If you buy your health insurance through the marketplace, you probably already felt this: your 2026 premium landed higher than 2025, in some cases a lot higher. I spent years working in insurance, and the questions I’ve been getting all come down to two things — why did it jump, and do I still get help paying for it? Those are separate questions with separate answers, and the second one is where the real money is.
The short version is that a temporary boost to the ACA’s subsidies expired at the end of 2025, and an old rule — the one that cuts your subsidy to zero the moment your income crosses a line — came back. Whether that line caught you or not decides whether your premium went up by a manageable amount or by hundreds of dollars a month. Open enrollment for 2027 coverage runs from November 1, so this is the window where what you do actually changes your bill.
One thing up front: I’m an insurance writer, not your broker or tax preparer, and this is general information, not personalized advice. KnowWiser doesn’t earn a commission on anything below — there are no affiliate links in this article. The numbers here come from the IRS, KFF and federal poverty guidelines, and I’ve dated the page so you can see how current it is. Your own subsidy depends on your income, household and ZIP code, which I can’t see, so treat the worked example as arithmetic and get your real figure from HealthCare.gov or your state exchange.
Why did your 2026 ACA premium jump?
Two forces hit at the same time: the enhanced premium tax credits expired, and insurers raised their prices. The credit that used to cover part of your premium shrank, while the sticker price it applied to went up.
From 2021 through 2025, the American Rescue Plan and then the Inflation Reduction Act made the ACA’s premium tax credits more generous and removed the income ceiling on them. Those enhancements expired at the end of 2025, and as of publication Congress had not extended them. That alone is the bigger driver for most people. On top of it, insurers filed 2026 rate increases with a median of about 18%, according to KFF’s review of marketplace filings.
Put together, the effect on what enrollees actually pay is steep. KFF estimated that if a subsidized enrollee kept the exact same plan, their premium payment would have more than doubled — a 114% jump on average, from about $888 to $1,904 a year. What actually happened once people re-shopped was smaller but still large: the average subsidized enrollee’s monthly payment rose about 58%, from roughly $113 to $178 a month. Deductibles climbed too, up an average 37% to $3,786 per person — which KFF called the steepest single-year deductible increase this market has seen.
Do you still get a subsidy in 2026?
Yes — if your household MAGI is between 100% and 400% of the federal poverty level. No — if it’s over 400%. The subsidy didn’t vanish for everyone; it vanished for people above the income cliff, and shrank for people below it.
Here’s the line that matters, using the 2025 federal poverty guidelines (the ones that apply to 2026 coverage; the thresholds tick up a little each year):
| Household size | 100% FPL | 400% FPL (subsidy cutoff) |
|---|---|---|
| 1 | $15,650 | $62,600 |
| 2 | $21,150 | $84,600 |
| 3 | $26,650 | $106,600 |
| 4 | $32,150 | $128,600 |
If your projected MAGI for the year lands inside that range and you meet the other rules (you’re not eligible for affordable employer coverage or Medicaid, you file taxes, and so on), you still get a premium tax credit. It’s just calculated the old, less generous way. If your MAGI is over the 400% figure for your household size, you get zero — and you pay the full premium. That’s the cliff, and it’s the single most important number to check for yourself before you pick a plan.
What is the 400% subsidy cliff, and did it really come back?
The cliff is the point where your subsidy drops to zero all at once instead of tapering off. Yes, it returned for 2026. Under the expired enhancements, there was no cliff — anyone, at any income, paid no more than 8.5% of their income for the benchmark plan. That cap is gone.
Now the math works the old way. Below 400% FPL, the government caps what you pay for the benchmark plan (the second-lowest-cost silver plan in your area) at a sliding share of your income. For 2026 that share tops out at 9.96% for people in the 300–400% band, per the IRS applicable-percentage table in Revenue Procedure 2025-25. Your premium tax credit is the difference between the benchmark premium and that capped amount. Cross 400%, and there is no cap — the credit is zero and you owe the whole premium.
The cruel part is how sharp the edge is. Because the credit falls off a cliff rather than fading out, a tiny amount of extra income can cost you thousands. Let me show you exactly how.
Worked example: how $1,000 of income can cost you thousands
This is arithmetic, not a real client. Take two 60-year-olds, each a single-person household, living in the same area and eyeing the same benchmark silver plan. Say that benchmark plan costs $1,150 a month, or $13,800 a year — an illustrative figure, because real benchmark premiums swing widely by age and ZIP code, and a 60-year-old’s rate is near the top of the age scale. Get your own number from HealthCare.gov; use this one only to see the mechanism.
For a single person, 400% of the poverty level is $62,600.
- Person A projects MAGI of $62,000 — about 396% of poverty, just under the line. Their payment for the benchmark is capped at 9.96% of income: 9.96% × $62,000 = $6,175 a year, about $515 a month. The premium tax credit covers the rest: $13,800 − $6,175 = $7,625 a year.
- Person B projects MAGI of $63,000 — about 403% of poverty, just over the line. Their cap is gone. Credit: $0. They pay the full $13,800 a year, $1,150 a month.
Same age, same plan, same town. The only difference is $1,000 of income — and it costs Person B about $7,625 a year. That’s the cliff: one extra dollar of income near 400% FPL can be the most expensive dollar you earn all year.
Did your subsidy survive? A quick decision framework
If you’re near that 400% line, the good news is you often have more control than you think — legally, before you enroll. Here’s the order I’d work through it.
