As we approach 2026, many Americans are wondering: Is the Affordable Care Act (ACA) going away? With political debates, expiring provisions, and confusing headlines, it’s easy to feel uncertain about the future of healthcare coverage. The short answer is: No, the ACA is not going away entirely. However, significant changes are on the horizon—especially regarding subsidies—that could dramatically impact what you pay for health insurance.

In this guide, we’ll break down what’s staying, what’s changing, and how to navigate the system to avoid overpaying. We’ll also dive into the feared “subsidy cliff,” explain eligibility for individuals and families, and provide real-life examples of subsidy amounts at different income levels.

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What Is the ACA & What’s NOT Going Away?

The Affordable Care Act (ACA), also known as Obamacare, remains the law of the land. Its core provisions are intact, including:

• No medical underwriting – You cannot be denied coverage or charged more based on pre-existing conditions.
• Essential Health Benefits – All plans must cover 10 essential benefit categories, from emergency services to prescription drugs.
• Marketplace structure – Health insurance exchanges (like Healthcare.gov) where individuals and families can compare and purchase plans.
• Premium Tax Credits (subsidies) – Financial assistance based on income to help lower monthly premiums.

What Is Changing? The End of Enhanced Subsidies

The current Administration has not passed legislation to make permanent the enhanced premium tax credits that were introduced under the American Rescue Plan Act (ARPA) and extended by the Inflation Reduction Act (IRA). These enhancements temporarily:

• Increased the amount of subsidies available.
• Eliminated the “subsidy cliff” for those earning over 400% of the Federal Poverty Level (FPL).

Unless Congress acts, these enhanced subsidies are set to expire at the end of 2025. This means that starting in 2026:

• Subsidy amounts will decrease.
• The subsidy cliff will return.

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What Is the “Subsidy Cliff”?

The subsidy cliff is a hard income cutoff for premium tax credits. If your Modified Adjusted Gross Income (MAGI) exceeds 400% of the Federal Poverty Level, you lose all subsidies and must pay full price for your marketplace plan.

For 2026 (using projected FPL guidelines):

• For an individual: ~$54,360
• For a family of 3: ~$91,920
• For a family of 4: ~$111,000

Example of the cliff effect: A married couple with a MAGI of $83,999 might pay ~$490/month for a Silver plan. If their MAGI is $85,000, they could pay over $2,300/month—simply because of $1 in extra income.

This cliff makes income planning essential, especially for early retirees, freelancers, and anyone with variable income.

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How to Qualify for ACA Premium Subsidies: Income-Based Eligibility

Eligibility for subsidies is based on your household income as a percentage of the Federal Poverty Level (FPL). You must also:

• Not be eligible for affordable coverage through an employer or government program (like Medicaid).
• Be a U.S. citizen or lawfully present.
• File taxes jointly if married.

Below are the 2026 projected FPL guidelines (based on 2025 estimates + inflation adjustment):

Household Size	100% FPL	200% FPL	395% FPL (Just under the cliff)
1	$13,590	$27,180	$53,680
3	$22,980	$45,960	$90,770
4	$27,750	$55,500	$109,612

Note: These are continental U.S. estimates. Alaska and Hawaii have higher FPLs.

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Real-Life Subsidy Examples for 2026

We’ve used the Kaiser Family Foundation Subsidy Calculator (updated with 2026 projections) to estimate subsidy amounts. These examples assume:

• A Silver plan is chosen (the benchmark for subsidy calculation).
• All individuals are non-smokers.
• They live in a state using Healthcare.gov.
• No other adjustments to MAGI.

Example 1: Individual

• Age: 40
• Income: 200% FPL → $27,180
• Estimated Premium for Benchmark Silver Plan: ~$450/month
• Subsidized Premium After Tax Credit: ~$75/month
• Savings: ~$375/month
• Income: 395% FPL → $53,680
• Estimated Premium for Benchmark Silver Plan: ~$520/month
• Subsidized Premium After Tax Credit: ~$120/month
• Savings: ~$400/month

Example 2: Family of 3

• Parents: 40 & 38, Child: 10
• Income: 200% FPL → $45,960
• Estimated Premium for Benchmark Silver Plan: ~$1,150/month
• Subsidized Premium After Tax Credit: ~$150/month
• Savings: ~$1,000/month
• Income: 395% FPL → $90,770
• Estimated Premium for Benchmark Silver Plan: ~$1,400/month
• Subsidized Premium After Tax Credit: ~$350/month
• Savings: ~$1,050/month

Example 3: Family of 4

• Parents: 42 & 40, Children: 12 & 8
• Income: 200% FPL → $55,500
• Estimated Premium for Benchmark Silver Plan: ~$1,400/month
• Subsidized Premium After Tax Credit: ~$200/month
• Savings: ~$1,200/month
• Income: 395% FPL → $109,612
• Estimated Premium for Benchmark Silver Plan: ~$1,700/month
• Subsidized Premium After Tax Credit: ~$500/month
• Savings: ~$1,200/month

Important: These are estimates. Your actual premium depends on your age, location, plan choice, and household composition.

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How to Keep Your Premiums Low in 2026: Smart MAGI Management

Since subsidies are based on Modified Adjusted Gross Income (MAGI), you can strategically manage your income to stay under the 400% FPL cliff. Here’s how:

What Counts Toward MAGI:

• Traditional IRA/401(k) withdrawals
• Taxable investment gains
• Social Security benefits (taxable portion)
• Interest, dividends, rental income
• W-2 or self-employment income

What Does NOT Count Toward MAGI:

• Roth IRA withdrawals (contributions only)
• Principal withdrawals from taxable brokerage accounts
• Cash from savings accounts
• Loans
• Gifts

Real-Life Strategy:

A retired couple needs $120,000/year to live. Instead of pulling it all from a Traditional IRA (which spikes MAGI), they could:

• Withdraw $40,000 from IRA (counts)
• Take $50,000 from brokerage principal (does not count)
• Withdraw $25,000 from Roth IRA (does not count)
• Harvest $5,000 in capital gains (counts)
• Total MAGI = $45,000 → well under the cliff, preserving subsidies.

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Key Takeaways & Next Steps

1. The ACA is here to stay, but enhanced subsidies expire in 2025 unless Congress acts.
2. The subsidy cliff returns in 2026—income planning is critical.
3. Eligibility is based on MAGI as % of FPL—not net worth or spending.
4. Manage your MAGI using Roth accounts, principal withdrawals, and strategic conversions.
5. Use tools like the KFF Calculator to estimate your 2026 premiums.

What You Should Do Now:

• If you’re shopping for 2026 plans: Open enrollment will run from Nov 1, 2025 to Jan 15, 2026 (dates may vary by state). Preview plans as early as possible.
• If you’re planning retirement or a career change: Start tax-diversifying your savings now. Build Roth and taxable buckets.
• If your income is near the cliff: Consult a financial advisor or tax professional to structure withdrawals and minimize MAGI.

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