Will you receive an ACA premium subsidy?
How the Affordable Care Act's subsidies are calculated, and who is eligible to receive them
In this article
- Do I qualify for ACA premium subsidies?
- Are health insurance subsidies available to fewer consumers because the subsidy enhancements expired?
- Is the subsidy cliff still affecting eligibility?
- How many consumers receive premium subsidies?
- Can I get ACA subsidies if my employer offers health benefits?
- Are people with Medicaid or CHIP eligible for premium subsidies?
- Am I too old for a premium subsidy?
- Is my income too low for me to be subsidy-eligible?
- Can I get a subsidy if I lose my Medicaid because of Medicaid work requirements?
- Do I have to be a U.S. citizen to get a premium subsidy?
- Eligibility for ACA subsidies is based on the cost of Silver plans
- How to estimate your ACA subsidy in five easy steps
- Sample subsidy calculations for 2027
An ACA premium subsidy can lower what you pay each month for health insurance purchased through the Marketplace. Whether you qualify – and how much you could save – depends on your age, household income, where you live, and your eligibility for other health insurance.
Start with our subsidy calculator to estimate your savings. Then use this guide to understand the eligibility rules and how your subsidy works.
This article explains the premium tax credits (premium subsidies) created by the Affordable Care Act (aka Obamacare). These income-based subsidies are available through the health insurance Marketplace/exchange in every state.
Subsidy amounts differ from one person to another, and they’re adjusted each year to keep pace with premiums. But as we’ll discuss below, subsidies don’t cover as much of enrollees’ total premiums starting in 2026 as they did for the previous five years.
Recommended: Does the IRS change how much I’ll have to pay for my health insurance each year?
Do I qualify for ACA premium subsidies?
Eligibility for premium tax credits – commonly referred to as premium subsidies – is based on household income (ACA-specific MAGI). To qualify for a subsidy, a household must have an income of at least 100% of the federal poverty level (or above 138% of the federal poverty level in states that have expanded Medicaid, and above 200% of the federal poverty level in states that have a Basic Health Program). The maximum household income for these federal subsidies is400% of the federal poverty level.
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In addition to income, other factors determine eligibility for premium subsidies:1
- You can’t be eligible for Medicaid, CHIP, or premium-free Medicare Part A.
- You can’t be eligible for employer-sponsored coverage that’s considered affordable and that provides minimum value. Learn more about how this works.
- You must enroll in coverage through the Marketplace/exchange in your state, as subsidies are not available outside the Marketplace (off-exchange). To use the Marketplace, you must be lawfully present in the United States, not enrolled in Medicare, and not incarcerated.2
- If you’re married, you must file a joint tax return with your spouse.
- Starting with the 2027 plan year, subsidies are only available to people who aren't U.S. citizens if they're lawful permanent residents (LPRs, also known as green card holders), COFA Migrants, or Cuban-Haitian Entrants (CHEs). Other categories of lawfully present immigrants will no longer qualify for subsidies.3
Are health insurance subsidies available to fewer consumers because the subsidy enhancements expired?
From 2021 through 2025, the American Rescue Plan (ARP) and the Inflation Reduction Act (IRA) provided subsidy enhancements to the ACA. These enhancements – which increased the size of premium tax credits and eliminated the upper income limit for subsidy eligibility – expired at the end of 2025.
As a result, some consumers qualify for less financial help, and people with household income above 400% of the federal poverty level no longer qualify for federal premium subsidies. Learn more about how the expiration affects subsidy eligibility and amounts.
Is the subsidy cliff still affecting eligibility?
Yes. The subsidy cliff returned in 2026 after the enhanced premium subsidies expired. If your household income exceeds 400% of the federal poverty level, you cannot qualify for federal premium subsidies – regardless of how much your health insurance costs.
Some states offer their own financial assistance with different income limits.
Learn more about the subsidy cliff and state-funded subsidies.
How many consumers receive premium subsidies?
