The Enhanced Premium Tax Credit Expired: Your 2027 Coverage Math, by Income
The enhanced premium tax credit — the pandemic-era boost that capped the cost of a benchmark marketplace plan at 8.5% of your income no matter how much you earned — is gone. It lapsed on January 1, 2026, and Congress has not renewed it. For 2027 coverage, that expiration collides with a second force: insurers are filing double-digit rate increases again. So the same plan you had can cost meaningfully more next year for two separate reasons stacked on top of each other.
This guide skips the policy debate and answers the only question that matters when you sit down to enroll: what does your marketplace plan actually cost in 2027, and what can you still do about it? The answer depends almost entirely on where your income lands relative to the federal poverty level (FPL) — so we'll walk it band by band.
The one-line version: If your income is under about 138% of FPL, check Medicaid first — you may pay nothing. Between roughly 138% and 400% of FPL, you still get a premium tax credit, but a smaller one than the enhanced era gave you. Above 400% of FPL, the "subsidy cliff" is back: no credit at all.
What the enhanced premium tax credit was — and what expired
Under the original Affordable Care Act, premium tax credits phase out completely at 400% of the federal poverty level, and the share of income you're expected to pay rises as you earn more. The American Rescue Plan Act of 2021 rewrote that math temporarily: it lowered the expected-contribution percentages across the board and, critically, removed the 400% cutoff so that anyone — regardless of income — paid no more than 8.5% of household income for the benchmark Silver plan. The Inflation Reduction Act extended those enhanced terms through the 2025 plan year. They were never made permanent.CRS R48290
As of the 2026 plan year, the pre-2021 rules are back in force: the applicable-percentage table returned, and with it the hard 400% cliff. That's already true today. What's new for 2027 is the second wave — the sticker price of the plans themselves.
Two things are happening at once for 2027
It's worth separating the two, because they hit different people differently.
1. The enhanced credit is gone (a subsidy change). This is what shrank your net premium starting in 2026. When the credits lapsed, KFF estimated the average subsidized enrollee's premium payments would more than double — roughly a 114% jump, from about $888 to $1,904 a year.KFF
2. The 2027 sticker premiums are rising (a price change). In their preliminary 2027 rate filings, most ACA insurers proposed increases between 10% and 25%, on top of an already steep climb this year. Analysts attribute roughly 4 percentage points of that specifically to a sicker, smaller risk pool — healthier enrollees dropped out after subsidies shrank, and insurers are pricing for who's left.KFF rate filings That enrollment contraction is real: marketplace sign-ups fell to about 23.1 million from 24.2 million a year earlier — the sharpest single-year drop since the exchanges launched — and effectuated enrollment slid to roughly 19.2 million by February 2026.Peterson-KFF
The practical upshot: for a subsidized enrollee, the credit change already did most of the damage in 2026. The 2027 rate hikes add to your net cost only where the credit doesn't fully absorb them — and for unsubsidized enrollees above 400% FPL, they land in full.
Your 2027 coverage math, by income band
Because the 2027 credit uses the 2026 federal poverty guidelines, here are the reference points that matter: 400% of FPL is about $63,840 for one person and $132,000 for a family of four in the 48 contiguous states.FPL 2026 Find your band below, then run your exact numbers through the subsidy calculator.
Under ~138% FPL (about $22,000 single / $45,500 for four): check Medicaid first
In the 40 states plus D.C. that expanded Medicaid, adults under roughly 138% of the poverty line qualify for Medicaid, not a marketplace plan — and that means little or no premium at all. Before you shop the marketplace, look up your state's exact limit on our Medicaid eligibility pages; the income line and the rules for children (CHIP often reaches higher) vary by state. If you're in a non-expansion state and fall into the coverage gap, the marketplace math below still applies down to 100% FPL.
100–250% FPL: still the best-protected band
This is where the remaining subsidies concentrate. Not only do you get a premium tax credit, you also qualify for cost-sharing reductions (CSRs) that quietly boost the value of Silver plans — lower deductibles and out-of-pocket maximums that don't show up in the premium number. Your net premium is higher than it was under the enhanced credits, but this band absorbed the smallest hit. If you're here, a Silver plan is almost always the right metal tier because you forfeit CSRs on Bronze or Gold.
