Create structural reform for house ACA proposal

changelog_entry.yaml

@@ -0,0 +1,4 @@
+- bump: minor
+  changes:
+    added:
+      - ACA PTC 600% FPL cliff reform extending 2021 subsidy levels with 8.5% contribution cap to 600% FPL

policyengine_us/parameters/gov/contrib/aca/ptc_600_fpl_cliff/brackets.yaml

@@ -0,0 +1,49 @@
+# ACA PTC contribution brackets with 2021 subsidy levels extended to 600% FPL.
+# Maintains 8.5% contribution rate from 400% to 600% FPL, then ends eligibility.
+
+description: ACA PTC contribution percentages by household income (2021 levels extended to 600% FPL).
+
+metadata:
+  type: single_amount
+  threshold_unit: /1
+  rate_unit: /1
+  label: ACA PTC contribution rate brackets (600% FPL cliff)
+  reference:
+    - title: 26 U.S. Code § 36B(b)(3)(A) - Refundable credit for coverage under a qualified health plan
+      href: https://www.law.cornell.edu/uscode/text/26/36B#b_3_A
+    - title: American Rescue Plan Act of 2021 - ACA premium subsidy expansion
+      href: https://www.congress.gov/bill/117th-congress/house-bill/1319
+    - title: Inflation Reduction Act of 2022 - ACA subsidy extension through 2025
+      href: https://www.congress.gov/bill/117th-congress/house-bill/5376
+    - title: Affordable Care Act Enhancement Act - Proposed subsidy extension to 600% FPL
+      href: https://www.politico.com/f/?id=0000019a-6b87-dc40-a1bb-6fe74c510000
+
+brackets:
+  - threshold:
+      2026-01-01: 0
+    amount:
+      2026-01-01: 0
+  - threshold:
+      2026-01-01: 1.5
+    amount:
+      2026-01-01: 0
+  - threshold:
+      2026-01-01: 2.0
+    amount:
+      2026-01-01: 0.02
+  - threshold:
+      2026-01-01: 2.5
+    amount:
+      2026-01-01: 0.04
+  - threshold:
+      2026-01-01: 3.0
+    amount:
+      2026-01-01: 0.06
+  - threshold:
+      2026-01-01: 4.0
+    amount:
+      2026-01-01: 0.085
+  - threshold:
+      2026-01-01: 6.0
+    amount:
+      2026-01-01: 0.085

policyengine_us/parameters/gov/contrib/aca/ptc_600_fpl_cliff/in_effect.yaml

@@ -0,0 +1,9 @@
+description: Whether the ACA PTC 600% FPL cliff extension is in effect.
+
+values:
+  0000-01-01: false
+
+metadata:
+  unit: bool
+  period: year
+  label: ACA PTC 600% FPL cliff in effect

policyengine_us/parameters/gov/contrib/aca/ptc_600_fpl_cliff/income_eligibility.yaml

@@ -0,0 +1,28 @@
+# Extended income eligibility for ACA PTC up to 600% FPL.
+# Allows subsidies to continue up to 600% FPL with 8.5% contribution cap.
+
+description: Eligibility for ACA Premium Tax Credit by percent of modified AGI to federal poverty line (600% FPL limit).
+
+metadata:
+  type: single_amount
+  period: year
+  threshold_unit: /1
+  amount_unit: bool
+  label: ACA PTC income eligibility conditions (600% FPL cliff)
+  reference:
+    - title: 26 U.S. Code § 36B(c)(1) - Eligibility requirements
+      href: https://www.law.cornell.edu/uscode/text/26/36B#c_1
+
+brackets:
+  - threshold:
+      2026-01-01: 0
+    amount:
+      2026-01-01: false
+  - threshold:
+      2026-01-01: 1.00
+    amount:
+      2026-01-01: true
+  - threshold:
+      2026-01-01: 6.0
+    amount:
+      2026-01-01: false

policyengine_us/reforms/aca/__init__.py

@@ -4,3 +4,6 @@
 from policyengine_us.reforms.aca.aca_ptc_simplified_bracket import (
     create_aca_ptc_simplified_bracket_reform,
 )
+from policyengine_us.reforms.aca.aca_ptc_600_fpl_cliff import (
+    create_aca_ptc_600_fpl_cliff_reform,
+)

