The 2027 subsidy cliff by household size
Premium tax credits for 2027 coverage go to households earning 100% to 400% of the federal poverty level. Above 400%, the credit isn't reduced. It is gone. The Marketplace measures 2027 eligibility against the prior year's poverty guidelines, so these are the lines for North Carolina and the other 47 contiguous states and DC:
See the numbers
| Item | Value | Status |
|---|---|---|
| 1 person | $63,840 | final |
| 2 people | $86,560 | final |
| 3 people | $109,280 | final |
| 4 people | $132,000 | final |
| 5 people | $154,720 | final |
The 400% of poverty income limit rises with household size, from $63,840 for one person to $154,720 for five. Household income above the line for your size gets no premium tax credit for 2027 coverage.
400% of the federal poverty level for 2027 coverage
| Household size | Income limit for any subsidy |
|---|---|
| 1 person | $63,840 |
| 2 people | $86,560 |
| 3 people | $109,280 |
| 4 people | $132,000 |
| 5 people | $154,720 |
Why the cliff is back
From 2021 through 2025, enhanced subsidies removed the upper income limit. Those enhanced subsidies expired December 31, 2025, and under current law they do not return for 2027. That means households who got help two years ago may now be over the line. If you read an article that says there is no income limit, check its date. For 2027 coverage it is out of date. See will the enhanced subsidies come back.
What counts as income, and why it matters near the line
The Marketplace uses your household's modified adjusted gross income (MAGI) for 2027 — an estimate you give when you apply, settled when you file your 2027 taxes.
- Count everyone you'll claim on your tax return, not just the people who need coverage.
- Self-employed? Use net business income after expenses, not gross sales.
- Retirement contributions can lower MAGI. Eligible deductible or pre-tax contributions may reduce MAGI, subject to the account and tax rules that apply to you. Confirm eligibility and deductibility with your tax preparer.
An example: a family of four expecting $131,000 is under the $132,000 income ceiling and may qualify for help if it meets the other eligibility requirements. The same family at $133,000 does not. If your estimate lands that close, talk to your tax preparer before you enroll.
If you're over the line
- Compare full-price Marketplace plans anyway. Bronze and catastrophic-eligible plans can still be the safest choice.
- Look at plans sold outside the Marketplace. Same rules on pre-existing conditions, sometimes different networks.
- Ask about alternatives carefully. Some lower-cost options are not major medical insurance. See fixed-benefit vs. major medical plans.
Deadlines that apply
Open Enrollment for 2027 starts November 1, 2026. Pick a plan by December 15, 2026 for coverage that starts January 1. See when Open Enrollment for 2027 runs.
Being below the income ceiling is not an automatic subsidy approval
The income limit is one part of premium tax credit eligibility. The Marketplace also reviews household and coverage circumstances, including access to other qualifying insurance. Being below a poverty-level threshold does not by itself establish that a particular household will receive a credit or how large it will be. Use a completed application and eligibility notice for that determination.
Build an income estimate you can explain
- Identify the tax household. Confirm who will file and who will be claimed as a dependent. Household size is not simply the number of people seeking coverage.
- Gather the income sources. Include relevant wages, net self-employment income, retirement distributions and other income according to Marketplace rules.
- Estimate the full coverage year. Consider income already expected from jobs, business activity or planned withdrawals. A single low-income month does not establish the yearly amount.
- Review uncertainty. If business results, bonuses or retirement transactions could change the total, discuss the estimate with a qualified tax professional.
- Update when facts change. Keep a record of revised estimates and the resulting Marketplace eligibility notices.
What to do when your estimate is close to the line
Compare the policy at both the estimated subsidized premium and the full premium. That shows how much your household budget depends on receiving financial help. Ask your tax preparer whether any proposed retirement or HSA contribution is actually permitted and deductible for you. Contributions do not automatically reduce Marketplace income merely because money is moved into an account.
Do not deliberately understate income to obtain a lower payment. The advance credit is based on an estimate and reconciled on the tax return. If you prefer to limit the risk of an unexpected tax balance, ask about using less than the full advance credit during the year and how that affects your monthly budget.
Compare coverage even if you receive no tax credit
Start with plans that cover the care you need. Compare networks, prescriptions, deductibles and the maximum exposure for covered care. An off-Marketplace offer should identify whether it is ACA-compliant major medical coverage or a different product with exclusions or limited benefits. A low advertised payment is not a complete comparison.
We can explain plan costs and help review the insurance application. Your tax professional handles personalized tax planning, and the Marketplace determines eligibility. Bring both the income estimate and any employer offer so the comparison uses the full picture.
Income reference: HealthCare.gov — household income and MAGI.
Quick questions
Is the 2027 subsidy cliff based on 2026 or 2027 poverty guidelines?
2027 coverage uses the prior year's guidelines, so the 2026 poverty table sets the 2027 cliff: $63,840 for one person.
What if my income ends up over the cliff after I got a subsidy?
You may have to repay the advance credit when you file taxes. Update your income on HealthCare.gov as soon as you know it has changed.
Does the cliff apply in North Carolina?
Yes. North Carolina uses HealthCare.gov, so the federal limits apply here.
How The Jordan Insurance Agency helps
The Jordan Insurance Agency is an independent agency based in Charlotte, North Carolina. We compare plans across the carriers available in your county, check your doctors and prescriptions, and show you what a plan costs in practice.
There is no fee for our help. Carriers pay the agent, so your premium is the same whether you enroll with us or on your own.
Next steps: read how ACA subsidies work and see options if you can't afford health insurance.
Subsidy limits checked October 16, 2026. Sources: HHS ASPE — 2026 federal poverty guidelines, HealthCare.gov — Dates and deadlines, healthinsurance.org — 2027 subsidy eligibility, Peterson-KFF — 2027 Marketplace premiums.
.svg)
.svg)
