SMOOTH Payments Act

The SMOOTH Payments Act modifies federal tax rules to allow health insurance plans that offer a specific payment option to qualify for subsidies, whereas currently only catastrophic plans are excluded. Under this proposal, eligible plans would let enrollees choose between paying zero cost-sharing at the time of service or paying monthly, capped amounts instead. This change directly affects individuals enrolled in qualified health plans by expanding the range of plans that can receive financial assistance starting in 2027. The bill aims to simplify out-of-pocket expenses by enabling a new payment structure similar to existing capitated models.