ACA Subsidy Cliff 2027: $1 Over 400% of Poverty Can Cost a 60-Year-Old $9,403
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The enhanced credits expired, so the 400% FPL cliff is back for 2027 coverage: $63,840 for a single person, $132,000 for a family of four. See your premium tax credit, how far you are from the cliff, and what you'd repay at tax time now that the repayment caps are gone.
Who the cliff actually hits
From 2021 through 2025 there was no income cap on the premium tax credit: nobody paid more than 8.5% of income for the benchmark silver plan. That rule expired on December 31, 2025. The House passed a three-year extension in January 2026, but the Senate hasn’t, so 2027 coverage uses the original rules. Above 400% of the federal poverty level, the credit is zero.
The cliff is the same income for everyone in a household size ($63,840 for one person, $86,560 for two, $132,000 for four in the 48 states). What you lose by crossing it depends on age, because premiums rise with age and the required contribution doesn’t. We ran KFF’s 2026 average benchmark premium ($625 a month for a 40-year-old) through the CMS default age curve, at exactly 400% of poverty:
| Age | Single: benchmark per year | Single: credit lost at the cliff | Couple (same age): benchmark | Couple: credit lost |
|---|---|---|---|---|
| 30 | $6,661 | $136 | $13,322 | $4,475 |
| 40 | $7,500 | $976 | $15,000 | $6,154 |
| 50 | $10,481 | $3,957 | $20,962 | $12,116 |
| 55 | $13,087 | $6,562 | $26,174 | $17,327 |
| 60 | $15,927 | $9,403 | $31,854 | $23,008 |
| 64 | $17,606 | $11,081 | $35,211 | $26,365 |
For a 30-year-old the cliff is almost nothing: at $63,840 they’re already expected to pay 10.22% of income, $6,524, which nearly covers a $6,661 premium. A 60-year-old couple at $86,560 loses $23,008, more than a quarter of their income. That’s who should watch MAGI to the dollar: early retirees, people between jobs and self-employed couples in their 50s and 60s.
How to keep MAGI under the line, and why an unexpected bonus in December can cost more than the bonus itself, is worked through in the 2027 cliff for early retirees.
How the math works
- Income as % of poverty:
MAGI ÷ poverty guideline. 2027 coverage uses the 2026 HHS guidelines: $15,960 for one person plus $5,680 for each additional person in the 48 states and DC ($19,950 + $7,100 in Alaska, $18,360 + $6,530 in Hawaii). - Required contribution:
MAGI × applicable percentage. The 2027 table (Rev. Proc. 2026-26): 2.15% below 133% of poverty, rising to 4.3% at 150%, 6.78% at 200%, 8.66% at 250%, and 10.22% from 300% to 400%. Within each band the percentage rises in a straight line. - Credit:
benchmark premium × 12 − required contribution, never below zero, and nothing above 400%. - Benchmark premium: the second-lowest-cost silver plan. The tool takes the price for a 40-year-old and multiplies by each person’s age factor divided by 1.278 (the factor at 40): 2.714 at 60, 3.000 at 64, 0.765 for children up to 14.
MAGI for the credit is AGI plus tax-exempt interest, the untaxed part of Social Security benefits and excluded foreign income. If the advance credit was based on a lower estimate, you repay the difference on Form 8962; the One Big Beautiful Bill Act removed the repayment caps starting with tax year 2026.
Math runs locally. Inputs never leave your browser. Source on github.
Where this doesn’t apply
- An affordable employer offer. If an employee can get self-only employer coverage costing less than 10.22% of household income (the 2027 threshold), the employee can’t get the credit. Family members are tested on the cost of family coverage.
- Medicaid and CHIP. Under 138% of poverty in expansion states, adults usually qualify for Medicaid instead. Children often qualify for CHIP at higher incomes.
- States with their own subsidies. Several states, including California, New Jersey and New Mexico, add state money on top of the federal credit. Your state exchange’s quote can be lower than this.
- States with their own age curve. A few states (including New York and Vermont, which don’t rate by age at all) don’t use the CMS default, so the age scaling here won’t match.
- Congress acts. If an extension of the enhanced credits passes, the cliff disappears again and the percentages fall. The tool follows current law as of October 2026.
What to actually do
- When open enrollment starts November 1, look up the benchmark (second-lowest silver) premium for a 40-year-old at your ZIP code and enter it.
- Estimate 2027 MAGI honestly, including capital gains distributions from funds and the untaxed part of Social Security.
- If you’re within a few thousand dollars of the cliff, plan the levers before December: pre-tax 401(k) or traditional IRA contributions, an HSA if your plan qualifies, and the timing of any Roth conversion or asset sale.
- Update your Marketplace application during the year if income changes. Without the repayment cap, an overestimate of the credit is repaid in full.
- If you’re over the cliff by a lot, compare the full-price benchmark with a bronze plan and an HSA strategy; if you’re leaving a job, compare with COBRA first.