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119-hr8840119th CongressWALLET

Fair Care Act of 2026

Sponsored By: Representative Westerman, Bruce [R-AR-4]

Introduced

Summary

Modernizes Health Savings Accounts (HSAs). This bill would rewrite HSA rules and would also reshape coverage, pricing, drug approvals, Medicaid financing, and Medicare design to change how people buy and pay for care.

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  • Families and consumers: Would expand refundable premium tax credits up to 600% of the federal poverty level and create a new copper plan option, while extending dependent coverage through age 26 and allowing more flexible enrollment windows.
  • Hospitals, states and markets: Would create a $200 billion invisible guaranteed coverage pool and fund up to $1 billion per year in hospital infrastructure grants, add price-transparency and reporting rules for hospitals, and impose Medicare payment and site-neutral changes.
  • Providers, PBMs and drug makers: Would eliminate certain retroactive pharmacy price adjustments, require PBM machine-readable reporting, authorize $160 million for antitrust staff at the FTC, speed biosimilar substitution and set new conditional and provisional FDA approval pathways while shortening some biologic exclusivity periods.

*Would add at least $200 billion in new appropriations plus $1 billion per year for hospital grants and other smaller funds, increasing federal outlays.*

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Bill Overview

Analyzed Economic Effects

36 provisions identified: 14 benefits, 4 costs, 18 mixed.

Ban on preexisting-condition exclusions

If enacted, the bill would require insurers and group plans to accept applicants and bar any preexisting‑condition exclusions. Plans could not change eligibility or charge different premiums based on health status, past claims, genetic information without a diagnosis, or disability. The bill would also require guaranteed Medigap coverage without preexisting condition exclusions as of enactment.

Clear drug prices and hospital bills

If enacted, pharmacy benefit managers (PBMs) could not send your prescription data to PBM-owned pharmacies or steer you there unless you opt in in writing. PBMs must update reimbursement data frequently and give more pricing detail to plans and pharmacies. Hospitals would have to publish machine‑readable price lists and negotiated rates via open APIs, and group plans must provide semiannual machine‑readable reports about drug dispensing, spending, and out-of-pocket totals. The bill would also let plans offer a pre-set, single payment for certain shoppable procedures with rules on disclosure and minimum amounts.

Lower Medicare visit and monitoring costs

If enacted, Medicare Part B would let you pick a primary care doctor and cap your liability at no more than $5 per visit to that doctor. The doctor would get a monthly fee covering office visits, phone/email care, prevention, and vaccines instead of some Part B payments. Medicare would pay separately for remote patient monitoring in 90-day periods that a doctor can renew, and the government would set payment rates that count equipment and monitoring costs. Starting in 2026, if your yearly out-of-pocket cost-sharing reaches the catastrophic limit, you would not pay more that year. The bill also ties what counts as Medicare out-of-pocket costs to include Part A/B and prescription deductibles and coinsurance, and it would pay off-campus hospital outpatient services the same as in a doctor’s office for services on or after January 1, 2026.

More Medicare telehealth access

If enacted, the bill would expand Medicare telehealth. It would add new services and provider types and let the home count as an originating site. The HHS Secretary would speed up how telehealth is added and could waive some payment limits for services starting January 1, 2026. The Secretary must take public comments each year and review waivers at least every three years.

New lower-cost Exchange options

If enacted, the ACA marketplaces would add a 'copper' plan tier for plan years starting January 1, 2026. Copper plans would have about 50% actuarial value and out-of-pocket limits 30% higher than bronze plans. The bill also would appropriate funds from the Treasury to cover marketplace cost-sharing reductions for plan years 2026 through 2030. For plan years starting January 1, 2026, a State could instead apply to move CSR-equivalent funds into HSAs for qualifying enrollees with income at or below 250 percent of the poverty line who enroll in certain metal levels.

Repeal of investment income tax

If enacted, the bill would repeal the Net Investment Income Tax for taxable years beginning after December 31, 2026. Taxpayers with net investment income who were subject to that tax would no longer pay it for those future years. This mainly affects higher‑income investors.

Tax and liability rules for charity care doctors

If enacted, a new tax deduction would let direct primary care physicians deduct fees for qualified charity visits plus half of a monthly subscription fee per charity visit, and other providers could deduct unreimbursed Medicare-based value of charity care. The deduction is limited to gross receipts from physician services. Direct primary care physicians must publish subscription fees. The bill would also protect volunteer clinicians from civil liability for qualified charity care unless the conduct was grossly negligent.