More than 23.1 million people enrolled in Marketplace plans during the open enrollment period for 2026 coverage, and more than 20 million of them – about 87% – were receiving premium subsidies.4
This was down from about 92% of enrollees receiving subsidies in 2025, and the total number of enrollees also declined in 2026.5
For 2026 enrollees who still qualified for subsidies, the subsidies continued to cover the bulk of their premiums and average subsidies increased in 2026. But average subsidies increased by a more significant margin, meaning that average net (after-subsidy) premiums grew significantly:
- The average full-price premium in 2026 was $741/month, and the average premium subsidy was $650/month. The overall average after-subsidy premium (including people who didn't get a subsidy) was $178/month.4
- The average full-price premium in 2025 was $619/month, and the average premium subsidy was $550/month. The overall average after-subsidy premium was just $113/month.6
In short, the subsidies are a significant part of the "affordable" portion of the Affordable Care Act, and that's still true even after the subsidy enhancements expired at the end of 2025. But many people may still be wondering, “Am I eligible to receive a premium subsidy – and if so, what should I expect?”
Can I get ACA subsidies if my employer offers health benefits?
An offer of job-based health insurance doesn’t automatically rule out a Marketplace premium subsidy. You may qualify if your employer’s plan doesn’t meet federal standards for affordability or minimum value, and you meet the other subsidy eligibility requirements.
If your employer offers coverage that’s considered affordable and provides minimum value, you’re not eligible to receive a subsidy in the exchange.1 The family glitch previously caused some families to be ineligible for subsidies due to the way affordability of employer-sponsored health plans was calculated, but the IRS fixed the glitch in the fall of 2022, meaning that some families became newly eligible for Marketplace subsidies in 2023.
If your employer offers affordable coverage that provides minimum value, you are already receiving a “subsidy” from your employer in the form of pre-tax health insurance benefits and an employer contribution to your premiums. The exchanges are designed to offer subsidized health insurance benefits to people who are self-employed, retired before age 65, or working for a company that does not offer affordable health benefits.
Note that some employers offer coverage that is either not affordable or does not provide minimum value (by doing this, large employers can avoid the potentially larger penalty they would pay if they didn’t offer coverage at all). Large employers are subject to a penalty if they offer these plans and their employees opt for a subsidized plan in the exchange/Marketplace instead. If your employer offers a plan that doesn’t meet the affordability rules and/or the minimum value rules, you do have access to premium subsidies in the exchange if you’re otherwise eligible based on your income, immigration status, etc.1
Are people with Medicaid or CHIP eligible for premium subsidies?
People who qualify for Medicaid or CHIP are not eligible for ACA premium subsidies.1 And, if your kids are eligible for Medicaid or CHIP, they aren’t eligible for premium subsidies. In that case, the subsidy amount you’ll see when you enroll is just for the adults in your household, as the kids will be on Medicaid or CHIP instead.
Am I too old for a premium subsidy?
There’s no upper age limit for subsidy eligibility. But eligibility for premium-free Medicare Part A – usually at age 65 – makes you ineligible for Marketplace subsidies.1
If you don’t qualify for premium-free Part A and aren’t enrolled in Medicare, you may still qualify for Marketplace subsidies if you meet the other eligibility requirements. (Note: If you delay your Medicare enrollment in that case in order to continue to receive a premium subsidy instead of paying for Medicare Part A, you’ll owe a late enrollment penalty if you ever decide in the future to enroll in Medicare instead.)7
Is my income too low for me to be subsidy-eligible?
Your household income must be at least 100% of the federal poverty level to qualify for premium subsidies.1 And in most states, your income must actually be above 138% of the federal poverty level to qualify for Marketplace subsidies, since households with income below that level will qualify for Medicaid instead.
But in the ten states that haven’t expanded Medicaid, subsidy eligibility starts at 100% of the federal poverty level. And depending on their circumstances, adults with income below the poverty level can be ineligible for Medicaid while also being ineligible for Marketplace subsidies.
Learn more about the Medicaid coverage gap and who it affects.
Can I get a subsidy if I lose my Medicaid because of Medicaid work requirements?
No, you will not qualify for a subsidy based on losing your Medicaid for failure to comply with the work requirement if you’re part of the Medicaid expansion population.
