Who will lose eligibility for enhanced ACA subsidies and what are the income thresholds?
Executive summary
Enhanced ACA premium tax credits enacted under the American Rescue Plan and extended by the Inflation Reduction Act are scheduled to expire after plan year 2025; without congressional action, households with incomes above 400% of the federal poverty level (FPL) would lose eligibility entirely and many lower‑ and middle‑income enrollees would see smaller subsidies and higher premiums [1] [2]. For 2026 coverage the pre‑ARP rules would return — reinstating the 400% FPL cutoff (e.g., roughly $62,600 for a single person or $128,600 for a family of four using commonly cited 400% FPL figures) — and reverting the applicable percentage schedule so households pay a larger share of income for benchmark plans [1] [2] [3].
1. Who stands to lose eligibility: the “above‑400%” cohort and middle‑income enrollees
If enhanced credits are allowed to sunset, people with incomes above 400% of FPL — described in analyses as those who became newly eligible under ARPA/IRA — would lose access to any premium tax credit and thus face full unsubsidized premiums [1] [2]. KFF’s analysis highlights that many of those who would lose all subsidies are age 50–64, often self‑employed or early retirees, and concentrated in rural areas; examples show steep monthly premium increases for affected households [2].
2. What “losing eligibility” means in dollars and rules
Under the temporary enhanced rules used through 2025 there is effectively no hard 400% FPL cliff; instead eligibility extended above 400% and the contribution cap was held at 8.5% of income for high earners. If enhancements expire, the law reverts to the ACA’s pre‑ARP structure: a 400% FPL income cap would again exclude higher earners from credits and the contribution formula would shift back to the pre‑2021 percentage schedule, increasing required household contributions across income bands [1] [4].
3. Income thresholds to watch: the 400% FPL line and common dollar equivalents
Multiple policy briefs and reporters cite the 400% FPL cutoff as the primary threshold that would be reinstated in 2026 absent congressional action [1] [2] [3]. Practical dollar examples used in coverage and calculators put 400% FPL for an individual at about $62,600 and for a family of four at about $128,600 [3] [2]. Exact dollar amounts will vary with the official HHS poverty guideline used for the coverage year.
4. Who would still get some help — and how the formula changes
Even if enhancements expire, most lower‑ and middle‑income Marketplace enrollees would still qualify for the original ACA premium tax credits (subject to the 100%–400% FPL window, and Medicaid rules in non‑expansion states), but their subsidies would be smaller because the required contribution rates across income brackets would revert to pre‑ARP levels — meaning higher net premiums for enrollees who remain eligible [1] [4] [5].
5. Policy context and competing perspectives
Analysts warn that letting enhanced credits lapse would raise premiums and likely reduce enrollment, shifting costs to providers and state systems [1]. Proponents of extension argue the enhancements expanded coverage and lowered premiums dramatically since 2021 [1] [6]. Some political proposals would extend or reshape subsidies with new caps (for example, proposals reported to cap eligibility at higher multiples of FPL like 700% in partisan plans), illustrating active disagreement over scope and cost [7].
6. Limitations and what the sources do not say
Available sources make clear the timing (end of 2025 sunset unless Congress acts) and the broad contours of who would lose eligibility (those >400% FPL), but they do not provide a definitive final 2026 federal poverty table in dollar amounts for every household size within the provided documents; precise 2026 dollar thresholds depend on HHS poverty guidelines and final legislative action [1] [3]. Sources do not state whether Congress will act or the final design of any extension; reporting describes proposals and analyses but no enacted 2026 law in these documents [7] [6].
7. Practical takeaway for consumers and policymakers
Consumers with incomes near or above the 400% FPL line should model their 2026 costs now and consider plan choices and tax‑year income projections because losing enhanced credits could produce large premium increases; policy watchers should expect debate on whether to renew, cap, or redesign the enhanced credits given tradeoffs between coverage stability and federal spending [2] [1] [6].