Federal invisible reinsurance pool

If enacted, HHS would set up the Invisible Guaranteed Coverage Pool Reinsurance Program within two years and give States grants to run qualifying reinsurance pools. If a State does not participate, HHS would run a federal default pool. The bill would require ceding issuers to pay 90 percent of premium into the pool and let issuers keep the first $10,000 of benefits per ceded policy. The bill also would appropriate $200 billion to fund the program for the first 10 years.

Medicare drug price index option

If enacted, the Secretary would be able to pay for some Medicare Part B drugs using an international price index. The index must weigh countries with market-based drug policies more heavily. If used, this authority could lower Medicare Part B drug payment rates and reduce costs for beneficiaries.

Shorter drug exclusivity for biologics

This bill would reduce the statutory exclusivity period for reference biological products from 12 years to 5 years. The change would apply only to reference biologics licensed under subsection (a) on or after the date of enactment. If enacted, biosimilar competitors would be able to enter markets sooner and that would likely lower prices over time.

Health care lawsuit and liability reform

If enacted, the bill would make many changes to health care lawsuits. It would cap noneconomic damages at $250,000 per case and limit attorney contingency fees on a tiered scale. It would shorten and fix filing deadlines (generally three years after an event, three years after treatment ends, or one year after discovery) and require 90 days' notice and an expert affidavit before filing most suits. Courts would be able to order periodic payments for future damages of $50,000 or more. The bill would also bar naming prescribers in product‑liability suits for FDA‑approved products.

New limits on employer health benefits

If enacted, the bill would limit tax breaks for employer health benefits and HSAs. Employer HSA contributions would be tax‑free only up to twice the annual section 223(b)(2) limit and must meet offering and integration rules. Employer‑paid health coverage over $10,200 (self‑only) or $27,500 (other coverage) would no longer be tax‑free for tax years after 2026, with those thresholds indexed each year. The bill also narrows which employer health reimbursements are excluded from income and ends some current exclusions.

New review and petition rules for FDA actions

If enacted, the bill would add a new congressional review process for FDA rulemaking. Major FDA rules (annual costs of $100 million or more or major price or competition effects) would take effect only after Congress passes a joint resolution approving them. FDA would also have to identify rules to cut to offset new rule costs. The bill would require citizen petitions to be filed before starting suits to delay certain FDA approvals and would limit late petitions.

New corporate rule: no health payer tax breaks

If enacted, corporations incorporated after December 31, 2026 would not be allowed tax benefits for offering employee health insurance. The ban would not apply to health savings account contributions made by those corporations. This change affects companies formed after that date.

Changes to marketplace subsidies and rules

If enacted, the bill would change how premium tax credits are calculated and how Exchanges operate. It would create an age‑graded credit schedule with indexing for years after 2026 and allow credits and cost‑sharing reductions to buy bronze and copper plans. The law would also change a tax‑code cross‑reference affecting people offered employer coverage and give States more flexibility on open enrollment timing and faster 1332 waiver reviews for urgent or similar waivers.

Changes to Medicare enrollment rules

If enacted, some people who have Part A but not Part B (or vice versa) would be treated as enrolled in the missing Part unless they opt out during a special enrollment period. The bill would bar premium increases for periods before such deemed enrollment. The Secretary would create a process to let people waive Part A and later revoke that waiver, but revoking can trigger a late-enrollment penalty. The Secretary would also set up online tools to compare enrollment options beginning in 2026 and a process to auto-enroll certain full-benefit dual eligibles into low- or no-premium Medicare Advantage Prescription Drug plans, with the right to opt out or switch plans.

Big package of HSA rules and limits

If enacted, the bill would rewrite many HSA rules at once. It would set new annual HSA limits tied to plan actuarial value ($5,000, $4,300, $3,600), cap account balances at $50,000, and index those amounts to medical CPI and COLA rules. It would allow menstrual products as qualified expenses and say certain direct primary care fees are not insurance. You could deduct cash HSA contributions for months you were eligible and elect once to treat HSA contributions as Saver's Credit eligible. The bill would let you elect to deposit excess premium tax credit into your HSA (the deposit would be taxable income). It would add a last-month testing rule and a 10% penalty if you lose eligibility during the 12-month test, and nonqualified withdrawals would face a 20% extra tax. CMS could award up to $5 million a year in grants to boost HSA outreach.

