The Treasury Department announced proposed regulations aimed at preventing ineligible immigrants from receiving federal health insurance subsidies, with expanded verification requirements scheduled to take effect in 2027.
By yourNEWS Media Newsroom
Treasury Secretary Scott Bessent announced Wednesday, October 14, that the Trump administration is proposing tighter eligibility and verification requirements for federal health insurance tax credits, seeking to prevent individuals who do not qualify under immigration laws from receiving taxpayer-funded subsidies.
The proposed regulations, released by the Treasury Department and Internal Revenue Service, would implement provisions of President Donald Trump’s Working Families Tax Cuts legislation governing the Premium Tax Credit, a refundable tax benefit that helps eligible households purchase health insurance through Affordable Care Act marketplaces.
The changes would take effect in 2027 and require stronger verification of applicants’ eligibility before federal subsidies are issued.
“Hardworking American taxpayers should not be forced to subsidize health care for people who are ineligible under federal law,” Bessent said.
“Today’s proposed rules implement the common-sense reforms enacted by the Working Families Tax Cuts to close eligibility loopholes and ensure taxpayer-funded Premium Tax Credits are reserved for eligible Americans,” he continued.
“Under President Trump, this Administration is cracking down on fraud and corruption; holding bad actors accountable; lowering health care costs for Americans; and restoring integrity to our tax code and health care system.”
The Premium Tax Credit was created under the Affordable Care Act to help qualifying individuals and families afford monthly premiums for private health insurance purchased through federal or state marketplaces.
Eligible taxpayers may receive the credit in advance, allowing the federal government to make payments directly to insurers and reduce monthly premiums.
The administration’s proposal would strengthen eligibility checks for those advance payments and restrict subsidies to U.S. citizens, U.S. nationals and certain categories of lawfully present noncitizens who qualify under federal law.
Although the Treasury Department described the initiative as reserving benefits for Americans, the proposal does not restrict eligibility exclusively to U.S. citizens. Certain legally present immigrants would remain eligible.
The announcement follows the administration’s broader efforts to identify improper enrollment and fraudulent claims involving federal health insurance programs.
According to Treasury, a government fraud task force uncovered problems with unverified enrollment through Affordable Care Act marketplaces.
The department cited an earlier announcement by the Centers for Medicare & Medicaid Services that more than 760,000 unverified enrollees had been removed from federal marketplace records.
Treasury said the action generated approximately $2.2 billion in savings. However, the agency’s announcement did not establish that every removed enrollment represented intentional fraud.
The administration also said nearly 1 million Americans would receive approximately $500 each after being overcharged for health insurance coverage under previous marketplace arrangements.
The new proposal would expand verification requirements to reduce improper subsidy payments and improve accountability.
Treasury officials said additional regulations governing marketplace operations are expected from the Department of Health and Human Services.
Those rules would address the procedures insurers and health insurance exchanges must follow when determining applicants’ eligibility.
The proposed changes build on earlier actions by the administration to tighten access to refundable tax credits.
In August, Treasury and the IRS proposed separate regulations affecting refundable portions of the Earned Income Tax Credit, Child Tax Credit, American Opportunity Tax Credit and Adoption Tax Credit.
Those proposals focused on determining eligibility under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, which limits access to certain federal public benefits based on immigration status.
The health insurance proposal similarly reflects the administration’s position that federal benefits should be available only to individuals who satisfy statutory eligibility requirements.
However, the changes could also affect lawfully present immigrants whose eligibility has been narrowed by recent legislation.
Federal healthcare law already prohibits immigrants who are unlawfully present from receiving Premium Tax Credits. The latest proposal would strengthen verification procedures and implement additional restrictions affecting certain categories of legally present noncitizens.
The distinction is important because the administration’s proposed regulations concern both preventing improper payments and enforcing eligibility changes enacted by Congress.
Treasury has not yet provided a detailed public estimate of how many current subsidy recipients would lose eligibility under the proposed rules.
The regulations remain subject to the federal rulemaking process, including opportunities for public comment before they are finalized.
For consumers purchasing coverage through Affordable Care Act marketplaces, the immediate impact will depend on the final regulations and how federal and state exchanges implement the new verification requirements.
The administration maintains that the changes will reduce improper spending and strengthen oversight of federal health insurance subsidies, while the ultimate effects on enrollment, coverage and household premiums remain to be determined.
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