To be clear, if your income increases so that it's above 138% of the federal poverty level (or at least 100% of FPL in Georgia or Wisconsin), you'll qualify for subsidies based on your new income. But assuming your income remains in the Medicaid-eligible range, the Marketplace will still consider you to be eligible for Medicaid (and thus ineligible for subsidies) if you lose your Medicaid due to failure to comply with the work requirement.
Learn more about the Medicaid work requirement.
Do I have to be a U.S. citizen to get a premium subsidy?
No, you don’t have to be a U.S. citizen to get premium subsidies, although the rules are changing as of 2027 in terms of what immigration status will make a person eligible for subsidies.
- Starting with the 2027 plan year, someone who isn't a U.S. citizen will only qualify for subsidies if they're a lawful permanent resident (LPR, or green card holder), a COFA Migrant, or a Cuban-Haitian Entrant (CHE). There's a long list of other immigration statuses that were subsidy-eligible before 2027, but that no longer qualify for subsidies in 2027 or future years.
- Federal premium subsidies have never been available to people who aren’t in the U.S. legally, although Washington and Colorado use state funds to provide premium subsidies to some undocumented immigrants.
- From 2014 through 2025, ACA premium subsidies were available to immigrants with income below the poverty level if they had been lawfully present in the U.S. for less than five years9 (during the waiting period before they become eligible for Medicaid), but that ended as of 2026.10
- DACA recipients were briefly eligible for Marketplace plans and subsidies from November 2024 until August 2025, but that is no longer the case.
Eligibility for ACA subsidies is based on the cost of Silver plans
Subsidies are tied to the cost of the second-least expensive Silver plan in your area – referred to as the benchmark plan.
The cost of the benchmark plan is specific to each person’s circumstances. It depends on your zip code and the age of any family members who are applying for coverage, so the cost of the benchmark for your household will not be the same as the cost of the benchmark for another household. This is generally true even if you live next door to each other, since the ages of each household’s members are likely to be different.
As the cost of the benchmark plan changes each year, the size of the premium subsidy changes too, to keep pace with the benchmark plan cost. But as described above, the expiration of federal subsidy enhancements at the end of 2025 meant that subsidies began covering a smaller share of premium costs starting in 2026, relative to 2025.
Learn more about the benchmark plan and how its cost dictates subsidy amounts.
The Marketplace will automatically calculate your subsidy, but many enrollees are curious about how the subsidy amount is determined, so here are the details:
How to estimate your ACA subsidy in five easy steps
The size of your subsidy is based on how your household’s income (an ACA-specific calculation of MAGI) compares with the prior year’s federal poverty level, and the price of the benchmark Silver plan in your region for the year your coverage will be in force.
To calculate the size of your subsidy for 2027:
1) Determine your household’s ACA-specific Modified Adjusted Gross Income. If you need help with this, you can use our calculator. (This calculator is for educational and illustrative purposes only and should not be construed as financial or tax advice. It uses the income and other information you provide. We included various categories of income and expenses that the Marketplace considers. You should contact a tax advisor or other professional about any specific requirements or concerns.)
Calculate Yearly Income
Use this to calculate your household's modified adjusted gross income. Consider including your income, your spouse’s income, and that of any tax dependents, all of which are usually counted by the Marketplace. After that, provide information about expenses that may be deducted.This calculator is for educational and illustrative purposes only and should not be construed as financial or tax advice. It uses the income and other information you provide. We included categories of income and expenses that the Marketplace commonly (but not always) uses. You should contact a tax advisor or other professional about any specific requirements or concerns.
Click calculate to see updated yearly income
2) Use the table below to find out where your income falls in relation to the federal poverty level. For 2027 coverage, you’ll be looking at your projected 2027 income, but you’ll be comparing it to the 2026 federal poverty numbers which are shown in the table below11 (the numbers are higher in Alaska and Hawaii).
