http://newiprogressive.com/images/stories/S5/health-care-costs-s444.jpgAs gridlock in Congress stalls progress, Wisconsin needs action to ensure our families won't see their premiums skyrocket now.

Madison, Wis. — Today, Sen. Jeff Smith (D-Eau Claire) and Rep. Christian Phelps (D-Eau Claire) introduced legislation to create a state level Premium Assistance Individual Income Tax Credit to help Wisconsinites maintain access to affordable health coverage.

"Health care affordability shouldn't depend on whether Congress acts," said Sen. Smith. "This legislation ensures that Wisconsin families won't see their premiums skyrocket now that the enhanced federal assistance has ended. We're stepping up to provide that peace of mind."

This legislation would allow Wisconsinites who pay monthly premiums for a qualified health plan under the Affordable Care Act to claim a refundable individual income tax credit equal to the amount they could previously claim under the now-expired enhanced tax credits. By immediately addressing the loss of federal enhanced premiums, this bill would work to stabilize the marketplace and help consumers maintain affordable coverage.

"Thousands of Wisconsinites have relied on premium assistance to access their health insurance," Rep. Phelps said. "Allowing that support to disappear -- especially in the wake of hospital closures and growing healthcare uncertainty in the Eau Claire area -- would be devastating, forcing families to weigh unaffordable health insurance against other basic necessities. This bill would prevent people from falling through the cracks."

The bill works as a safety net. Wisconsinites who pay premiums for a qualified health plan can claim a state income tax credit for the same amount they would have received under federal law. If the credit is larger than what someone owes in taxes, they get the difference as a refund.

A copy of the Co-Sponsorship Memorandum is presented below.

TO: All Legislators

FROM: Sen. Jeff Smith and Rep. Christian Phelps

DATE: February 20, 2026

RE: Co-Sponsorship of LRB 6418/1 relating to: a premium assistance individual income tax credit and making an appropriation

DEADLINE: Wednesday, February 25, 2026 @ 5pm

President Trump and Congressional Republicans have made it harder for working families to access affordable health care. Wisconsinites are at a high risk of losing health care coverage due to HR 1 (OBBBA) and the expiration of enhanced federal premiums. In the wake of these federal changes, we are putting forward several bills to lower costs and increase access at the state level.

The Affordable Care Act tax credits have helped make healthcare coverage more affordable for millions of Americans. Congressional Republicans have allowed enhanced Affordable Care Act premium tax credits to expire. Wisconsin lawmakers have an obligation to address this lack of leadership from the federal government. Although the state government cannot fully replace federal support, Wisconsin can take meaningful action to reduce rising healthcare costs for working families.

In 2026, premiums for health care insurance bought through the Affordable Care Act open marketplace are set to increase an average of 16% in Wisconsin, with some as high as 34.5%. A report from KFF found that the Affordable Care Act’s enhanced tax credits lowered marketplace premiums by an average of 44% annually. For the average working family, this could mean an increase of hundreds of dollars a month.

LRB-6418/1 allows Wisconsinites who pay monthly premiums for a qualified health plan under the Affordable Care Act to claim a refundable individual income tax credit equal to the amount they could previously claim under the now-expired enhanced tax credits. By immediately addressing the loss of federal enhanced premiums, this bill would work to stabilize the marketplace and help consumers maintain affordable coverage.

If you would like to co-sponsor this legislation, please respond to this email or contact Senator Smith’s office or Representative Phelps office by Wednesday, February 25, 2026. All co-sponsors will be added to both versions of the bill unless otherwise specified.

Analysis by the Legislative Reference Bureau

Beginning in 2026, this bill allows an individual who pays monthly premiums for a qualified health plan under the federal Affordable Care Act to claim as a refundable individual income tax credit the premium assistance amount that the individual would have been eligible to claim under federal law for a taxable year beginning after December 31, 2020, and before January 1, 2026. During that period, an eligible individual would have been able to claim under federal law premium assistance credits to lower the costs of premiums for qualified health plans offered under the ACA.

Under the bill, if the amount of the credit exceeds the individual’s tax liability, the individual will receive the excess as a refund. Finally, the bill prohibits an individual from claiming the credit for taxable years beginning after 2025 if the individual is again eligible to receive premium assistance credits under federal law.

For further information see the state fiscal estimate, which will be printed as an appendix to this bill.