What the subsidy cliff is.
The premium tax credit lowers your monthly premium on a HealthCare.gov plan. From 2021 through 2025, temporary rules let households above 400% of the poverty level qualify too, with no one paying more than 8.5% of income for the benchmark silver plan. That extension expired on December 31, 2025. The House passed a three-year extension on January 8, 2026, but the Senate has not, and nothing has been enacted as of September 23, 2026.
Under the original law, which applies again, there is no credit at all above 400% of the poverty level. It does not phase down gently. At 399% you get the full credit your income and age produce; at 401% you get zero. That drop is the cliff.
Where the cliff sits for 2027 coverage.
| Household size | 400% of poverty level, per year | Per month |
|---|---|---|
| 1 person | $63,840 | $5,320 |
| 2 people | $86,560 | $7,213 |
| 3 people | $109,280 | $9,107 |
| 4 people | $132,000 | $11,000 |
| 5 people | $154,720 | $12,893 |
| 6 people | $177,440 | $14,787 |
For 2026 coverage, which you have now, the line is based on the 2025 guidelines: $62,600 for one person, $84,600 for two and $128,600 for four.
What the cliff costs: real numbers.
We ran households through the federal Marketplace API, the same engine HealthCare.gov uses, with 2026 plan prices. Each pair of rows is the same household with $1,000 more income.
| Household | Income | Travis County, TX credit | Oklahoma County, OK credit |
|---|---|---|---|
| Single, age 60 | $62,000 | $813 a month | $678 a month |
| Single, age 60 | $63,000 | $0 | $0 |
| Couple, 60 and 58 | $84,000 | $1,877 a month | $1,614 a month |
| Couple, 60 and 58 | $85,000 | $0 | $0 |
| Family of 4 (42, 40, 12, 9) | $128,000 | $959 a month | $793 a month |
| Family of 4 (42, 40, 12, 9) | $129,000 | $0 | $0 |
| Single, age 45 | $62,000 | $192 a month | $120 a month |
| Single, age 45 | $63,000 | $0 | $0 |
For the Travis County couple, $1,000 of extra income costs $22,524 a year in lost credit. The older you are, the bigger the drop, because premiums rise with age while the income line does not.
Want a licensed advisor to run your numbers?
Get my free optionsHow to stay under the line.
The income that counts is modified adjusted gross income (MAGI): your adjusted gross income plus any tax-exempt interest, untaxed foreign income and the untaxed part of Social Security. Anything that lowers AGI lowers MAGI. Common, legitimate levers:
- Pre-tax retirement contributions: a traditional 401(k), 403(b), 457 or SEP IRA, or a deductible traditional IRA.
- HSA contributions. Every bronze and catastrophic Marketplace plan is HSA-compatible from 2026, so a bronze plan plus a funded HSA is a two-part strategy.
- Self-employed deductions such as half of self-employment tax and the self-employed health insurance deduction.
- Timing of capital gains, Roth conversions and bonuses, where you have control over them.
- Choosing Roth withdrawals over traditional IRA withdrawals in early retirement, since qualified Roth distributions are not income for this test.
This is general information, not tax advice. If you are near the line, talk to a tax professional before year end, and tell us your plan so your HealthCare.gov estimate matches.
If you land just over the cliff.
Above 400% you pay full price, so plan choice carries the whole load. Compare the lowest cost bronze and silver plans in your county, check whether an off-Marketplace plan from the same insurer costs the same, and consider a bronze plan with an HSA. If you estimated under the line and end the year over it, you repay the entire credit at tax time, with no cap from 2026 on.
Questions people ask.
Did Congress extend the enhanced ACA subsidies?
Not as of September 23, 2026. The House passed a three-year extension in January 2026; the Senate has not. We check weekly through December 15 and will update this page the day anything changes.
Is the subsidy cliff based on this year's income or next year's?
Next year's. Your 2027 credit depends on your estimated 2027 household income, reconciled when you file your 2027 taxes.
Does Social Security count as income for the ACA?
Yes, for Marketplace purposes the untaxed part of Social Security is added back, so all of your Social Security benefits count toward MAGI.
Sources.
- IRS Rev. Proc. 2026-26, 2027 applicable percentage table. irs.gov
- H.R. 1 (Public Law 119-21), sections 71304, 71305 and 71307. congress.gov
- HHS ASPE, 2026 poverty guidelines. aspe.hhs.gov
- CMS Marketplace API (HealthCare.gov plan and eligibility data), queried September 23, 2026. developer.cms.gov
- HealthCare.gov, What's included as income. healthcare.gov
- IRS, The premium tax credit: the basics. irs.gov
General information for Texas and Oklahoma residents, not tax or legal advice. Rules and numbers can change; this page is reviewed on the date shown above. Your eligibility and prices are set by HealthCare.gov or the insurer when you apply.
Who wrote this.
RedHealth Advisors LLC is a licensed health insurance agency in Round Rock, Texas (Texas agency license 3449979, NPN 22110493), serving Texas and Oklahoma. Ryan Hutson is a licensed agent (NPN 21321807). Licensing details.