For four years, most people who bought a marketplace plan paid a fraction of the sticker price, and many paid nothing at all. That era ended on December 31, 2025, when the enhanced premium tax credits expired. Subsidies still exist for 2026 and 2027, but they follow the original Affordable Care Act rules again: a hard income cutoff, higher expected contributions and, for the first time, no cap on what you must repay if you guess your income wrong.
This guide explains who qualifies now, how the credit is calculated, what the federal poverty level table means for your household, how cost-sharing reductions work and how to avoid a nasty tax bill. Once you know what you qualify for, our rankings of the best health insurance companies of 2026 will help you pick a carrier that will still be in your county when coverage starts.
What changed when the enhanced credits expired
The premium tax credit is a federal subsidy that lowers the monthly premium of a plan bought through HealthCare.gov or a state exchange. From 2021 through 2025, temporary enhancements removed the upper income limit and cut the share of income enrollees were expected to pay. Those enhancements lapsed at the end of 2025. The Senate failed to advance a three-year extension in December 2025, and although the House passed its own three-year extension on January 8, 2026 by a vote of 230 to 196, no extension had become law as of this writing. Both the 2026 and 2027 marketplaces are operating under the original rules.
The effect on shoppers was immediate. According to KFF, the average premium paid by enrollees after subsidies rose from $113 a month in 2025 to $178 a month in 2026, a 58 percent jump, and the share of enrollees receiving any subsidy slipped from 92 percent to 87 percent. Underlying benchmark premiums rose about 26 percent at the same time.
Who qualifies in 2026 and 2027
Under the rules now in force, the IRS eligibility page lays out the core tests. To receive a premium tax credit you must:
- Have household income between 100 percent and 400 percent of the federal poverty level for your family size.
- Buy your plan through the marketplace. Off-exchange plans bought directly from an insurer carry the same protections but no premium tax credit or cost-sharing reductions.
- Not be eligible for other qualifying coverage such as Medicaid, Medicare or an affordable employer plan. For 2026, an employer’s self-only plan counts as affordable if it costs no more than 9.96 percent of household income. Since 2023, spouses and children can still qualify for a subsidy if the employer’s family coverage fails that test, even when the employee’s own coverage passes.
The 400 percent ceiling is the subsidy cliff. Earn one dollar over it and the entire credit disappears.
The federal poverty level table
Subsidy eligibility is measured against the poverty guidelines published by the Department of Health and Human Services, and the marketplace uses the guidelines in effect when open enrollment begins. That means 2026 coverage is measured against the 2025 guidelines, and the 2027 coverage you shop for this November is measured against the 2026 guidelines. The 2026 guideline for the 48 contiguous states and DC is $15,960 for one person plus $5,680 for each additional household member; Alaska and Hawaii run higher, at $19,950 and $18,360 for a single person.
| Household size | 100% FPL (subsidy floor) | 150% FPL (94% Silver ends) | 250% FPL (cost-sharing help ends) | 400% FPL (subsidy cliff) |
|---|---|---|---|---|
| 1 person | $15,960 | $23,940 | $39,900 | $63,840 |
| 2 people | $21,640 | $32,460 | $54,100 | $86,560 |
| 3 people | $27,320 | $40,980 | $68,300 | $109,280 |
| 4 people | $33,000 | $49,500 | $82,500 | $132,000 |
The table above uses the 2026 guidelines that apply to 2027 coverage. If you are reconciling a 2026 plan on your tax return, the 2025 guidelines apply instead: $15,650 for a single person and $32,150 for a family of four, which puts the 2026 cliff at $62,600 for one person and $128,600 for four. Income here means modified adjusted gross income for everyone in your tax household, projected for the year the coverage is in force, not last year’s return.
How the credit is calculated
The credit is built from two numbers. The first is the premium of the benchmark plan, the second-lowest-cost Silver plan available to you in your area. The second is your expected contribution, a percentage of household income set each year by the IRS. For 2026, Revenue Procedure 2025-25 sets the applicable percentage at 2.10 percent of income for households at or below 133 percent of the poverty level, rising on a sliding scale to 9.96 percent for households between 300 and 400 percent.
Your annual credit is simply the benchmark premium minus your expected contribution. You can spend that credit on any metal tier. Apply it to a cheaper Bronze plan and you might pay nothing per month; apply it to Gold and you cover the difference. The IRS updates the percentages annually, so check its guidance for the exact 2027 figures before you rely on any number here.
Worked example: a single person earning $50,000
Take a single adult with $50,000 of projected 2026 income. Against the 2025 guideline of $15,650, that is about 319 percent of the poverty level, inside the 300 to 400 percent band, so the expected contribution is 9.96 percent of income: $4,980 a year, or $415 a month. Suppose the benchmark Silver plan in this person’s county costs $600 a month, which we are using only as an illustration since real benchmark premiums vary widely by county and age. The credit would be $600 minus $415, or $185 a month, worth $2,220 over the year.
