ACA subsidy cliff 2027: the Obamacare income limits

• $63,840400 percent of the poverty line for one person, the 2027 cliff
• $132,000400 percent of the poverty line for a family of four
• 10.22%most you are expected to pay for the benchmark plan below the cliff in 2027

2027 Obamacare income limits by household size

Marketplace coverage for 2027 uses the 2026 federal poverty guidelines. Here is the line, for the 48 contiguous states:

From the HHS 2026 poverty guidelines. Alaska and Hawaii use higher guidelines. Your household is generally everyone on your tax return.

The number that counts is your modified adjusted gross income, or MAGI, for 2027. That is your adjusted gross income plus any tax-exempt interest, untaxed foreign income and the nontaxable part of Social Security. It is not your salary, and it is not your take-home pay.

What the cliff actually means

Below 400 percent, the IRS caps what you pay for the benchmark silver plan at a share of income, from 2.15 percent at the bottom to 10.22 percent at the top for 2027. The credit covers the rest. At 400 percent plus one dollar, the credit is zero. There is no phase-out and no partial credit.

From 2021 through 2025, enhanced credits removed that cliff, and people above 400 percent paid no more than 8.5 percent of income for the benchmark plan. They expired January 1, 2026. The House passed a three year extension in January 2026, but as of late September 2026 it has not become law, so the cliff applies to 2027 coverage.

How big the drop is, in real dollars

Using 2026 Hillsborough County, Florida prices and the 2027 percentages, here is what a small raise can cost. These are illustrations, since 2027 prices post November 1.

Credit equals the benchmark silver premium minus 10.22 percent of income, times 12. Your ZIP code, ages and final 2027 prices change the result. Run yours in my subsidy calculator.

Read that couple line again. For two 60 year olds, earning $1,000 more can cost about $24,000 in lost credits. That is why the cliff is the single most important number in health insurance for people in their late 50s and early 60s.

Who gets hit hardest

• People 50 to 64. Premiums rise with age, so the credit they lose is much bigger than a younger person's.
• Couples and larger families. Each person adds premium, and the lost credit scales with it.
• Self employed people and early retirees. Their income moves around, and a good year can push them over without warning.
• People in high premium areas. The higher the local benchmark, the more credit there is to lose.

Legal ways to lower your MAGI

Because the credit depends on MAGI, some contributions you may already want to make can keep you under the line. The IRS rules behind each one:

• HSA contributions. Bronze and catastrophic plans have been HSA compatible since January 1, 2026. The IRS lets you deduct your own HSA contributions even if you do not itemize. For 2027 the limit is $4,500 for self-only coverage and $9,000 for family coverage, plus $1,000 if you are 55 or older.
• Pre-tax 401(k) or 403(b) contributions. Traditional contributions come out before your taxable wages. The 2026 limit is $24,500, plus an $8,000 catch-up at 50 and older. The IRS usually announces the next year's limits in the fall.
• Traditional IRA contributions. The 2026 limit is $7,500, plus $1,100 at 50 and older. HealthCare.gov lists deductible IRA contributions among the adjustments that lower AGI. The deduction can be limited if you or your spouse has a workplace plan.
• Self employed retirement plans and the health insurance deduction. Business owners can often lower AGI through their own retirement plan and the self-employed health insurance deduction. IRS Publication 974 explains the special calculation when you claim that deduction alongside the premium tax credit.
• Watch what raises MAGI. Roth conversions, capital gains, traditional IRA withdrawals and tax-exempt interest all count. Timing them can matter as much as any deduction.

I'm a health insurance broker, not a tax advisor. Run any of these by your CPA before you act, especially if you are near the line.

Why guessing wrong costs more now

Your credit is paid in advance based on your estimate, then settled on your tax return. The IRS confirms that for tax years after 2025 there is no cap on repaying excess advance credits. If you estimate $125,000 for a family of four and finish at $135,000, you repay the whole year of credits. Update your marketplace application during the year if your income changes.

If you are well over the line

If your household earns far above 400 percent, none of this changes your price, and you should not bend your finances to chase a credit you cannot reach. Your question becomes which plan gives you the most for full price. In many places that is a gold plan, which silver loading can make cheaper than silver, or a bronze plan with an HSA. Some people look at private PPO coverage too. I walk through those options for self employed people and in my guide to low deductible PPO plans. I'm Carson Hornish, and my help costs you nothing.

Common questions