What were the income eligibility thresholds for ACA premium tax credits before 2020?
Executive summary
Before 2021 the Affordable Care Act’s premium tax credit was limited to households with incomes at or above 100% of the federal poverty level (FPL) and — under the statute as originally written and explained by federal agencies and analysts — no more than 400% of FPL for the household’s size (the 100–400% FPL band) [1][2][3]. Temporary changes beginning in 2021 under the American Rescue Plan removed the 400% cap for 2021–2022 and were later extended, but sources make clear the ACA’s original eligibility was the 100–400% FPL range [1][4][5].
1. The baseline rule: “100% to 400% of FPL” — what the law and agencies say
The Internal Revenue Service and HealthCare.gov state plainly that, under the ACA as originally implemented, households qualify for the premium tax credit if their household income is at least 100 percent and — for years other than 2021 and 2022 — no more than 400 percent of the federal poverty line for their family size [1][2]. Analyses and policy briefs written about the ACA’s design repeat that basic eligibility band of 100–400% FPL as the defining income range for premium tax credits [3][6].
2. How Medicaid expansion interacts with the 100% lower bound
The statutory “at least 100% FPL” floor had practical exceptions where Medicaid expansion applied. In states that expanded Medicaid, people with incomes under the state’s Medicaid threshold (commonly up to 138% FPL) are eligible for Medicaid rather than Marketplace subsidies, so marketplace premium-credit eligibility effectively begins at the income where Medicaid ends — not necessarily exactly 100% in practice [7]. Policy write‑ups note this interaction: eligibility for Marketplace subsidies begins above the state’s Medicaid eligibility level where expansion is in effect [7].
3. The 400% cap and its temporary suspension starting in 2021
Congress temporarily changed the upper limit through the American Rescue Plan Act (ARPA) of 2021 by eliminating the 400% FPL cutoff for tax years 2021 and 2022; IRS guidance and summaries explain that ARPA allowed households with incomes above 400% FPL to qualify for credits when benchmark premiums exceeded a capped share of income [1][4]. Congressional and CRS analyses frame ARPA’s move as a temporary expansion of eligibility and subsidy generosity [5].
4. Extensions, expirations and what “before 2020” means in practice
Reporters and analysts treat “before 2020” as the pre‑ARPA regime in which the statutory eligibility ceiling was 400% FPL. CRS and policy briefs describe a timeline: ACA enacted the 100–400% structure; ARPA suspended the cap for 2021–2022 and subsequent reconciliation acts extended enhancements through later years, creating a period when the 400% cap did not apply [5][6]. Thus, any question about thresholds “before 2020” should be answered with the 100–400% FPL rule as the operative requirement [1][2].
5. How the credit actually worked — sliding scale and benchmark plan
Eligibility wasn’t just a binary FPL band; the premium tax credit is a sliding-scale subsidy. The credit is based on household income relative to the cost of the benchmark (second‑lowest‑cost Silver) plan for the family’s area, with required household contribution percentages phased by income [8][9]. Sources caution that the precise subsidy amount and the “applicable percentage” tables change year to year through IRS indexing [10][8].
6. Caveats, exceptions and practical complexities reporters should flag
There are statutory and regulatory nuances: certain victims of domestic abuse or spousal abandonment may qualify under different filing rules, and states’ Medicaid decisions change where Marketplace eligibility actually begins [1][7]. Tax rules use a MAGI‑based income measure and annual indexing adjusts contribution percentages, so simple FPL cutoffs are a starting point rather than a full picture of eligibility mechanics [10][8].
7. Competing perspectives and why this matters now
Policy briefs and research emphasize that the 100–400% FPL rule was core to the ACA’s original design but that ARPA-era expansions materially changed who received subsidies and how generous they were [6][5]. Advocates and analysts who favor permanent expansions cite equity and affordability gains, while fiscal or legislative opponents cite cost and precedent — sources here document the prior statutory limit and the temporary policy deviations without taking a policy side [5][6].
Limitations: available sources do not mention specific numeric FPL income amounts (dollars) for years before 2020 in this dataset; for dollar thresholds by year one must consult published FPL tables and year‑specific IRS indexing documents (not found in current reporting) [10].