ACA Subsidies in 2026: What Changed and What It Means for You

What were the enhanced subsidies?

In 2021, the American Rescue Plan temporarily expanded ACA marketplace subsidies in two big ways. First, it lowered the percentage of income that people were expected to pay toward their premiums. Second, it eliminated the income cap. Before 2021, you got no help if your income was above 400% of the federal poverty level (about $58,000 for a single person at the time). The ARP removed that ceiling entirely.

The Inflation Reduction Act extended these changes through the end of 2025. During that time, roughly 21 million people enrolled through HealthCare.gov and state marketplaces, a record.

What expired on January 1, 2026?

Both of those changes went away. Specifically:

• The income cap at 400% FPL is back. If you earn more than $62,600 (single) or $128,600 (family of four), you no longer get any subsidy. Full stop.
• The premium contribution percentages went up. At 200% FPL, for example, you were paying about 2% of income toward your premium. Now it's about 6.6%. At 300% FPL, it jumps from roughly 6% to nearly 10%.

The Congressional Research Service estimates that subsidized enrollees will pay an average of 114% more in premiums, roughly double what they paid in 2025. That's an increase from about $888/year to $1,904/year on average.

The cliff is the worst part

The return of the 400% FPL subsidy cliff is the most painful change. At 399% FPL, you get a subsidy. At 401%, you get nothing. There's no gradual phase-out.

For a single person, the cutoff is about $62,600 in annual income. For a 60-year-old just above that line, the difference can be staggering. Marketplace premiums for older adults often run $1,200-$1,800 per month. Going from subsidized to unsubsidized means an extra $10,000-$15,000 per year out of pocket, just because your income is slightly too high.

This creates perverse incentives. People near the cliff may deliberately limit their income, turn down overtime, or contribute more to retirement accounts to stay under the line.

Who is affected most?

Three groups are hit hardest:

Older adults near 400% FPL. Insurance companies are allowed to charge people in their 50s and 60s up to three times more than younger adults. Without a subsidy to offset that, premiums become a huge share of their income.

People who were above 400% FPL and getting help for the first time. About 5 million people qualified for subsidies under the enhanced rules who wouldn't have qualified before. They lost all help overnight.

Lower-income people who still qualify, but get less. A family at 200% FPL still gets a subsidy, but the required premium contribution more than tripled (from about 2% to 6.6% of income).

Did Congress try to extend them?

Yes. The House passed a three-year extension on January 8, 2026, with bipartisan support (230 to 196, with 17 Republicans voting yes). But the Senate version, the Lower Health Care Costs Act (S.3385), failed to get 60 votes.

A bipartisan group of senators is working on a compromise called the CARE Act, which would restore enhanced subsidies for two years while adding minimum premium payments and income verification. As of March 2026, it hasn't passed.

What didn't change

A few things to know:

• Subsidies still exist for people between 100% and 400% FPL. They're smaller, but they're there.
• Cost-sharing reductions (CSR) on Silver plans are unchanged. If your income is below 250% FPL and you pick Silver, you still get a plan with lower deductibles and copays. This was never part of the enhanced subsidy expansion.
• Medicaid expansion is unaffected. States that expanded still cover adults up to 138% FPL.
• The marketplace itself still works the same. Same plans, same enrollment process, same website.

What you should do

If you auto-renewed: Log into HealthCare.gov and check your actual 2026 premium and tax credit. Many people auto-renewed without realizing their costs changed. You might find that switching plans saves money, even if your current plan technically still exists.

If your income is near 400% FPL: Consider strategies to stay under the cliff. Traditional IRA contributions, HSA contributions (if you have an HSA-eligible plan), and adjusting retirement plan withholdings can lower your MAGI.

If you lost your subsidy entirely: Look at Bronze or short-term plans. Also check if your employer offers coverage. Employer plans are not subject to the cliff.

Check your subsidy

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