Changes to marketplace subsidies and enrollment

If enacted, the bill would expand who can get premium tax credits and change how Exchanges work. It would let households with income up to 600% of the Federal Poverty Line claim credits for tax years after 2026. For people enrolled through certain State Exchanges, some "100 percent" references would instead use a State-set percentage. The Treasury would base advance credit amounts on prior-year returns, and Exchanges would end open enrollment on April 15. The bill would also impose a $4 tax per policy month on plans sold through an Exchange.

FEHB plans converted into HSA deposits

If enacted, Federal Employees Health Benefits (FEHB) plans would be converted into HSA deposits funded at the level of the second‑least costly silver plan in an individual's Exchange area. Employers would have to contribute at least the excess of that silver plan premium over 1/12 of 9.5% of household income for each month. Individuals filing returns would report employer HSA contributions for themselves and spouses. The Secretaries must issue regulations and safe harbors to prevent selective offering.

Major Medicaid payment reform

If enacted, the bill would change how the federal government computes payments to States for Medicaid. The Secretary would set base per-beneficiary amounts, standardize for risk and geography on a national, budget‑neutral basis, and exclude certain pass-through payments. The bill would create new per-beneficiary quarterly computations using CPI medical-care and projected GDP factors, and it would let States elect a new aggregate beneficiary-based payment system with a federal percentage generally set at 75% (or the State's FMAP if higher). States must choose a maintenance-of-effort option for full-benefit dual eligibles or a default applies. States would also be required to provide specified reporting, including managed-care medical loss ratios.

Major Medicare payment and eligibility changes

If enacted, the bill would change who can get some Medicare benefits and how Medicare pays providers. People who turn 65 on or after January 1, 2032 with $10,000,000 or more in lifetime wages would be ineligible for Part B and Part D and could not buy Medigap. The bill would change hospital reimbursement rules in dense, highly concentrated counties starting for services on or after January 1, 2026 and set transitional rates for 2028–2031. It would also insert a new Part E subpart and change which ACO categories qualify and how ACOs handle full‑risk enrollment and centralized payment.

Medicaid eligibility and state pilots

If enacted, States would get more ways to run Medicaid pilots and more contracting options for eligibility checks. States could run year‑long direct primary care pilots and may contract eligibility determinations to other agencies or contractors (without incentives to delay or deny). The bill would also change spend‑down rules and remove a 5% disregard in some income tests. It would bar using certain Federal payments for people with incomes above 100% of the poverty line, with specific exceptions for some pregnant women, children, and people continuously enrolled before enactment.

Insurer bargaining and anti‑steering contract rules

If enacted, the bill would let some private insurers jointly negotiate drug and hospital reimbursement prices for their reimbursement policies. It would also ban contracts that limit plan network design or stop steering enrollees, and require annual attestations and regulatory guidance within a year. The changes aim to increase insurer bargaining power while preventing anticompetitive contract terms that lock providers or limit patient steering.

Medicare cost and enrollment protections

If enacted, the bill would strengthen some Medicare financial protections. It would require MA‑PD plans to follow statutory out‑of‑pocket limit rules and not waive those limits starting January 1, 2026. It would also stop months with other health coverage from counting toward a Part B late‑enrollment penalty for months beginning after enactment. These changes would lower some beneficiaries' future out‑of‑pocket risks and premium penalties.

FTC funding to curb hospital mergers

This bill would authorize $160 million to be appropriated to the Federal Trade Commission. The money would be used to hire staff to investigate anti-competitive mergers and practices by inpatient and outpatient health care providers. If enacted, this would increase FTC capacity to review hospital and provider consolidation and enforcement of antitrust laws.

Grants, pilots, and telehealth reporting

If enacted, the bill would authorize $1 billion per year for fiscal years 2026 through 2035 for State hospital infrastructure grants to improve hospital capacity. It would appropriate $10 million to the Center for Medicare & Medicaid Innovation for research and pilots on cross‑state enrollment within one year of enactment. The Secretary would also be required to analyze telehealth waivers and post counts and spending impacts within two years of the first waiver and then every two years.

Higher Medicare pay for rural hospitals

This bill would raise Medicare payment percentage references used to reimburse Critical Access Hospitals. The reference would be 102 in 2026, rise by 1 percentage point each year through 2033, and be 110 thereafter. If enacted, Medicare reimbursements to many rural hospitals would increase and that would help their finances and access.

