What Are ACA Subsidies
ACA subsidies are federal tax credits that lower the monthly premium for a health plan bought on HealthCare.gov or a state marketplace. The main one, the premium tax credit, caps what a household pays for a benchmark silver plan at a share of its income. Most people take it in advance, so the government pays part of the premium to the insurer each month. In 2026, 87% of people who signed up got the credit, by KFF’s reading of CMS’s enrollment report (KFF).
Key facts
- The larger credits in place since 2021 expired at the end of 2025 (KFF).
- Average monthly premium payments rose 58%, from $113 to $178, in 2026 (KFF).
- No credit goes to one person earning over $62,600 in 2026 or over $63,840 in 2027 (HHS).
- The House passed a three-year extension 230-196 on January 8. The Senate has not voted (govinfo).
- Open enrollment for 2027 coverage runs November 1, 2026 to January 15, 2027 on HealthCare.gov (CMS).
What to Do Before Open Enrollment
Open enrollment for 2027 starts November 1, and the plan that worked last year may not be the cheapest now. Our open enrollment guide has every deadline, including states with their own marketplaces. In 2026, the share of enrollees in bronze plans, which have much higher deductibles, rose from 30% to 40% (KFF). Start with the situation closest to yours.
Find your situation
Open the one closest to yours. Each gives the current rule, its status, and a next step.
I am shopping for 2027 coverage
- On HealthCare.gov, open enrollment runs November 1, 2026 to January 15, 2027. Pick a plan by December 15 for coverage that starts January 1. Some state marketplaces set later deadlines.
- Compare the net premium after the credit, then the deductible. A cheaper bronze plan can cost far more if you need care.
- Update your 2027 income estimate before you choose. The credit is based on it, and an old estimate can mean a bill at tax time.
- Get free, unbiased help from a navigator through localhelp.healthcare.gov.
Status: dates confirmed by CMS on July 31, 2026. A federal court threw out a rule that would have ended enrollment on December 15, and the government has appealed.
My income is just above 400% of the poverty line
- Find your line. For 2027 coverage it is 400% of the 2026 poverty guidelines: $63,840 for one person, $86,560 for two, and $132,000 for four, higher in Alaska and Hawaii. For 2026 coverage it was $62,600, $84,600 and $128,600.
- Pre-tax 401(k) contributions, deductible IRA contributions, and HSA contributions lower the income the marketplace counts. A small change can put you back under the line.
- Check whether your state adds its own help. In 2026, New Mexico capped a benchmark plan at 8.5% of income for people above the line.
Status: law. Since January 1, 2026, no federal credit is available above 400% of the poverty line.
My income dropped or I lost my job
- Report the change to the marketplace. A lower income can raise your credit right away.
- Losing job-based coverage opens a 60-day special enrollment period, so you do not have to wait for November.
- If your income falls below 138% of the poverty line and your state expanded Medicaid, you may qualify for Medicaid instead. See the Medicaid explainer for the new rules.
Status: law. Mid-year changes are allowed under the ACA.
I got a credit in 2026 and my income went up
- Report the higher income to the marketplace now. That shrinks the advance credit for the rest of the year.
- Set money aside for tax time. For 2026 coverage, there is no limit on how much of an overpaid credit you may have to repay.
- Keep the Form 1095-A the marketplace sends you. You need it to file.
Status: law. The 2025 budget law removed the repayment caps starting with 2026 coverage, so the bill arrives with returns filed in 2027.
I have a temporary immigration status
- Starting January 1, 2027, most temporary immigration statuses no longer qualify for the credit.
- Ask a navigator which statuses still qualify and what coverage is left for your family. Children may qualify for different programs.
- Keep coverage through 2026 if you have it. The change applies to 2027 plans.
Status: law. The 2025 budget law narrowed which lawfully present immigrants can get the credit.
General information, not tax or legal advice. Sources: CMS; HHS 2026 poverty guidelines; P.L. 119-21, secs. 71301 and 71305; KFF; healthinsurance.org.
How the Premium Tax Credit Works
The credit fills the gap between a benchmark plan’s price and what the law says you can afford. The benchmark is the second-lowest-cost silver plan where you live. The law sets your expected contribution as a percentage of household income, and the credit pays the rest.
You can spend the credit on any metal level. If you pick a cheaper plan than the benchmark, you pay less. If you pick a pricier one, you pay the difference.
The percentages are the part Congress changed. From 2021 through 2025, the American Rescue Plan and then the Inflation Reduction Act lowered them at every income and removed the 400% ceiling. When those laws lapsed, the original schedule came back, adjusted each year by the IRS. The IRS set the 2027 percentages in July 2026 (Rev. Proc. 2026-26).
