of state legislature) for plan years beginning on or after January 1, 2026, provided the state maintains an invisible high-risk insurance pool or equivalent risk-mitigation program. For states where waivers cause loss of premium tax credit or cost-sharing reduction eligibility, the Secretary redirects equivalent aggregate amounts—calculated using the national average silver benchmark premium among non-waiver states—directly into Trump Health Freedom Accounts (under IRC sec. 223(i)) of eligible residents who enroll in exchange plans, with payments made monthly, quarterly, or as a lump sum at resident option. (Thus, individuals retain federal subsidy value in personal accounts rather than through ACA mechanisms.) Participating states may operate their own exchange, authorize private commercial platforms (with federal application program interface access), or default to a federal exchange where state laws apply in place of waived provisions; the section also requires a coordinated process consolidating these waivers with existing sec. 1332 waivers and those under Medicaid, CHIP, and Medicare.

This section establishes Trump Health Freedom Accounts as a type of health savings account (HSA) for eligible individuals residing in a state with a waiver under section 1335 of the Patient Protection and Affordable Care Act (ACA) (i.e., state innovation waivers) and covered under a health plan authorized on an ACA Exchange pursuant to such waiver. (As background, HSAs are tax-advantaged accounts that individuals with high-deductible health plans use to pay qualified medical expenses; these accounts receive deposits transferred under ACA section 1335(a)(5), which are excluded from the HSA deduction limit.) The section applies standard HSA rules with modifications, including (1) treating transferred amounts as nondeductible; (2) permitting account funds to purchase health insurance (overriding current law restrictions); (3) requiring it to be an individual's sole HSA, with rollover permitted from any prior HSA but prohibiting other rollovers; and (4) barring use of funds for premiums on plans covering abortion services or specified gender transition procedures (i.e., hormonal or surgical interventions for gender transition, including puberty blockers, cross-sex hormones, castration, hysterectomy, phalloplasty, vaginoplasty, mastectomy, and others, subject to exclusions for disorders of sex development, infections, injuries, or imminent physical dangers). (Thus, these accounts expand HSA flexibility for insurance purchases in waiver states while imposing targeted use restrictions.)

This section modifies the small business health care tax credit under IRC §45R (i.e., up to 50% [35% for tax-exempt employers] of employer contributions toward employee premiums for qualified health plans offered through an Exchange) for eligible small employers in a state with a waiver under ACA §1335, effective for taxable years beginning after December 31, 2025. Specifically, for such employers, it (1) sets the credit percentage at 50% for all employers, including tax-exempt ones (from 35%); (2) treats any health plan authorized for the state's Exchange under the waiver as a qualified health plan; (3) eliminates the phaseout reduction in credit percentage for employers with average wages between $25,000 and $50,000 or full-time equivalents between 10 and 25; (4) defines eligible small employer based on an average of 50 or fewer full-time equivalent employees during the prior year (from 25), without regard to the prior subparagraph (B) restriction; (5) modifies the employee definition to disregard certain exclusions; (6) applies the credit for the first taxable year the employer offers a qualified health plan and all subsequent years (i.e., permanently, with no two-year limit); and (7) disregards special rules limiting the credit for tax-exempt employers.

This section directs the Secretary of Health and Human Services, in coordination with the Secretaries of the Treasury and Labor, to update, not later than 90 days after enactment, all regulations and guidance issued pursuant to Executive Order 13877 (June 24, 2019) on improving price and quality transparency in healthcare to enable consumer choice, including by— (1) requiring disclosure of actual prices of items and services, not price estimates; (2) issuing updated guidance or regulations to standardize pricing information for easy comparability across hospitals and health plans; (3) issuing guidance or proposed regulatory action to update enforcement policies ensuring compliance with transparent reporting of complete, accurate, and meaningful data; and (4) requiring public reporting of outcomes data by providers.