Drug pricing, pharmacy, and 340B rules

If enacted, the bill would require more transparency and protections around drug prices and pharmacy payments. Starting January 1, 2026, plans and PBMs would have to reflect manufacturer price reductions at the point of sale and pharmacies with new PDP/MA‑PD contracts would be protected from retroactive payment cuts. Covered 340B entities would submit annual reports beginning 14 months after enactment and some of those data would be posted online. The bill would also preempt State bans on dispensing FDA‑designated interchangeable biosimilars, expand FDA authority over conditional approvals, and give HHS discretionary authority to regulate copay assistance.

Faster access and safeguards for drugs

If enacted, the FDA would get two new faster pathways for high‑need drugs: a conditional-approval path and a provisional-approval path that let some drugs reach patients sooner. Sponsors must label these drugs clearly, require patient enrollment in observational registries, and submit registry and promotional materials on a set timetable. Conditional approvals would be time-limited (initially 2 years, with possible renewals up to statutory limits), and the law would require public reporting every two years. Group and federal health plans would have to cover conditionally approved drugs for their intended use with no cost sharing.

New HSA, HRA, employer rules

If enacted, the bill would rewrite many HSA rules. HSAs would generally accept cash only, with limited rollover exceptions, and employers would have to meet minimum 'qualified class' size rules (tiered by employer size) when offering HSAs. The bill would allow a 60-day HSA rollover once per year and create a one-year window after enactment to move remaining FSA, Archer MSA, or HRA balances into an HSA if moved before the end of that taxable year. The 2019 HRA joint rule would have the force of law, employers must give annual notices to enrollees about employer spending (plans with fewer than 100 enrollees are exempt), and HSAs would get bankruptcy protection like IRAs.

New rules for individual market plans

If enacted, the bill would change several rules in the individual and small‑group markets. It would set out‑of‑pocket maximums using a 2014 baseline increased by a premium adjustment percentage (rounded down to the next $50) and make the family cap twice the self‑only amount. The bill would allow an adult age‑rating ratio up to 5 to 1 and restrict insurers to rating only by a few factors. Short‑term plans under 12 months would be defined and must disclose renewability. Group plans must keep unmarried adult children on coverage until age 26. Insurers could temporarily stop offering coverage in a market if they show they lack reserves, subject to uniform application and a 180‑day limit.

Repeal of employer mandate reporting

If enacted, the bill would repeal the ACA employer shared‑responsibility tax and the employer reporting requirement for periods after December 31, 2026. Employers would no longer pay that federal penalty or file the related reports for periods after that date. This may lower costs and reporting burdens for employers but could reduce incentives to offer coverage to employees.

FTC oversight of tax‑exempt charities

If enacted, the bill would expand the Federal Trade Commission's definition of "corporation" to include organizations described in section 501(c)(3). This change would bring many tax‑exempt charities under FTC jurisdiction for antitrust and related enforcement.

Stronger enforcement and fines for issuers

If enacted, the bill would let the Secretary enforce issuer rules when a State fails to do so and impose civil money penalties on non‑Federal governmental plans and issuers. General penalties could be up to $100 per day per affected person, with special and minimum penalties for genetic‑discrimination failures. Penalties would be paid to the Secretary and used for enforcement.

Medicare and Medicaid provider finance changes

If enacted, the bill would change how Medicare and state Medicaid financing treat certain provider costs. It would stop using section 139A when allowing deductions tied to some Part D payments for tax years after 2026. It would increase the Medicare bad-debt percentage by 10 percentage points for cost reporting periods beginning in fiscal year 2027 through FY2029. It would repeal specified ACA Stark law changes and restore prior referral exceptions. It would also phase down the safe‑harbor percent for some State provider taxes on a schedule from 4% (2027–2035) to 0% from 2051 on.

Faster biosimilars and patent transparency

If enacted, the bill would make several changes to biological products and competition. It would require companies to file lists of patents and have the agency publish a searchable biologics patent and exclusivity database within one year and update it every 30 days. New biosimilars approved after enactment would be treated as interchangeable with the reference product. The bill would consolidate orphan‑drug exclusivity to one 7‑year period for the first rare indication and one 3‑year period for a later different rare indication, and it would change the 180‑day exclusivity trigger rules.

Sponsors & CoSponsors

Sponsor

Westerman, Bruce [R-AR-4]

AR • R

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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