What a household must pay toward a benchmark plan, as a share of income
A second subsidy, the cost-sharing reduction, lowers deductibles and copays for people from 100% to 250% of the poverty line. It only comes with a silver plan. In 2026, the average silver deductible for people up to 150% of the poverty line was $80, compared with $5,304 for a standard silver plan, according to KFF.
What You Pay in 2026, by Household
The expiration raised costs at every income, and the steepest jump hit older people just above the cliff. The chart applies each schedule to the same 2026 premium, so the gap is the lost credit alone.
| Group | With 2021-2025 credits | 2026 rules | Change |
|---|---|---|---|
| Single, 40, $23,475 (150% of poverty) | $0 | $82 | +$82 |
| Single, 40, $39,125 (250% of poverty) | $130 | $275 | +$145 |
| Single, 60, $46,950 (300% of poverty) | $235 | $390 | +$155 |
| Couple, both 60, $85,658 (405% of poverty) | $607 | $2,655 | +$2,048 |
Resist Now calculation. Inputs: KFF's 2026 national average benchmark premium for a 40-year-old ($625 a month), CMS's default age curve, the 2025 federal poverty guidelines used for 2026 coverage, and each schedule's contribution percentage. Actual premiums vary by county.
At 150% of the poverty line, a 40-year-old who paid nothing now pays about $82 a month, the same figure KFF published. At 250%, the payment more than doubles. For the couple at 405%, it more than quadruples, because the credit disappears.
Earning $1,058 more costs that couple $23,428 a year. The receipt shows the cliff for one household.
Under the 2021-2025 rules, the same couple would have paid about $7,281 for the year, 8.5% of their income. In 2026 the plan takes 37% of it.
What Happened When the Enhanced Credits Expired
Fewer people signed up, those who stayed paid more, and many traded a lower premium for a much higher deductible. Sign-ups fell by more than a million to 23.1 million in 2026, the sharpest one-year drop since the marketplaces opened in 2014 (KFF).
The people who left were not spread evenly. Enrollees earning just over the cliff made up a sliver of the market and a large share of the losses.
Sign-ups count people who picked a plan. Fewer paid. Based on January payment data from Wakely Consulting Group, KFF estimates that paid enrollment could average about 17.5 million in 2026, down from 22.3 million in 2025.
Paid enrollment more than doubled from 2020 to 2025 and is now falling back.
| Category | Value |
|---|---|
| 2020 | 10.4 |
| 2021 | 11.7 |
| 2022 | 13.5 |
| 2023 | 16.2 |
| 2024 | 21 |
| 2025 | 22.3 |
| 2026 (est.) | 17.5 |
Source: KFF analysis of CMS effectuated enrollment reports and Wakely Consulting Group estimates, May 19, 2026. Full-year averages through 2024; 2025 averages the first seven months. The 2026 value is the midpoint of a 16.5 to 18.5 million range.
People who stayed often bought down. The share choosing bronze plans rose from 30% to 40%, and the average deductible jumped by $1,027 to a record $3,786 (KFF). A lower premium on a bronze plan can mean thousands of dollars out of pocket before coverage starts.
Small employers feel it too. In a sworn declaration quoted in the court’s July 16, 2026 opinion, a Wisconsin small-business owner whose family has a bronze marketplace plan said the “price hikes” made it “even more improbable” that he and his wife could afford to sponsor their employees’ health insurance (opinion, p. 15).
2027 Premiums Are Rising Again
Sticker prices are set to climb a second year in a row. Insurers asked for a median increase of 15% for 2027 in filings from 276 companies across every state and D.C., according to KFF’s review, updated August 3, 2026. The finalized median for 2026 was 20%. In the detailed filings KFF read, insurers cite higher costs for health services, inflation and labor shortages, plus the end of the enhanced credits and a sicker risk pool.
For people who qualify, the credit caps what they pay for a benchmark plan as a share of income, so it absorbs most of a benchmark price increase. People above the cliff get no credit and pay the full increase.
How the Extension Fight Played Out
The credits expired after the longest shutdown of the whole government on record and two failed Senate votes. The shutdown ran from October 1 to November 12, 2025. On December 11, 2025, two health bills each fell short of the 60 votes needed to advance, 51 to 48. One was S. 3385, a three-year extension of the credits (roll call 644). The other was S. 3386, a Republican plan for health savings account deposits (roll call 643). After the credits lapsed at the end of 2025, House Democratic leader Hakeem Jeffries used a discharge petition to bring a rule for a vote on January 7, 2026 (H. Res. 780). The next day H.R. 1834 passed 230 to 196, with 17 Republicans joining 213 Democrats (roll call 11).
