What changed, and why your premium jumped
The American Rescue Plan capped what anyone pays for a benchmark silver plan at 8.5% of income and removed the 400% poverty-level limit on eligibility. Congress extended that through 2025 and let it lapse on December 31, 2025. Two things happened at once for 2026 and 2027: the expected contribution percentages rose across every income band, and households above 400% of the poverty level lost their credit outright.
| Income as % of poverty level | You pay (2025, enhanced) | You pay (2027, Rev. Proc. 2026-26) |
|---|---|---|
| Under 133% | 0% | 2.15% |
| 133% to 150% | 0% | 3.23% rising to 4.30% |
| 150% to 200% | 0% to 2.0% | 4.30% rising to 6.78% |
| 200% to 250% | 2.0% to 4.0% | 6.78% rising to 8.66% |
| 250% to 300% | 4.0% to 6.0% | 8.66% rising to 10.22% |
| 300% to 400% | 6.0% to 8.5% | 10.22% |
| Over 400% | 8.5% | No credit |
A household at 180% of the poverty level paid nothing for a benchmark plan in 2025 and pays 5.8% of income in 2027. A household at 410% paid 8.5% and now pays the sticker price.
Where the 2027 cliff sits
The exchange compares your income with the 2026 HHS poverty guidelines for the 48 contiguous states and DC, which start at $15,960 for one person and add $5,680 for each additional person. Four times those figures is the line you cannot cross.
| Household size | 100% of poverty level | 400%: 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 |
Alaska and Hawaii use higher guidelines, so the figures above understate both ends for those two states.
The cliff punishes a raise
Take a 60-year-old couple in a county where the benchmark plan costs $1,900 a month. At $86,560 of income they pay 10.22%, which is $8,846 for the year, and the credit covers the remaining $13,954. Earn $86,561 and they pay all $22,800. One dollar of income costs them $13,954, so accepting a $2,000 bonus leaves them $11,954 poorer.
That arithmetic is why the four levers below matter more than plan shopping for anyone within a few thousand dollars of the line.
Four ways to stay under the line
- Contribute to a traditional 401(k) or 403(b). Deferrals cut MAGI dollar for dollar, up to $24,500 in 2026 plus catch-up contributions at 50 and over.
- Fund an HSA. A bronze or silver plan that qualifies as high-deductible lets a family deduct several thousand more, and the deduction reduces MAGI whether or not you itemise.
- Deduct a traditional IRA contribution if your income falls inside the deduction limits.
- Time self-employment income and capital gains. Both land in MAGI. Pulling an invoice or a stock sale into the following January keeps this year's figure down. Harvesting losses works the same way.
Each of these moves also cuts your federal tax, which the take-home pay calculator will show for your state.
Repaying a credit you were not entitled to
The exchange pays your credit monthly on the strength of an income estimate you make in November. Form 8962 reconciles the estimate against your actual 2027 income when you file in 2028. Underestimate and you repay the difference, and above 400% of the poverty level you repay every dollar of advance credit with no cap. A household that estimated $80,000 and earned $88,000 can owe back $14,000. Report income changes to the exchange during the year rather than at filing.
Frequently asked questions
When does open enrollment for 2027 run?
November 1, 2026 to January 15, 2027 on HealthCare.gov. Enrol by December 15 for cover starting January 1. Several state exchanges run later deadlines.
Which year's income does the exchange use?
Your estimate of 2027 income, not your 2026 return. The IRS reconciles it on Form 8962 after the year ends.
What counts in MAGI?
Adjusted gross income plus tax-exempt interest, excluded foreign income and the untaxed portion of Social Security benefits. Pre-tax retirement and HSA contributions reduce it.
Does the benchmark plan have to be the plan I buy?
No. Your credit is fixed by the second-lowest-cost silver plan in your area, and you may apply it to any metal level. Buy bronze and you keep the difference; buy gold and you pay it.
What if my employer offers coverage?
An offer of affordable employer coverage disqualifies you. For 2027 the affordability test is 10.22% of household income for employee-only coverage.
Could Congress restore the enhanced credits?
Several bills propose it, and none had passed when this page was written. The figures here follow the law as it stands under Rev. Proc. 2026-26.