250–400% FPL: the biggest felt squeeze among subsidized enrollees
You still receive a credit, but the applicable-percentage table now expects you to contribute a larger share of income than the flat 8.5% cap did — and CSRs have phased out by this point. This is the band where households most often feel the enhanced-credit expiration and the 2027 rate hike at the same time. It's also the band where shopping matters most: switching to the new benchmark plan (the second-cheapest Silver, which your credit is pegged to) can claw back a chunk of the increase, because your subsidy is calculated against that benchmark whether or not you buy it.
Above 400% FPL: the cliff is back
Earn one dollar over the 400% threshold and your premium tax credit drops to zero. You pay the full, unsubsidized premium — which is exactly the number rising 10–25% for 2027. For an older enrollee in a high-cost rating area, that can mean a plan north of $1,000 a month with no assistance. Two moves are worth modeling before you accept it: bringing your MAGI back under the line, and comparing a Bronze-plus-HSA strategy against Silver.
The cliff is a MAGI cliff, not an income cliff. It's based on modified adjusted gross income, which you have some control over. A single dollar of overage costs your entire subsidy — so if you're close, the levers below can be worth thousands.
| Income band (of FPL) | Premium tax credit? | What changed most |
|---|---|---|
| Under ~138% | Usually Medicaid instead | Check state Medicaid line first |
| 100–250% | Yes + cost-sharing reductions | Smallest net increase; stay on Silver |
| 250–400% | Yes, but smaller | Enhanced-cap loss + 2027 rate hike stack here |
| Above 400% | None (cliff) | Full unsubsidized premium, up 10–25% |
The levers you still have for 2027
- Manage your MAGI. Pre-tax retirement contributions, an HSA, and self-employed deductions all lower the income figure your subsidy is measured against. If you're just over 400% FPL, getting back under restores the entire credit. See how to lower your MAGI for an ACA subsidy.
- Re-shop the benchmark. Your credit is pinned to the second-cheapest Silver plan in your area, and that plan changes year to year. Auto-renewing into last year's plan can quietly raise your net cost even when the subsidy math didn't move against you.
- Estimate income carefully. The credit is advanced based on your projected income, then reconciled on your tax return. Underestimate and you repay some of it; overestimate and you get money back. Read how premium tax credit repayment works before you guess.
- Weigh Medicaid vs. marketplace at the margin. If your income fluctuates around the Medicaid line, small changes flip you between programs mid-year. Our Medicaid vs. marketplace guide covers what that transition looks like.
Key 2027 enrollment dates
In most states, open enrollment for 2027 coverage runs November 1, 2026 through January 15, 2027. Enroll by December 15 for coverage that starts January 1; enroll December 16–January 15 and coverage starts February 1.HealthCare.gov One caveat worth knowing: a 2025 federal rule that would have shortened the federal window to December 15 was vacated by a court in June 2026, but the change is under appeal — so confirm your state's dates before you assume you have until January.healthinsurance.org
Run your 2027 numbers before you renew
Enter your projected 2027 income and household size to see your estimated premium tax credit — and whether you fall under your state's Medicaid line instead.
Estimate my subsidyFrequently asked questions
Will Congress bring the enhanced premium tax credit back for 2027?
As of early September 2026, no extension has been enacted for 2027. A shorter-term extension has been debated in Congress without becoming law. Plan around the rules that are actually in effect — the pre-2021 applicable-percentage table and the 400% cliff — and treat any future extension as upside, not a reason to wait.
I was just under 400% FPL last year and got a subsidy. Why is mine so much smaller now?
Two reasons can stack. Even below 400%, the expected-contribution percentages went up when the enhanced credits expired, so the credit shrank. And if your income also rose relative to the poverty line, you moved into a band that's expected to pay a larger share. The cliff only zeroes out the credit above 400% — below it, the credit gets smaller gradually.
Does the 2027 rate increase affect people who get a subsidy?
Partly. Your premium tax credit is tied to the benchmark Silver plan's price, so when benchmarks rise your credit generally rises with them. The rate hike bites hardest when you buy a plan other than the benchmark, or when you're above 400% FPL and receive no credit at all.
Should I drop marketplace coverage if it's now unaffordable above the cliff?
Before dropping coverage, model a Bronze plan paired with an HSA, check whether lowering your MAGI restores a credit, and confirm you're not eligible for Medicaid or CHIP for any household members. Going uninsured exposes you to the full cost of a serious medical event, which is almost always larger than a year of premiums.
Your next step: don't auto-renew. Pull your projected 2027 income, check your state's Medicaid line on the eligibility pages, then run the calculator against the second-cheapest Silver plan in your area. For most households, the difference between doing that and clicking "renew" is measured in hundreds of dollars a month.