Key Takeaways
- Repayment caps are gone: starting with 2026 coverage, you repay all excess advance credits at tax time.
- Going $1 over 400% of the poverty level means no premium credit for 2026 or 2027 coverage.
- The 400% cutoff for one person is $62,600 for 2026 coverage and $63,840 for 2027.
- HealthCare.gov enrollment runs November 1 to January 15; enroll by December 15 for January 1 coverage.
If you bought ACA marketplace coverage for 2026 and your premium jumped — sometimes by hundreds of dollars a month — you’re not imagining it. The enhanced premium tax credits that made Obamacare coverage cheap for millions of people expired at the end of 2025, and Congress hasn’t renewed them. For 2026 and 2027 coverage, the marketplace reverted to the original, less generous ACA subsidy rules that were in place before 2021.
This guide walks through what actually changed, what income limits apply now, and what to expect when you shop for 2027 coverage during open enrollment this fall.
What Changed: The Enhanced Subsidies Are Gone
From 2021 through 2025, two pieces of legislation — the American Rescue Plan and then the Inflation Reduction Act — temporarily boosted ACA premium tax credits in two ways: they lowered the percentage of income everyone was expected to pay toward coverage, and they eliminated the hard income cutoff at 400% of the Federal Poverty Level (FPL), letting higher earners qualify for at least a partial subsidy.
Both of those enhancements expired on December 31, 2025. Nothing replaced them. As a result, 2026 marketplace coverage — and now 2027 coverage — runs under the original ACA subsidy formula: a steeper sliding scale of what you owe, and a firm cutoff at 400% FPL where the subsidy disappears entirely.
The practical result: people who kept their same income and same plan saw their monthly premium increase substantially for 2026, purely because the subsidy math changed under them. Estimates put the average increase in what enrollees pay out of pocket at around 58% nationally for 2026, with the biggest hit falling on people just above 400% FPL who lost their subsidy completely.
The Subsidy Cliff Is Back
The single most important change to understand: if your Modified Adjusted Gross Income (MAGI) is even $1 over 400% of the FPL for your household size, you get zero premium tax credit. Not a reduced amount — none.
This is different from 2021-2025, when there was no upper income limit; subsidies just phased down gradually as income rose. That gradual slope is gone for 2026 and 2027. If your income is likely to land close to the 400% line, it’s worth modeling both sides carefully before you finalize your enrollment, since crossing it by a small margin can mean paying full price for the year and owing back any subsidy already received when you file your taxes.
2026 and 2027 Income Limits by Household Size
Marketplace subsidy eligibility is based on your MAGI compared to the Federal Poverty Level for your household size — but there’s a one-year lag built into the calculation. Your eligibility for 2026 coverage is based on the FPL figures published in 2025. Your eligibility for 2027 coverage will be based on the FPL figures published in 2026.
Federal Poverty Level — 48 Contiguous States and Washington DC
| Household Size | 2025 FPL (used for 2026 coverage) | 2026 FPL (used for 2027 coverage) |
|---|---|---|
| 1 | $15,650 | $15,960 |
| 2 | $21,150 | $21,640 |
| 3 | $26,650 | $27,320 |
| 4 | $32,150 | $33,000 |
| 5 | $37,650 | $38,680 |
| 6 | $43,150 | $44,360 |
Add $5,500 (2025) or $5,680 (2026) per additional household member beyond 8. Alaska and Hawaii use higher FPL figures — check healthcare.gov if you live in either state.
The 400% cutoff for one person is $62,600 for 2026 coverage and $63,840 for 2027 coverage. For a family of four, it’s $128,600 and $132,000. Go one dollar over that on your 2026 tax return and the full-year subsidy is gone.
What You’re Expected to Pay Went Up Sharply
Even for people who still qualify for a subsidy, the amount you’re expected to contribute toward the benchmark plan (the second-lowest-cost Silver plan in your area) increased substantially for 2026. The IRS publishes these “applicable percentages” — the share of your income you’re expected to pay toward that benchmark plan before the subsidy covers the rest.
| Income (% of FPL) | 2025 | 2026 | 2027 |
|---|---|---|---|
| Under 133% | 0% | 2.1% | 2.15% |
| 133% to 150% | 0% | 3.14% to 4.19% | 3.23% to 4.3% |
| 150% to 200% | 0% to 2% | 4.19% to 6.6% | 4.3% to 6.78% |
| 200% to 250% | 2% to 4% | 6.6% to 8.44% | 6.78% to 8.66% |
| 250% to 300% | 4% to 6% | 8.44% to 9.96% | 8.66% to 10.22% |
| 300% to 400% | 6% to 8.5% | 9.96% | 10.22% |
| Over 400% | 8.5% | No subsidy | No subsidy |
The 2027 column comes from IRS Rev. Proc. 2026-26. Every tier goes up a little, and the top rate rises from 9.96% to 10.22%.
At the lower end of the income scale, what you’re expected to pay roughly doubled or tripled between 2025 and 2026. Someone at 150% of FPL who paid nothing toward the benchmark plan in 2025 might now owe over 4% of their income toward it in 2026.