Now see what the cliff does. At $62,600 of income, the same person is at exactly 400 percent and still qualifies, paying 9.96 percent or about $520 a month toward that $600 benchmark, for a credit of roughly $80. At $62,601 the credit is zero and the full $600 is due. If you are anywhere near the line, a deductible retirement or HSA contribution that lowers your modified adjusted gross income can be worth many times its size, a strategy we cover in our guide to health insurance for the self-employed.
Cost-sharing reductions: the second subsidy
The premium tax credit lowers your monthly bill. A separate subsidy, the cost-sharing reduction, lowers your deductible, copays and out-of-pocket maximum, and it is available only if you enroll in a Silver plan. HealthCare.gov explains the three levels: at 100 to 150 percent of the poverty level a Silver plan pays about 94 percent of covered costs, at 150 to 200 percent it pays 87 percent, and at 200 to 250 percent it pays 73 percent. A standard Silver plan pays 70 percent and a Gold plan 80 percent, so the two lower income bands get better-than-Gold coverage for a Silver premium.
This is the subsidy people most often leave on the table. Only 37 percent of 2026 enrollees chose a cost-sharing reduction plan, and the share of shoppers picking Silver fell from 57 percent to 43 percent as many chased the lowest premium. One caution: a marketplace auto-renewal can no longer move you from Bronze into a cost-sharing Silver plan, so you must make the switch yourself. Second, the reductions depend on your income estimate, so keep it current. Our explainer on metal tiers shows the full-year math for Bronze versus reduced-cost Silver.
Advance credits and the end of repayment caps
Most people take the credit in advance, paid straight to the insurer each month based on projected income. The catch is reconciliation. After the year ends, you receive Form 1095-A from the marketplace and must file Form 8962 with your federal return to compare the advance payments with the credit you actually earned. HealthCare.gov is blunt about the consequences: if you received advance payments and do not file and reconcile, you can lose advance credits in future years.
The bigger change is what happens when you underestimate income. Through tax year 2025, the amount you had to repay was capped for households under 400 percent of the poverty level, at $375 to $1,625 for single filers and $750 to $3,250 for everyone else depending on income. The One Big Beautiful Bill Act eliminated those caps for tax years beginning in 2026. From the 2026 tax year on, if the advance payments exceed the credit you were entitled to, you repay every dollar of the excess, and crossing the 400 percent line means repaying the entire year’s subsidy.
Three habits protect you:
- Estimate conservatively. If your income is variable, project the high end rather than the low end. Any credit you did not take in advance comes back to you as a refund when you file.
- Report changes within the year. A raise, a new job or a change in household size should go into your marketplace account promptly so the advance credit adjusts mid-year.
- Keep Form 1095-A and file on time. It typically arrives by mid-February. Our guide to health insurance and taxes walks through the forms line by line.
Rules that trip up shoppers this year
Other changes affecting subsidized enrollment:
- No more year-round low-income enrollment. The special enrollment period that let people under 150 percent of the poverty level sign up at any time was suspended on August 25, 2025. Outside open enrollment you now need a qualifying life event.
- DACA recipients lost marketplace eligibility under the same 2025 rule.
- Automatic re-enrollment with subsidies ends for most people starting with plan year 2028. Under the One Big Beautiful Bill Act you will need to actively verify income, household and immigration status each year to keep advance credits.
- Carrier exits. Cigna is leaving the individual ACA market in all 11 of its states after 2026, Molina is shrinking from 14 states to 6, and Aetna already left for 2026. Your subsidy travels with you, but your plan may not, so compare fresh.
- Deadlines. Open enrollment for 2027 coverage on HealthCare.gov runs from November 1, 2026 to January 15, 2027. Enroll by December 15 for coverage starting January 1; later enrollments start February 1. State exchanges set their own dates, some ending earlier and some later, so check your state.
How to claim your subsidy
- Gather income documents for everyone in your tax household and project next year’s modified adjusted gross income.
- Apply through HealthCare.gov or your state exchange, or through an approved enrollment platform or broker. The application also screens for Medicaid and CHIP, which enroll year-round.
- Review the credit the marketplace offers and decide how much to take in advance.
- If your income is under 250 percent of the poverty level, filter to Silver plans and confirm the plan shows the cost-sharing reduction.
- Compare total yearly cost across plans, check the provider directory and drug list, and enroll before your deadline. Our list of common health insurance mistakes covers the errors that cost people the most at this step.
Bottom line
Subsidies did not vanish in 2026, but they got smaller and less forgiving. You need income between 100 and 400 percent of the poverty level, you will pay between 2.10 and 9.96 percent of that income toward the benchmark Silver plan, and you will repay every dollar of excess advance credit if your estimate runs low. If you are under 250 percent, a Silver plan with cost-sharing reductions remains the best deal on the exchange, and the cliff at 400 percent is worth planning around with every legal deduction you have.
Once you know your credit, the remaining question is which insurer to spend it with. Our reviews of the best health insurance companies of 2026 compare networks, satisfaction scores and which carriers are staying for 2027.