Direct Payments of up to $1,500 for Millions of Americans Proposed by Congress

Congress has proposed that millions of Americans receive direct payments to expand their Health Savings Account (HSA) balance, helping them pay for out-of-pocket health care costs. Introduced in December 2025 by Senate Finance Committee Chair Mike Crapo and HELP Committee Chair Bill Cassidy, the Health Care Freedom for Patients Act proposes several changes that could impact how the middle class pays for health care.

Here's what you need to know about what this bill could mean for your health care and if it could help pay your bills.

Payments for the lower and middle class

The bill calls for the Department of Health and Human Services to deposit payments into HSAs of eligible Americans. Individuals aged 18 to 49 would receive $1,000, while individuals aged 50 to 64 would receive $1,500. The bill reflects President Trump's desire for the federal government to provide resources directly to individuals, rather than to insurance companies.

Who could qualify to receive the payments

To qualify for the payments, individuals would need to have an HSA paired with a bronze or catastrophic plan purchased through the ACA exchange in 2026 and 2027.

Qualifying individuals would also need to have an income at or below 700% of the federal poverty level. According to the 2026 poverty guidelines, 700% of the federal poverty level for an individual is an annual income of $111,720. For a family of four, the household's income could be $231,000 or less to qualify. The bill casts a wide net that includes a significant portion of the lower and middle class.

How HSA payments could be used

Recipients of the funds could use them to pay for the services and providers that they prefer. That could include paying for out-of-network providers, dental or vision care, or primary care services. HSA funds can be used to cover deductibles, copays, prescriptions, ambulance services, hearing aids and batteries, vaccinations, insulin, and more. However, the act prohibits the use of these federal funds for abortion or gender transition services.

Changes to health insurance costs and eligibility

The bill also calls for changes to health insurance costs by reducing premiums by approximately 11% beginning in 2027. It would reduce cost-sharing for silver plan enrollees with incomes up to 250% of the federal poverty level.

Additionally, in 2027, the bill would allow any individual to enroll in a catastrophic health insurance plan through the ACA. Currently, access to those plans is limited to adults under age 30 or individuals who qualify for a hardship exemption. This change would give individuals and households more options in their health insurance choices, especially if they're looking for a minimal-cost health insurance plan.

No extension of health insurance subsidies

While the bill provides funds to qualifying Americans, it does not extend the health insurance subsidies created during the COVID-19 pandemic to make health insurance more affordable. First Focus Campaign for Children warned that expiring subsidies could cause premiums to more than double on average for more than 20 million Americans who rely on the financial help.

Additionally, the HSA deposits of $1,000 to $1,500 could not offset the increase in monthly premiums, meaning that health insurance will remain unaffordable for many. A bronze plan, one of the two plans required to qualify for the HSA deposits, carries the highest deductible, and Bronze plan deductibles are projected to be nearly $7,500 in 2026. Families could be particularly at risk financially because of those high deductibles.

Restrictions on Medicaid

If the bill passes, the Medicaid program could also be changed in several ways. It will reduce Medicaid funding to states that provide Medicaid coverage to illegal immigrants. According to the KFF, eligible noncitizen immigrants account for 6% of Medicaid and Children's Health Insurance Program enrollees.

The bill will require states to verify citizenship or eligible immigration status prior to offering individuals Medicaid coverage. It also prohibits the use of Medicaid funds for gender transition services.

What's next for the bill

The Health Care Freedom for Patients Act is currently a proposed bill. It failed a Senate cloture vote in December 2025 along party lines, meaning it has not yet become law.

On January 8, 2026, the U.S. House of Representatives voted to extend ACA premium tax credits for three years. The bill passed on a 230-196 vote, receiving bipartisan support. It will now be sent to the Senate.

Bottom line

The idea of receiving a direct HSA payment can be tempting, especially given the climbing costs of health care expenses. The bill is an effort to help Americans cope with those costs without paying money directly to insurance companies. But the bill isn't a sure thing, and it wouldn't necessarily solve the issue of health insurance premium increases due to expired subsidies. It's possible that the bill may resurface in broader budget or reconciliation negotiations, and it may change and evolve during deliberations.

Keeping up with the changing health care landscape can be difficult, but it's important to stay informed about how these changes might affect you. A quality health insurance plan can potentially help you save on healthcare costs and keep more cash in your wallet.

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