The 2026 Subsidy Cliff
The single biggest change to Marketplace prices in recent years did not come from insurers. It came from Congress letting a temporary boost expire. From 2021 through 2025, enhanced premium tax credits, created by the American Rescue Plan and extended by the Inflation Reduction Act, did two things: they capped what anyone paid for a benchmark plan at 8.5% of household income, and they removed the old income ceiling, so people earning more than 400% of the federal poverty level could still get help. That boost expired on December 31, 2025, and it has not been restored as of the writing of this guide.
What returned on January 1, 2026
The original Affordable Care Act rules came back. Premium tax credits are again limited to households between 100% and 400% of the federal poverty level. Above 400%, the credit drops to zero, not gradually, but all at once. That sudden drop is why it is called a cliff: one dollar over the line can cost a household thousands of dollars a year. The required contribution percentages also went back up, so even households that still qualify generally pay a larger share of income toward the benchmark plan than they did under the enhanced credits.
How big was the price rise in 2026?
Two things happened at once in 2026, and they should not be confused. First, the underlying price of coverage rose: benchmark Silver premiums rose by an average of 26% in 2026, about 30% in states using the federal HealthCare.gov platform and about 17% in states running their own marketplaces, according to KFF analysis of rate filings. Second, the subsidy fell at the same time, because the enhanced credits were gone. KFF analysis reported that subsidized enrollees who kept the same plan faced an average net premium increase of about 114%, roughly 1,016 dollars more a year, and that average monthly Marketplace premium payments after tax credits rose from about 113 dollars to about 178 dollars. Those are averages, not your price: your change depends on your age, your area, your plan, and your income.
Enrollment moved in the direction those numbers predict. The Department of Health and Human Services reported about 19.2 million people enrolled under the ACA in the first two months of 2026, down by about 3 million from the same period a year earlier, and the share of sign-ups receiving credits fell from about 92% in 2025 to about 87% in 2026. Averages hide the sharpest cases, which are households just over the cliff, where losing the whole credit at once can mean paying the full premium for the first time.
Who pays more now?
| Household | What changed |
|---|---|
| Under 100% of the poverty level | Generally Medicaid in expansion states, or the coverage gap in non-expansion states; no premium tax credit either way |
| 100% to 400% of the poverty level | Still qualifies, but pays a larger share of income than under the enhanced credits, and the benchmark itself is higher |
| Just over 400% of the poverty level | Loses the entire credit at once; the worst-affected group in percentage terms |
| Well over 400% of the poverty level | Pays the full premium, as before, but that full premium is now higher |
For 2026 coverage, 400% of the poverty level is about 62,600 dollars for a single person and about 128,600 dollars for a family of four. For 2027 coverage, the corresponding figures are reported at about 63,840 dollars for one person and about 132,000 dollars for a family of four. A household that was safely under the line in one year can cross it in the next through a raise, a bonus, a spouse returning to work, or a retirement withdrawal, so the cliff is something to check every year, not once.
What about 2027 coverage?
As of late 2026, the law for 2027 coverage is the same original law: the 400% cliff applies, and no extension has been enacted, although bills to extend the enhanced credits have passed one chamber and stalled in the other. Open enrollment for 2027 coverage on HealthCare.gov runs from November 1, 2026 through January 15, 2027, with enrollment by December 15, 2026 for coverage starting January 1. Insurers have proposed a median premium increase of about 15% for 2027, the second consecutive year of double-digit increases, and the federal out-of-pocket maximum for 2027 is set at 12,000 dollars for self-only coverage and 24,000 dollars for other coverage, up from 10,600 and 21,200 dollars in 2026. Proposed increases are not final prices, and your marketplace will show your actual price.
What can a household near the cliff do?
There is no trick that makes the cliff disappear, and anyone selling one should be treated with suspicion. What you can do is legitimate and boring: estimate your income carefully, understand which income counts, which is the subject of the MAGI guide, and consider the timing of income you control, such as a retirement withdrawal or a capital gain, with a tax professional, because the year in which income lands can matter as much as the amount. You can also compare a cheaper Bronze plan against a Silver plan with cost-sharing reductions, check whether a spouse's job-based plan is genuinely affordable under the current family rules, and, if you are over 65 or disabled, check whether Medicare, not the Marketplace, is your program. None of those steps changes the cliff. All of them stop it from surprising you.
Sources: KFF, ACA Marketplace premium and subsidy analyses for 2026 and 2027; Centers for Medicare & Medicaid Services, 2027 out-of-pocket limits and open enrollment dates; Center on Budget and Policy Priorities, open enrollment 2027 analysis; U.S. Department of Health and Human Services, 2026 enrollment data.