policyengine_us/reforms/aca/aca_ptc_600_fpl_cliff.py

@@ -0,0 +1,136 @@
+from policyengine_us.model_api import *
+from policyengine_core.periods import period as period_
+
+
+def create_aca_ptc_600_fpl_cliff() -> Reform:
+    class aca_required_contribution_percentage(Variable):
+        """
+        ACA required contribution percentage with 2021 subsidy levels extended to 600% FPL.
+
+        This reform extends the enhanced ACA premium subsidies enacted under the
+        American Rescue Plan Act of 2021 (ARPA), but moves the eligibility cliff
+        from 400% FPL to 600% FPL. The reform maintains the 8.5% maximum
+        contribution rate for households between 400% and 600% FPL.
+
+        Under this reform:
+        - 0-150% FPL: 0% contribution
+        - 150-200% FPL: 0-2% contribution
+        - 200-250% FPL: 2-4% contribution
+        - 250-300% FPL: 4-6% contribution
+        - 300-400% FPL: 6-8.5% contribution
+        - 400-600% FPL: 8.5% contribution (extended)
+        - Above 600% FPL: No subsidy eligibility
+
+        This eliminates the subsidy cliff that would otherwise occur at 400% FPL,
+        making more middle-income households eligible for ACA subsidies while
+        maintaining a cap on contribution percentages.
+        """
+
+        value_type = float
+        entity = TaxUnit
+        label = "ACA required contribution percentage with 600% FPL cliff (i.e., IRS Form 8962 'applicable figure')"
+        unit = "/1"
+        definition_period = YEAR
+        reference = [
+            "26 U.S. Code § 36B(b)(3)(A) - Refundable credit for coverage under a qualified health plan",
+            "https://www.law.cornell.edu/uscode/text/26/36B#b_3_A",
+            "American Rescue Plan Act of 2021",
+            "https://www.congress.gov/bill/117th-congress/house-bill/1319",
+            "Affordable Care Act Enhancement Act - Proposed subsidy extension to 600% FPL",
+            "https://www.politico.com/f/?id=0000019a-6b87-dc40-a1bb-6fe74c510000",
+        ]
+
+        def formula(tax_unit, period, parameters):
+            magi_frac = tax_unit("aca_magi_fraction", period)
+            p = parameters(period).gov.contrib.aca.ptc_600_fpl_cliff.brackets
+            return np.interp(magi_frac, p.thresholds, p.amounts)
+
+    class is_aca_ptc_eligible(Variable):
+        """
+        Extended ACA PTC eligibility up to 600% FPL.
+        """
+
+        value_type = bool
+        entity = Person
+        label = "Person is eligible for ACA premium tax credit and pays ACA premium"
+        definition_period = YEAR
+
+        def formula(person, period, parameters):
+            # determine status eligibility for ACA PTC
+            fstatus = person.tax_unit("filing_status", period)
+            separate = fstatus == fstatus.possible_values.SEPARATE
+            immigration_eligible = person(
+                "is_aca_ptc_immigration_status_eligible", period
+            )
+            taxpayer_has_itin = person.tax_unit("taxpayer_has_itin", period)
+            is_status_eligible = (
+                taxpayer_has_itin & ~separate & immigration_eligible
+            )
+
+            # determine coverage eligibility for ACA plan
+            INELIGIBLE_COVERAGE = [
+                "is_medicaid_eligible",
+                "is_chip_eligible",
+                "is_aca_eshi_eligible",
+                "is_medicare_eligible",
+            ]
+            is_coverage_eligible = (
+                add(person, period, INELIGIBLE_COVERAGE) == 0
+            )
+
+            # determine income eligibility for ACA PTC (using reform parameter)
+            p = parameters(period).gov.contrib.aca.ptc_600_fpl_cliff
+            magi_frac = person.tax_unit("aca_magi_fraction", period)
+            is_income_eligible = p.income_eligibility.calc(magi_frac)
+
+            # determine which people pay an age-based ACA plan premium
+            p_aca = parameters(period).gov.aca
+            is_aca_adult = person("age", period) > p_aca.slcsp.max_child_age
+            child_pays = (
+                person("aca_child_index", period) <= p_aca.max_child_count
+            )
+            pays_aca_premium = is_aca_adult | child_pays
+
+            return (
+                is_status_eligible
+                & is_coverage_eligible
+                & is_income_eligible
+                & pays_aca_premium
+            )
+
+    class reform(Reform):
+        def apply(self):
+            self.update_variable(aca_required_contribution_percentage)
+            self.update_variable(is_aca_ptc_eligible)
+
+    return reform
+
+
+def create_aca_ptc_600_fpl_cliff_reform(
+    parameters, period, bypass: bool = False
+):
+    if bypass:
+        return create_aca_ptc_600_fpl_cliff()
+
+    p = parameters.gov.contrib.aca.ptc_600_fpl_cliff
+    current_period = period_(period)
+
+    # Check if reform is active within a 5-year lookahead window
+    # This allows the reform to be selected in the web app interface
+    # even if it's scheduled to start in a future year
+    reform_active = False
+    for i in range(5):
+        if p(current_period).in_effect:
+            reform_active = True
+            break
+        current_period = current_period.offset(1, "year")
+
+    if reform_active:
+        return create_aca_ptc_600_fpl_cliff()
+    else:
+        return None
+
+
+aca_ptc_600_fpl_cliff = create_aca_ptc_600_fpl_cliff_reform(
+    None, None, bypass=True
+)