- ACA signed Creates the premium tax credit for incomes from 100% to 400% of the poverty line.
- American Rescue Plan Lowers every contribution percentage and removes the 400% ceiling for 2021 and 2022.
- Inflation Reduction Act Extends the larger credits through 2025.
- Shutdown ends The shutdown that began October 1 ends without an extension.
- Senate votes fail S. 3385 and a Republican alternative each fall short of 60 votes, 51 to 48.
- Credits expire The 400% cliff returns and contribution percentages rise.
- House passes H.R. 1834 A three-year extension passes 230 to 196 and goes to the Senate.
Sources: govinfo bill status for H.R. 1834, H. Res. 780 and S. 3385; Senate roll calls 643 and 644 (2025); House Clerk roll call 11 (2026); P.L. 119-37.
The ACA Premium Tax Credit, 2010 to 2026: Mar 2010: ACA signed (Creates the premium tax credit for incomes from 100% to 400% of the poverty line.). Mar 2021: American Rescue Plan (Lowers every contribution percentage and removes the 400% ceiling for 2021 and 2022.). Aug 2022: Inflation Reduction Act (Extends the larger credits through 2025.). Nov 12, 2025: Shutdown ends (The shutdown that began October 1 ends without an extension.). Dec 11, 2025: Senate votes fail (S. 3385 and a Republican alternative each fall short of 60 votes, 51 to 48.). Jan 1, 2026: Credits expire (The 400% cliff returns and contribution percentages rise.). Jan 8, 2026: House passes H.R. 1834 (A three-year extension passes 230 to 196 and goes to the Senate.).
A bipartisan Senate group worked on a two-year extension with an income cap at 700% of the poverty line and a minimum premium of $5 a month. On January 15, Sen. Bernie Moreno said the talks had stalled (CBS News). H.R. 1834 has sat on the Senate calendar since February 10, with no vote (govinfo). No law enacted in 2026 has extended or changed the credit.
Where Every Piece Stands Now
Congress has not voted on the credits since January, but courts have kept several new marketplace rules from taking effect. Two rulings by Judge Brendan Hurson in Maryland, in June and July 2026, blocked rules that would have shortened enrollment, raised bronze out-of-pocket limits, and added income checks.
Where Each Part of the Marketplace Fight Stands
As of October 14, 2026
- Enhanced premium tax credits Ended
Expired January 1, 2026.
- Insurers' 2027 premium requests Proposal, median 15% increase
Proposed in filings from 276 insurers, reviewed by KFF on August 3, 2026. Final rates show up on HealthCare.gov when shopping opens November 1. (source)
- H.R. 1834, extension through 2028 Proposal, passed House
Passed the House 230 to 196 on January 8, 2026. On the Senate calendar since February 10, with no vote. (source)
- Bipartisan two-year Senate compromise Proposal, stalled
Sen. Bernie Moreno said the talks had stalled on January 15, 2026. (source)
- 2025 marketplace integrity rule, including enrollment ending December 15 Blocked by a court, on appeal
A federal court vacated eight provisions on June 12, 2026, including the shorter enrollment window and new income checks. HHS appealed July 16 (4th Cir. 26-1938); healthinsurance.org reports argument set for late October. CMS says 2027 enrollment runs to January 15. (source)
- 2027 rule: higher bronze limits and income checks Blocked by a court
Stayed on July 16, 2026 while the case goes on. CMS lists 10 provisions that will not take effect. (source)
- Cap on repaying an overpaid credit Ended
Removed by the 2025 budget law starting with 2026 coverage (sec. 71305). (source)
- Credits for most temporary immigration statuses Law, ends 2027
End January 1, 2027 under the 2025 budget law (sec. 71301). (source)
Source: govinfo bill status; CBS News; CMS; U.S. District Court for the District of Maryland; healthinsurance.org; KFF
The Debate Over Cost and Fraud
Opponents of the enhanced credits point to cost and to improper enrollment. The Congressional Budget Office estimated in September 2025 that making them permanent would add $350 billion to deficits from 2026 to 2035 (CBO). H.R. 1834’s three-year version would add about $80.6 billion (CBO).
Paragon Health Institute, a conservative research group, argues that $0 premium plans invited brokers and enrollees to misstate income. In a June 2, 2026 report, it estimated that about 6.2 million sign-ups in 2026 were improper and that taxpayers could fund up to $25 billion in improper payments this year (Paragon). It also reports that 35% of enrollees had no medical claims in 2024.