In most states, if your income doesn’t exceed 138% of the poverty level, you’ll be eligible for Medicaid. If it’s above that amount (or at least 100% of FPL in a state that hasn’t expanded Medicaid), your subsidy eligibility will depend on your income as a percentage of the poverty level, as described in the next step.
| 2026 Federal Poverty Guidelines | |||
|---|---|---|---|
| Persons in family / household | 48 contiguous states and DC | Alaska | Hawaii |
| 1 | $15,960 | $19,950 | $18,360 |
| 2 | $21,640 | $27,050 | $24,890 |
| 3 | $27,320 | $34,150 | $31,420 |
| 4 | $33,000 | $41,250 | $37,950 |
| 5 | $38,680 | $48,350 | $44,480 |
| 6 | $44,360 | $55,450 | $51,010 |
| 7 | $50,040 | $62,550 | $57,540 |
| 8 | $55,720 | $69,650 | $64,070 |
| 9+ | If more than 8 in household / family, add $5,680 per additional person. | If more than 8 in household / family, add $7,100 per additional person. | If more than 8 in household / family, add $6,530 per additional person. |
3) Find out how much the Affordable Care Act expects you to contribute to the cost of your insurance (for the benchmark Silver plan) by consulting the following table. The expected contribution is adjusted slightly each year. The percentages listed below are for 2027, and are a slight increase from 2026.12
| If you earn | Your expected contribution is |
|---|---|
| Less than 133% of FPL | 2.15% of your income |
| 133%-150% of FPL | 3.23%-4.3% of your income |
| 150%-200% of FPL | 4.3%-6.78% of your income |
| 200%-250% of FPL | 6.78%-8.66% of your income |
| 250%-300% of FPL | 8.66%-10.22% of your income |
| 300%-400% of FPL | 10.22% of your income |
| 400% of FPL or higher | Full cost (no federal subsidies available) |
The subsidy will make up the difference between the amount an individual is expected to contribute (based on income) and the actual cost of the area’s second-lowest-cost Silver plan.
4) Determine how much a benchmark Silver plan costs in the area where you live. You can scroll through the available quotes in your state’s exchange and see what the second-lowest-cost Silver plan’s premium would be for you and your family, or you can call the exchange. In most states, these numbers start to become available by mid-to-late October, in advance of the November 1 start of open enrollment.
It’s important to note that the benchmark plan changes from one year to another: Carrier A might have the second-lowest-cost Silver plan one year, but due to premium fluctuations, Carrier B might take over that spot the following year. Here’s an example of how this works.
5) Subtract the amount that you are expected to contribute (based on your income) from the cost of your benchmark Silver plan. For instance, let’s say your Silver plan costs $6,000 a year, and you are expected to contribute $1,000. You will receive a subsidy of $5,000 for the year.
Sample subsidy calculations for 2027
Let’s work through a specific example for 2027, so that you can see exactly how it works. (We’re rounding numbers here to make it easy to follow; the exact dollar amounts would be slightly different.)
Rick is 27 and lives in Birmingham, Alabama (zip code 35213). According to HealthCare.gov, the benchmark plan for Rick has a full-price premium of about $604 per month in 2027.13
If Rick earns $31,920 (that’s 200% of FPL, based on the 2026 FPL numbers) he would be expected to kick in 6.78% of his income, or about $2,164 in 2027, towards the cost of the benchmark plan (0.0678 x $31,920 = roughly $2,164), with a subsidy covering the rest of the premium. That amounts to about $180 per month in premiums that Rick would have to pay himself if he buys the benchmark plan. A subsidy of about $424/month will cover the rest of the cost.
(Note: If the ARP subsidy enhancements had been extended, Rick would only have been expected to pay 2% of his income for the benchmark plan, instead of 6.78%. He would only have had to pay about $638 in 2027, or about $53/month, for the benchmark plan if the subsidy enhancements had been extended.)
To calculate his subsidy, Rick just needs to subtract $2,164 (the amount he kicks in over the course of 2027) from $7,248 (the total cost of the benchmark plan over the course of 2027). His subsidy will be about $5,088 for the year. That means the exchange will send about $424/month to his insurer, and Rick will have to pay the other $180/month (again, these amounts are rounded and thus not exact).
Of course, that’s assuming he picks the benchmark plan; if he buys a less-expensive plan, he’ll pay less, and if he buys a more expensive plan, he’ll pay more. The $424/month subsidy will stay the same regardless of what plan he buys – unless he enrolls in the one available plan that has a full-price premium of less than $424/month. In that case, the subsidy will cover the full price and his monthly premium will be $0, but he won’t be able to claim the excess subsidy.