policyengine_us/reforms/reforms.py

@@ -117,6 +117,7 @@
 from .aca import (
     create_aca_ptc_additional_bracket_reform,
     create_aca_ptc_simplified_bracket_reform,
+    create_aca_ptc_600_fpl_cliff_reform,
 )
 
 
@@ -269,6 +270,9 @@ def create_structural_reforms_from_parameters(parameters, period):
     aca_ptc_simplified_bracket = create_aca_ptc_simplified_bracket_reform(
         parameters, period
     )
+    aca_ptc_600_fpl_cliff = create_aca_ptc_600_fpl_cliff_reform(
+        parameters, period
+    )
 
     reforms = [
         afa_reform,
@@ -324,6 +328,7 @@ def create_structural_reforms_from_parameters(parameters, period):
         ri_exemption,
         aca_ptc_additional_bracket,
         aca_ptc_simplified_bracket,
+        aca_ptc_600_fpl_cliff,
     ]
     reforms = tuple(filter(lambda x: x is not None, reforms))
 

policyengine_us/tests/policy/contrib/aca/ptc_600_fpl_cliff.yaml

@@ -0,0 +1,125 @@
+- name: Single filer at 0% FPL - zero contribution
+  period: 2026
+  reforms: policyengine_us.reforms.aca.aca_ptc_600_fpl_cliff.aca_ptc_600_fpl_cliff
+  absolute_error_margin: 0.00001
+  input:
+    gov.contrib.aca.ptc_600_fpl_cliff.in_effect: true
+    aca_magi_fraction: 0.0
+  output:
+    aca_required_contribution_percentage: 0.0
+
+- name: Single filer at 150% FPL - zero contribution
+  period: 2026
+  reforms: policyengine_us.reforms.aca.aca_ptc_600_fpl_cliff.aca_ptc_600_fpl_cliff
+  absolute_error_margin: 0.00001
+  input:
+    gov.contrib.aca.ptc_600_fpl_cliff.in_effect: true
+    aca_magi_fraction: 1.5
+  output:
+    aca_required_contribution_percentage: 0.0
+
+- name: Single filer at 200% FPL - 2% contribution
+  period: 2026
+  reforms: policyengine_us.reforms.aca.aca_ptc_600_fpl_cliff.aca_ptc_600_fpl_cliff
+  absolute_error_margin: 0.00001
+  input:
+    gov.contrib.aca.ptc_600_fpl_cliff.in_effect: true
+    aca_magi_fraction: 2.0
+  output:
+    aca_required_contribution_percentage: 0.02
+
+- name: Single filer at 250% FPL - 4% contribution
+  period: 2026
+  reforms: policyengine_us.reforms.aca.aca_ptc_600_fpl_cliff.aca_ptc_600_fpl_cliff
+  absolute_error_margin: 0.00001
+  input:
+    gov.contrib.aca.ptc_600_fpl_cliff.in_effect: true
+    aca_magi_fraction: 2.5
+  output:
+    aca_required_contribution_percentage: 0.04
+
+- name: Single filer at 300% FPL - 6% contribution
+  period: 2026
+  reforms: policyengine_us.reforms.aca.aca_ptc_600_fpl_cliff.aca_ptc_600_fpl_cliff
+  absolute_error_margin: 0.00001
+  input:
+    gov.contrib.aca.ptc_600_fpl_cliff.in_effect: true
+    aca_magi_fraction: 3.0
+  output:
+    aca_required_contribution_percentage: 0.06