- Pin down your projected MAGI for the coverage year. Not last year’s — your best estimate for the year the plan covers. (How to build that number is the next section.)
- Find your household’s 400% figure from the table above and see which side you’re on. If you’re comfortably under, you keep a credit; if you’re over, you’re paying full freight unless you can change the number.
- If you’re just over the line, look at legal ways to lower MAGI. Deductible contributions to a traditional IRA, an HSA (if you’re in an HSA-eligible plan), or a pre-tax 401(k) all reduce the AGI that MAGI is built on. In the example above, if Person B put $1,000 into a traditional IRA or HSA, their MAGI drops to $62,000 — back under the cliff — and restores roughly $7,625 of credit. A $1,000 deductible contribution buying back $7,625 is one of the highest-return moves in personal finance, and it exists only because the cliff is so steep.
- Compare metal tiers, don’t just accept the renewal. If you’ve lost the subsidy, the benchmark silver plan is no longer “protected” for you, so the cheapest bronze or an HSA-eligible high-deductible plan may cut the hit hard. If your income is under 250% FPL, silver plans still carry cost-sharing reductions that make them the better buy. Switching tiers is often where you cap the increase.
- Mind the reconciliation risk. Your credit is trued-up on Form 8962 at tax time. Estimate too low and you repay the excess — and above 400% FPL there is no cap on that repayment. If your income is genuinely uncertain, it can be safer to claim less credit up front than to owe it all back.
How do you calculate your MAGI for ACA subsidies?
Take your adjusted gross income and add back tax-exempt interest, the untaxed portion of Social Security benefits, and any excluded foreign earned income. For most households MAGI sits very close to AGI.
The reason it matters so much here is that this one number decides which side of the cliff you land on. A year-end bonus, a Roth conversion, capital gains from selling a fund, or unemployment income can all push MAGI up without you thinking of it as “marketplace income.” If you’re near 400%, run the estimate carefully and revisit it if your income changes mid-year — you can update your marketplace application, and doing so adjusts your credit going forward instead of leaving a surprise at tax time. If you also do year-end tax moves, it’s worth reading how a Roth conversion raises the income your subsidy is measured against before you pull the trigger on one.
What should you do during open enrollment?
Actively re-shop — don’t auto-renew — and check your subsidy against your projected income before you pick a plan. Open enrollment for 2027 coverage runs November 1, 2026 through January 15, 2027 in most states, confirmed by CMS in August 2026. To start coverage January 1, choose a plan by December 15, 2026; enroll December 16 through January 15 and coverage begins February 1.
A short checklist for this year in particular:
- Update your income estimate on the application so your credit is calculated on a realistic number.
- Re-run the benchmark. The second-lowest silver plan — the one your credit is based on — can change from year to year, which quietly changes your credit even if your own plan didn’t move.
- Price at least one tier down. If you kept a subsidy, compare your plan to the new benchmark; if you lost it, bronze and HSA-eligible plans deserve a hard look.
- Check whether a MAGI-lowering contribution puts you back under 400% if you’re close. This is the highest-leverage decision on the list.
- Watch the December 15 deadline if you need coverage from day one of the year.
If you’re weighing coverage at all, it’s worth stepping back to the basics of how to choose a health plan and what skipping it really costs, and if an old hospital bill is already hanging over you, here’s how medical debt does and doesn’t hit your credit under the 2026 rules.
Model the new premium against your take-home
A subsidy number on a screen doesn’t tell you whether the premium actually fits your month. Before you lock in a plan, run the new premium against what you actually bring home: our budget calculator sorts your take-home pay into a 50/30/20 plan, so you can see whether a $515 premium slots into “needs” comfortably or a $1,150 one blows the whole category. If it doesn’t fit, that’s your signal to price a lower tier — or to check whether a deductible contribution can pull you back under the cliff — before open enrollment closes, not after your first bill.
Sources
- KFF — What We Know So Far About 2026 ACA Marketplace Enrollment, Premiums, and Deductibles (actual average payment +58% to $178/mo; deductibles +37% to $3,786; 400% cliff returned for 2026)
- KFF — ACA Marketplace Premium Payments Would More than Double if Enhanced Premium Tax Credits Expire (114% “same plan” projection, $888 → $1,904; median insurer rate increase ~18%)
- IRS — Revenue Procedure 2025-25 (2026 applicable percentage table; 9.96% at 300–400% FPL; required contribution percentage 9.96%)
- HHS / ASPE — 2025 Poverty Guidelines (federal poverty levels used for 2026 marketplace coverage)
- HealthCare.gov — How to apply and enroll / open enrollment (open enrollment November 1, 2026 – January 15, 2027; December 15 deadline for January 1 coverage)
- Congressional Research Service — Enhanced Premium Tax Credit and 2026 Exchange Premiums: FAQ (R48290) (enhanced credit expiration, 8.5% cap removal, cliff mechanics)
Verified as of 2026-09-26 against KFF, irs.gov and HHS: the expiration of the enhanced premium tax credits at the end of 2025, the return of the 400% FPL subsidy cliff for 2026, the 9.96% applicable-percentage cap for the 300–400% band (Rev. Proc. 2025-25), the 2025 federal poverty guidelines that apply to 2026 coverage, and the November 1, 2026 – January 15, 2027 open enrollment window (CMS). The benchmark premium in the worked example ($1,150/month) is an illustrative figure, not a quoted rate — actual premiums vary by age, plan and ZIP code, so confirm yours on HealthCare.gov. Rules and figures change; check current terms before you enroll.