Supporters point to coverage. In June 2025, CBO projected that letting the credits expire would leave 4.2 million more people uninsured in 2034 (CBO). It also estimates H.R. 1834 would lower benchmark premiums by 9.0% in 2028, because the people who enroll would be healthier on average (CBO).
In July 2026, U.S. District Judge Brendan Hurson reviewed HHS’s own evidence for new income checks. He wrote that its thrust “appears to be that agents and brokers produce errors,” while the rule targets “the behavior of low-income individuals,” so the agency’s “chosen solution remains unmoored from the problem it seeks to address” (opinion, pp. 34 to 36). Paragon’s estimate compares enrollment with Census population figures, and the court did not rule on it.
What Would Bring Premiums Down
Only Congress can restore the federal credits, but states have shown what partial relief looks like. H.R. 1834 would restore the 2021-2025 schedule through 2028. In its January 8, 2026 estimate, CBO projected it would cover 4.0 million more people in 2028 (CBO).
A few states used their own money in 2026. New Mexico replaced the lost federal credits in full and capped benchmark premiums at 8.5% of income above the cliff. Maryland fully replaced them below 200% of the poverty line, California below 150%, and Colorado paid up to $80 a month for one enrollee plus $29 for each added family member (KFF). New Mexico’s sign-ups rose 18% while sign-ups fell in 41 states (KFF).
Extending the federal credits would cost about $35 billion a year, by the CBO figure KFF cites. KFF concludes that state action “can mitigate, but not replace,” federal policy. State reinsurance programs, which pay part of the most expensive claims, have cut unsubsidized premiums by roughly 20%, Colorado and New Jersey say (KFF).
What National Averages Hide
Averages hide real differences by place, age, and family. Keep these limits in mind when you read the household figures:
- Premiums vary by county. The household figures use the national average benchmark. In 2026 the state average for a 40-year-old ranged from $401 in New Hampshire to $1,299 in Vermont (KFF).
- Job-based coverage usually blocks the credit. If the employer’s cheapest self-only plan costs you no more than 9.96% of household income in 2026, or 10.22% in 2027, you generally cannot get the credit (IRS).
- A lower premium is not a lower cost. Bronze plans cut the monthly bill and raise the deductible. For someone who needs regular care, the silver plan with cost-sharing help can cost less over a year.
- Some people are covered elsewhere. Below 138% of the poverty line in a state that expanded Medicaid, most adults get Medicaid, not a marketplace credit.
- Sign-ups overstate coverage. A plan picked in December is coverage only once the first premium is paid.
Will ACA subsidies continue in 2027?
The regular premium tax credit continues, with 2027 percentages the IRS set in Rev. Proc. 2026-26. The larger 2021-2025 credits do not, unless Congress passes a law such as H.R. 1834. As of October 14, 2026, the Senate has not voted on it.
What is the income limit for ACA subsidies?
For 2027 coverage, 400% of the 2026 poverty guidelines: $63,840 for one person, $86,560 for two, and $132,000 for a family of four (higher in Alaska and Hawaii). For 2026 coverage it was $62,600, $84,600 and $128,600. Below 100%, people generally cannot get the credit, and in states that expanded Medicaid they qualify for Medicaid instead.
What is the subsidy cliff?
It is the point where the credit stops completely. Before 2021 and again since 2026, a household earning one dollar above 400% of the poverty line gets nothing, however high its premium.
Do I have to pay back an ACA subsidy?
If your final income is higher than your estimate, you repay the difference when you file taxes. Starting with 2026 coverage, there is no cap on that repayment.
Can I get a subsidy if my job offers insurance?
Usually not. If the cheapest employee-only plan costs you no more than 9.96% of household income in 2026, or 10.22% in 2027, you are not eligible for the credit.
What You Can Do
- Shop again this fall, even if you like your plan. Open enrollment for 2027 runs November 1 to January 15 on HealthCare.gov. Compare net premiums and deductibles, and pick by December 15 for a January 1 start. To estimate your credit before shopping opens, KFF’s subsidy calculator takes your ZIP code, ages and income.
- Get free help before you choose. Certified navigators do not earn commissions. Find one at localhelp.healthcare.gov.
- Report income changes as they happen. It is the only way to avoid a large repayment at tax time now that the caps are gone.
- Ask your state lawmakers about state help. New Mexico, Maryland, California, Colorado, and Washington used state money to soften the 2026 increases. Your legislature can do the same.
- Ask your senators to pass H.R. 1834. It passed the House in January and has waited on the Senate calendar since February. Use the letter and call script below.