ACA Subsidy Cliff Calculator
The enhanced ACA premium tax credits expired December 31, 2025, and the 400% poverty-level cliff is back. Enter your income and household size to estimate your monthly premium under current rules vs. the old enhanced credits — and what to do before December 15.
Default $741/month is illustrative: the 2026 national average monthly premium before subsidies reported by CMS. Replace it with your area's benchmark Silver premium for a personal estimate.
| Item | Current rules (original ACA) | Old enhanced credits (2021–2025, for comparison) |
|---|---|---|
| Your income as % of poverty level | 250.6% FPL ($40,000 vs. $15,960 for a household of 1) | |
| Required contribution (% of income) | 8.46% | 4.03% |
| Premium tax credit | $5,508/yr | $7,282/yr |
| You pay (benchmark plan) | $281.97/mo | $134.17/mo |
| Benchmark premium you entered | $741.00/mo ($8,892/yr) | |
The 400% FPL cliff for a household of 1 is $63,840. Staying under it preserves a credit; going over it removes the whole credit at once — not gradually.
Estimates only, not tax or insurance advice. Your actual Marketplace premium depends on your area's second-lowest-cost Silver plan, your exact MAGI, age, and plan choice — use HealthCare.gov for a binding quote.
Get new paycheck calculators first
One short email when we launch a new calculator or publish a paycheck guide. Once or twice a month, no spam.
By subscribing you agree to receive emails from GrossWise. Unsubscribe anytime. See our Privacy Policy.
What changed, in one paragraph
The enhanced premium tax credits — the extra help that capped benchmark premiums at 8.5% of income and let people above 400% of the poverty level get subsidies — expired December 31, 2025 (KFF). For coverage since then, the original ACA rules are back: credits only between 100% and 400% of the federal poverty level (FPL), required contributions of 2.10% to 9.96% of income (IRS Revenue Procedure 2025-25), and no credit at all above 400% FPL. KFF's later analysis of actual 2026 results found enrollees' premium payments rose 58% on average after the expiration (KFF, Peterson-KFF Health System Tracker). Before the expiration, KFF had estimated the jump for subsidized enrollees at 114% — from an average of $888/year in 2025 to $1,904/year in 2026 (KFF, September 2025 estimate).
How the math works
Your premium tax credit is simple arithmetic once you know three numbers:
| Step | What it is | Source |
|---|---|---|
| 1. Your income as % of FPL | Annual household income ÷ the poverty guideline for your household size | HHS poverty guidelines (HealthCare.gov glossary) |
| 2. Your required contribution | Income × the applicable percentage for your FPL tier | IRS Revenue Procedure 2025-25 (current rules) |
| 3. Your credit | Benchmark Silver premium − required contribution (floored at $0) | 26 U.S.C. § 36B |
The benchmark is the second-lowest-cost Silver plan (SLCSP) in your area. Buy a cheaper Bronze plan and the same credit still applies, which is why some shoppers pay $0 after credits. Buy a Gold plan and you pay the difference above the benchmark yourself.
The two schedules, side by side
Current rules — original ACA schedule (IRS Revenue Procedure 2025-25):
| Income (% FPL) | Required contribution (% of income) |
|---|---|
| Up to 133% | 2.10% |
| 133% to 150% | 3.14% to 4.19% |
| 150% to 200% | 4.19% to 6.60% |
| 200% to 250% | 6.60% to 8.44% |
| 250% to 300% | 8.44% to 9.96% |
| 300% to 400% | 9.96% |
| Above 400% | No credit — you pay the full premium |
Old enhanced credits (2021–2025, American Rescue Plan / Inflation Reduction Act, for comparison):
| Income (% FPL) | Required contribution (% of income) |
|---|---|
| Up to 150% | 0% |
| 150% to 200% | 0% to 2% |
| 200% to 250% | 2% to 4% |
| 250% to 300% | 4% to 6% |
| 300% to 400% | 6% to 8.5% |
| Above 400% | 8.5% — no cliff |
Within each tier the percentage slides linearly with income — the calculator interpolates exactly that way, the same method the IRS table implies.
Poverty guidelines the calculator uses
2026 HHS poverty guidelines for the 48 contiguous states and D.C. (HealthCare.gov glossary) — these are the figures that set 2027 coverage thresholds:
| Household size | 100% FPL | 400% FPL (the cliff) |
|---|---|---|
| 1 | $15,960 | $63,840 |
| 2 | $21,640 | $86,560 |
| 3 | $27,320 | $109,280 |
| 4 | $33,000 | $132,000 |
| 5 | $38,680 | $154,720 |
| 6 | $44,360 | $177,440 |
| 7 | $50,040 | $200,160 |
| 8 | $55,720 | $222,880 |
For households larger than 8, add $5,680 per additional person (HHS). Alaska and Hawaii use higher guidelines — see the FAQ.
Worked example: the cliff in dollars
A single person at exactly 400% FPL ($63,840) with a $741/month benchmark premium:
| Current rules | Old enhanced credits | |
|---|---|---|
| Required contribution | 9.96% × $63,840 = $6,358/yr ($529.87/mo) | 8.5% × $63,840 = $5,426/yr ($452.20/mo) |
| Credit | $8,892 − $6,358 = $2,534/yr | $8,892 − $5,426 = $3,466/yr |
| You pay | $529.87/mo | $452.20/mo |
Now add $1 of income — $63,841, just over the cliff. Under current rules the credit drops from $2,534/year to $0, and the monthly payment jumps from $529.87 to the full $741. That $211/month jump from $1 of extra income is the cliff. Under the old enhanced rules the same person would pay $452.21 — a 1-cent change.