+
+- name: Single filer at 400% FPL - 8.5% contribution (old cliff point)
+  period: 2026
+  reforms: policyengine_us.reforms.aca.aca_ptc_600_fpl_cliff.aca_ptc_600_fpl_cliff
+  absolute_error_margin: 0.00001
+  input:
+    gov.contrib.aca.ptc_600_fpl_cliff.in_effect: true
+    aca_magi_fraction: 4.0
+  output:
+    aca_required_contribution_percentage: 0.085
+
+- name: Single filer at 500% FPL - 8.5% contribution (flat rate)
+  period: 2026
+  reforms: policyengine_us.reforms.aca.aca_ptc_600_fpl_cliff.aca_ptc_600_fpl_cliff
+  absolute_error_margin: 0.00001
+  input:
+    gov.contrib.aca.ptc_600_fpl_cliff.in_effect: true
+    aca_magi_fraction: 5.0
+  output:
+    aca_required_contribution_percentage: 0.085
+
+- name: Single filer at 600% FPL - 8.5% contribution (new cliff point)
+  period: 2026
+  reforms: policyengine_us.reforms.aca.aca_ptc_600_fpl_cliff.aca_ptc_600_fpl_cliff
+  absolute_error_margin: 0.00001
+  input:
+    gov.contrib.aca.ptc_600_fpl_cliff.in_effect: true
+    aca_magi_fraction: 6.0
+  output:
+    aca_required_contribution_percentage: 0.085
+
+- name: Single filer at 175% FPL - interpolated 1% contribution
+  period: 2026
+  reforms: policyengine_us.reforms.aca.aca_ptc_600_fpl_cliff.aca_ptc_600_fpl_cliff
+  absolute_error_margin: 0.00001
+  input:
+    gov.contrib.aca.ptc_600_fpl_cliff.in_effect: true
+    aca_magi_fraction: 1.75
+  output:
+    aca_required_contribution_percentage: 0.01
+
+- name: Single filer at 350% FPL - interpolated 7.25% contribution
+  period: 2026
+  reforms: policyengine_us.reforms.aca.aca_ptc_600_fpl_cliff.aca_ptc_600_fpl_cliff
+  absolute_error_margin: 0.00001
+  input:
+    gov.contrib.aca.ptc_600_fpl_cliff.in_effect: true
+    aca_magi_fraction: 3.5
+  output:
+    aca_required_contribution_percentage: 0.0725
+
+- name: Baseline comparison at 400% FPL - shows elimination of cliff
+  period: 2026
+  absolute_error_margin: 0.00001
+  input:
+    aca_magi_fraction: 4.0
+  output:
+    aca_required_contribution_percentage: 0.0996
+
+- name: Baseline comparison at 500% FPL - shows new eligibility
+  period: 2026
+  absolute_error_margin: 0.00001
+  input:
+    aca_magi_fraction: 5.0
+  output:
+    aca_required_contribution_percentage: 0.0996
+
+- name: Edge case - Very high income at 700% FPL extends last bracket
+  period: 2026
+  reforms: policyengine_us.reforms.aca.aca_ptc_600_fpl_cliff.aca_ptc_600_fpl_cliff
+  absolute_error_margin: 0.00001
+  input:
+    gov.contrib.aca.ptc_600_fpl_cliff.in_effect: true
+    aca_magi_fraction: 7.0
+  output:
+    aca_required_contribution_percentage: 0.085