(Note that you can also calculate your expected contribution percentage if your income is somewhere in the middle of one of the ranges shown in the contribution table above. Here’s how it works.)
Rick’s 27-year-old cousin Alice, earns the same amount as Rick, but lives in Wilmington, Delaware (zip code 19801), where the pre-subsidy cost of the benchmark plan is higher. After her subsidy, she’ll pay the same amount as Rick for the benchmark plan (because they earn the same income), but her subsidy will need to be larger to get the after-subsidy amount down to the same $180/month. The benchmark plan for Alice has a full-price premium of $718 per month in 2027, according to HealthCare.gov’s plan comparison tool.14
If Alice also earns $31,920 in 2027 (200% of the 2026 FPL) the government would expect her to spend 6.78% of her income on the benchmark plan, just like her cousin in Alabama. (Remember, the expected contribution is tied to income (MAGI), not the underlying cost of the plan.) So she, too, would have to pay about $2,164 of her own money (about $180/month) to buy the benchmark plan in her area. But because the full price of the benchmark plan for Alice would be about $8,616 over the course of 2026, her subsidy will need to be about $6,456 (roughly $538/month).
Since Rick and Alice earn the same amount, they pay the same in after-subsidy costs for the benchmark plan: Around $2,164 for year in 2027 ($180/month), which is 6.78% of their incomes. This is based on their MAGI – not their age, health status, or location. But Alice’s subsidy has to be larger than Rick’s, because the unsubsidized cost of her plan is higher, due to her location.
If Rick and Alice were younger, the Silver plan would be less expensive and their subsidies would be smaller. If they were older, the Silver plan would be more expensive, and their subsidies would be higher.15
The idea behind the subsidies is to level the playing field and bring average premiums to a middle ground for everyone who has the same general level of income (MAGI). So at the same income level, an older person will receive a higher subsidy than a younger person, but they’ll both ultimately pay the same price for the benchmark plan.
Footnotes
- “The Premium Tax Credit – The basics” Internal Revenue Service. Accessed Oct. 12, 2026 ⤶ ⤶ ⤶ ⤶ ⤶ ⤶
- “Are you eligible to use the Marketplace?” HealthCare.gov. Accessed Jan. 5, 2026 ⤶
- “New Immigration-Related Restrictions for Medicaid, CHIP, Medicare, and Marketplace” Center on Budget and Policy Priorities. June 2026 ⤶
- “2026 Marketplace Open Enrollment Period Public Use Files” CMS.gov, Accessed Oct. 12, 2026 ⤶ ⤶
- “Health Insurance Exchanges 2025 Open Enrollment Report” Centers for Medicare & Medicaid Services. Accessed Oct. 12, 2026 ⤶
- “2025 Marketplace Open Enrollment Period Public Use Files” CMS.gov, Accessed July 15, 2025 ⤶
- “Avoid late enrollment penalties” Medicare.gov. Accessed Nov. 11, 2026 ⤶
- “Medicare and the Marketplace” Centers for Medicare & Medicaid Services. Accessed Oct. 12, 2026 ⤶
- “ACA Section 1401(c)(1)(B) — page 113 of the text of the ACA” Office of the Legislative Counsel. Enacted Mar. 23, 2010 ⤶
- “HR.1 - One Big Beautiful Bill Act” (Section 71302). Congress.gov. Enacted July 4, 2025 ⤶
- “2026 Poverty Guidelines” U.S. Department of Health & Human Services. Accessed Oct. 12, 2026 ⤶
- “Revenue Procedure 2026-26” Internal Revenue Service. Accessed Oct. 12, 2026 ⤶
- “See Plans & Prices” (35213 zip code) HealthCare.gov. Accessed Nov. 3, 2026 ⤶
- “See Plans & Prices” (19801 zip code) HealthCare.gov. Accessed Jan. 6, 2026 ⤶
- “How insurance companies set health premiums” HealthCare.gov. Accessed Nov. 3, 2026 ⤶