A Rough Example
A single 45-year-old with $40,000 in MAGI (about 256% of the 2025 FPL used for 2026 coverage) falls in the 250%–300% tier. At roughly 9% of income, that’s about $3,600 a year, or $300/month, toward the benchmark Silver plan — up meaningfully from what the same income would have owed in 2025. If the benchmark plan itself costs more than that in their area, the subsidy covers the difference; if it costs less, they pay the lower amount.
Because benchmark premiums vary a lot by state, county, and age, the healthcare.gov subsidy calculator (or your state’s own exchange calculator, if you’re not in a federal-marketplace state) is the only way to get an exact number for your situation.
Get ACA subsidy and premium changes by email
I post when the final 2027 rules, premiums and IRS figures come out. Get those updates free in your inbox.
Free. You’ll get my new posts, including these updates. Unsubscribe anytime, and check your spam folder for the confirmation email.
Cost-Sharing Reductions Still Apply Under 250% FPL
Separate from the premium tax credit, if your MAGI is under 250% of FPL, you also qualify for cost-sharing reductions — lower deductibles, copays, and out-of-pocket maximums — but only if you enroll in a Silver plan. This part of the ACA wasn’t affected by the enhanced-subsidy expiration. If you’re in this income range, a Silver plan often ends up cheaper in total cost than a Bronze plan even though the sticker premium is higher, because of the reduced cost-sharing.
Minimum Income and the Medicaid Gap
There’s a floor as well as a ceiling. To buy subsidized marketplace coverage, your estimated income generally needs to be at least 138% of FPL in states that expanded Medicaid (most states), or 100% of FPL in states that didn’t. If your income is below that floor, the marketplace routes you to Medicaid instead.
As of 2026, these states have not expanded Medicaid: Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming. If you live in one of these states and your income falls between 100% and 138% of FPL, you may be caught in the “Medicaid gap” — too high for Medicaid, but technically eligible for marketplace subsidies at that income level. If your income is under 100% FPL in a non-expansion state, you generally won’t qualify for either program.
2027 Premiums: Expect Another Round of Increases
On top of the subsidy changes, the underlying cost of ACA plans is also rising. KFF’s review of 276 insurers’ 2027 filings shows a proposed median increase of about 15% — the second consecutive year of double-digit hikes. Insurers point to a few factors: higher medical costs generally, and a sicker, smaller risk pool left behind after roughly 3 million healthier enrollees dropped coverage in 2026 once their subsidies shrank or disappeared. When healthier, cheaper-to-insure people leave the pool, average costs for those who remain go up — which pushes insurers to raise rates further, a dynamic sometimes called a “premium death spiral” if it continues unchecked.
That 15% is a median of proposed changes, not your actual bill. You’ll see your real 2027 rates when you shop starting November 1.
Open Enrollment for 2027 Coverage
Mark your calendar:
- Open enrollment: November 1, 2026 – January 15, 2027
- Enroll by December 15, 2026 for coverage effective January 1, 2027
- Enroll between December 16, 2026 and January 15, 2027, and coverage generally starts February 1, 2027
- Some state-run exchanges set their own dates, so check yours if you don’t use HealthCare.gov. My 10 tips for choosing a plan can help once you start comparing
Outside these dates, you can only enroll if you qualify for a Special Enrollment Period — triggered by things like losing job-based coverage, marriage, having a baby, or moving.
Reconciling Your Subsidy at Tax Time
Whatever subsidy amount the marketplace estimates for you during enrollment is just that — an estimate, based on the income you project for the year. When you file your taxes, you’ll reconcile the subsidy you actually received against what you were actually eligible for, using IRS Form 8962.
If your income came in lower than projected, you may get an additional credit on your return. If it came in higher, you repay the full excess. The One Big Beautiful Bill (OBBBA) ended the old repayment caps for people under 400% FPL, so starting with 2026 coverage there’s no limit at any income.
Say Carlos, a freelancer, gets $400 a month in advance credits for 2026, or $4,800 for the year. A strong fourth quarter means he only qualified for $3,000, so $1,800 gets added to the tax he owes on the return he files in 2027. If his income crosses the 400% line, the whole $4,800 goes back. Freelancers should build that risk into their quarterly estimated taxes.
The cap’s removal is already law, so it applies to your 2026 return no matter what happens next. Treasury and the IRS have also proposed regulations that write the change into the rules, with comments due November 30, 2026, and a hearing set for December 8.
If your income is uncertain — freelance income, a possible year-end capital gain, a Roth conversion you’re considering — it’s worth updating your income estimate with the marketplace during the year rather than waiting to find out at tax time.
Looking Ahead: 2028
The enhanced subsidies stay expired unless Congress passes new legislation, so expect the same 400% cliff in 2028, with routine inflation changes to the dollar figures. One thing I’m watching: under the proposed regulations, for tax years after 2027, a month generally wouldn’t count toward the credit unless the exchange has verified your income, family size and other coverage.
I’ll update this page when those rules are final and as final 2027 premium rates are published.
