The ACA Subsidy Cliff Is Back: What to Check Before You Pick a 2027 Plan

Open enrollment for 2027 ACA Marketplace coverage opens November 1, 2026 — and for anyone whose household income sits anywhere near four times the federal poverty level, this is the second enrollment season under rules that many enrollees have not internalized yet. The temporary “enhanced” premium tax credits that ran from 2021 through 2025 expired on December 31, 2025, and the subsidy structure reverted to the original ACA design. If your picture of ACA subsidies still includes “8.5% of income no matter what,” that picture is out of date.

What the cliff actually is

The original ACA premium tax credit is available to households earning between 100% and 400% of the federal poverty level (FPL), with the required premium contribution rising stepwise as income rises. Above 400% FPL, the credit is zero — a hard cutoff, not a phase out. Earn one dollar over the line and you lose the entire credit, not a slice of it.

In dollars, using the 2025 poverty guidelines that govern the 2026 plan year (the line for 2027 coverage, based on the 2026 guidelines, will be slightly higher — check HealthCare.gov for the figure that applies when you enroll), the line sits at roughly:

• $62,600 for a household of one
• $84,600 for a household of two

(48 contiguous states and DC; Alaska and Hawaii use higher figures.) Crossing it does not lock you out of coverage: you can still buy any Marketplace plan at full price, and a household above 400% FPL whose cheapest available plan is unaffordable by the ACA’s own standard may qualify for an affordability exemption that permits purchasing a lower-premium Catastrophic plan — an exemption that is conditional, not automatic. But the subsidy itself is gone.

The Congressional Budget Office has estimated that letting the enhanced credits expire would substantially reduce the number of people covered by subsidized exchange plans, and industry analyses have put those newly ineligible in the millions.

Four changes that ride along with the reversion

The cliff gets the headlines, but the 2026 reversion changed enrollment mechanics in ways that matter just as much this November:

1. Contribution percentages went up. The required premium contribution at each income level returned to the original ACA schedule, indexed for inflation — higher at every rung than under the enhanced credits.
2. Repayment caps are gone. If you take the credit in advance and your actual income ends the year higher than you estimated, you reconcile the difference on your tax return. Under the old rules, repayment was capped by income; for 2026, that cap no longer exists. Underestimating income near the cliff now repays the full excess credit.
3. Re-enrollment is no longer automatic with the credit attached. Under CMS’s 2025 Marketplace Integrity rule, the federal platform stopped simply rolling coverage and subsidy over year after year: enrollees who do not verify their information face a monthly surcharge during the transition, and skipping verification altogether puts the advance credit at risk. Practically, treat re-enrollment as an annual task — confirm your information, check your plan, and re-attach the credit deliberately.
4. The under-150% FPL year-round window ended, and the enrollment window itself shrank. Very-low-income households lost the monthly special enrollment period and now enroll during the standard window or after a qualifying life event. Under the same rule, the federal open-enrollment window now closes at the end of December rather than running to mid-January. These mechanics apply on the federal platform; state-run marketplaces set their own rules and deadlines, so confirm both on HealthCare.gov or your state’s marketplace before you plan around a date.

One protection survived: cost-sharing reductions (lower deductibles and out-of-pocket maximums) still apply to Silver plan enrollees earning 100–250% FPL. If your income is in that band, a Silver plan is usually the right place to start looking.

The legislative status is live — do not plan around a bill

A bill to restore the enhanced credits passed the House in January 2026 but did not become law; Senate efforts have not advanced. Congress can revisit this at any time, and if the enhancement returns, the math changes again. The working rule: plan with the law as it stands today, verify the current status on congress.gov and HealthCare.gov when you enroll, and treat any “subsidies are coming back” claim from an insurance salesperson as a closing tactic, not a fact.

Four checks to run before November 1

1. Locate yourself against the line. Eligibility uses your projected household MAGI (modified adjusted gross income) for the coverage year — roughly adjusted gross income plus tax-exempt interest, untaxed Social Security benefits and excluded foreign income. Project 2027, not 2026. Know your household size’s dollar line.
2. If you are near the line, manage MAGI legally and early. Pre-tax contributions — traditional 401(k), IRA, HSA — reduce MAGI. For a household hovering near 400% FPL, a retirement contribution made by December 31 can be the difference between a subsidized plan and full price. This is a decision to make in December, not at tax time.
3. If your income is variable, estimate conservatively. With repayment caps gone, an optimistic income estimate near the cliff is a tax bill waiting to happen. Estimate high rather than low if you are unsure, and report income changes to the Marketplace during the year instead of waiting to reconcile.
4. Re-enroll actively and check plan fit, not just price. Verify your information, run your actual numbers through the Marketplace, and if your income is 100–250% FPL, price Silver plans for the cost-sharing reduction. Premium is only part of the bill — the deductible structure is the rest.

The mechanics of the Marketplace itself are in ACA Marketplace Basics, and the refund checks that spawned a wave of “release your payment” scams this fall are covered in The $500 Obamacare Refund.

Bottom line

The cliff is the law until Congress changes it, and it turns a modest income difference into a total subsidy loss. Know your household’s dollar line, project your 2027 MAGI honestly, lean conservative if your income varies, and re-enroll actively when the window opens November 1. The worst outcome is not paying full price on purpose — it is discovering the cliff on your tax return.

This article is general information about federal Marketplace rules, not advice about your specific tax situation or plan choice. Eligibility figures depend on household size, state and year — confirm current numbers at HealthCare.gov.