Before December 15: your checklist
Open enrollment for 2027 coverage on HealthCare.gov runs November 1, 2026 through January 15, 2027, and December 15, 2026 is the deadline for coverage starting January 1, 2027 (HealthCare.gov). State-run Marketplaces can differ — California's deadline for a January 1 start is December 31, for example — so confirm your state's date.
- Do not auto-renew blind. Your 2026 plan's premium, network, and drug list can all change on January 1, and some 2026 plans are exiting Marketplaces. Compare before you let it roll over.
- Update your income estimate. The credit is computed from projected MAGI, not last year's tax return. A raise, bonus, or side income that pushes you over 400% FPL removes the entire credit — report changes promptly to avoid a tax-time repayment.
- Price Bronze against Silver. The same credit applies to any metal tier. If the credit covers a Bronze premium entirely, $0-premium Bronze may beat a Silver plan you pay for — but check the deductible first.
- Check your doctors and drugs. Networks and formularies reset annually. A plan that looks cheaper can cost more if your prescriptions leave the formulary.
- Pay the first premium. Enrollment is not coverage until the first month's premium is paid.
- If you are over the cliff, shop off-Marketplace too. Without a credit, identical plans are sometimes cheaper directly from the insurer — but only Marketplace plans carry premium tax credits if your income later drops.
Sources
- HHS poverty guidelines, 2026 figures by household size — HealthCare.gov glossary, "Federal poverty level (FPL)."
- Original-schedule applicable percentages (2.10% to 9.96%, no credit above 400% FPL) — IRS Revenue Procedure 2025-25.
- Enhanced-schedule percentages (0% to 8.5%, no income cap) — American Rescue Plan Act / Inflation Reduction Act, 2021–2025.
- Enhanced credits expired December 31, 2025; 2026 premium payments up 58% on average — KFF / Peterson-KFF Health System Tracker.
- Pre-expiration estimate of a 114% increase in subsidized enrollees' net premium payments ($888 to $1,904/year) — KFF, September 2025.
- 2026 national average monthly premium before subsidies, $741 — CMS, via KFF coverage of 2026 enrollment data. Used here only as the calculator's illustrative default benchmark.
- Open enrollment November 1, 2026 – January 15, 2027; December 15, 2026 deadline for January 1, 2027 coverage — HealthCare.gov.
Estimates only, not tax or insurance advice. This calculator illustrates the statutory premium-credit formula on a benchmark premium you enter; it is not a Marketplace quote and does not account for age rating, tobacco surcharges, cost-sharing reductions, or state-specific rules. Verify your actual premium and credit on HealthCare.gov or your state Marketplace before enrolling.
Frequently asked questions
What is the ACA subsidy cliff?
Under the original Affordable Care Act rules, premium tax credits stop entirely above 400% of the federal poverty level (FPL). Earn $1 over that line and the whole credit disappears — it does not phase out gradually. For 2027 coverage, 400% FPL is $63,840 for a single person and $132,000 for a family of four (2026 HHS poverty guidelines, via HealthCare.gov). From 2021 through 2025 the enhanced credits suspended the cliff; they expired December 31, 2025, and have not been renewed.
How is my premium tax credit actually calculated?
Credit = benchmark premium − required contribution. The benchmark is the second-lowest-cost Silver plan (SLCSP) in your area. Your required contribution is your household income × an applicable percentage set by the IRS, which rises with income. If the benchmark costs less than your required contribution, the credit is $0 and you simply pay the benchmark price. The Marketplace computes the final figure from your exact MAGI; this calculator shows the same math on the benchmark premium you enter.
What were the enhanced credits, and why is my premium higher now?
From 2021 through 2025, the American Rescue Plan and Inflation Reduction Act capped everyone's benchmark contribution at 8.5% of income and removed the 400% FPL cap entirely. Those enhancements expired December 31, 2025. Under the restored original schedule (IRS Revenue Procedure 2025-25), contributions run from 2.10% to 9.96% of income and stop above 400% FPL. KFF found that Marketplace enrollees' premium payments rose 58% on average in 2026 after the expiration.
Why does the calculator ask for a benchmark premium instead of giving me a price?
Benchmark Silver premiums vary by age, ZIP code, and insurer — there is no single national price. The default $741/month is illustrative only: the 2026 national average monthly premium before subsidies reported by CMS. For a personal estimate, replace it with your area's second-lowest-cost Silver premium from HealthCare.gov or your state Marketplace.
Does this calculator handle Alaska and Hawaii?
No — it uses the 48 contiguous states and D.C. poverty guidelines. Alaska and Hawaii have higher guidelines (for example, 100% FPL is $19,550 in Alaska and $17,990 in Hawaii under the 2025 guidelines), so their cliff thresholds are higher. If you live in either state, use your state's guideline as the base and the same percentage tables.
What if my income is below 100% FPL?
Premium tax credits are generally not available below 100% FPL. In states that expanded Medicaid, you may qualify for Medicaid instead (generally up to 138% FPL). Apply through your state Marketplace or Medicaid agency — they will route you to the right program.
Estimates only, not tax or financial advice. Figures reflect the 2026 tax year. Verify important decisions with the IRS or a qualified tax professional.