Over the tax-credit cliff: what a family of four pays in 2026
For five years the premium tax credit faded out gently as income rose. That ended on January 1, 2026. The enhanced credits created in 2021 expired at the end of 2025, and with them went the rule that capped anyone's benchmark premium at 8.5% of income no matter how much they earned. The original design is back: the credit is available up to 400% of the federal poverty level and not one dollar beyond it.
For a family of four in the 48 contiguous states that line sits at $128,600 of household income for 2026 coverage. At $128,600 the family is expected to contribute 9.96% of income, about $1,067 a month, toward the benchmark silver plan, and the credit covers the rest. At $128,601 the credit is zero. That is the cliff, and this guide is about what waits at the bottom of it.
What the credit was doing for you
Take Hillsborough County, Florida, in 2026. Two parents, 40 and 38, with two children. The cheapest Bronze plan for that household lists at $1,517 a month. At $85,000 of income the family is at 264% of the poverty level, is expected to contribute about $89 a month less than the benchmark costs, and receives a credit of roughly $1,428. Their cheapest Bronze plan costs them about $89.
Now give the same family a raise to $130,000. The credit disappears. The cheapest Bronze plan costs the full $1,517 a month, $18,204 a year, for a plan with a family deductible that can exceed $18,000 before it pays much of anything beyond preventive care. Silver and Gold cost more. Nothing about the plans changed; only the subsidy did.
| Household size | 100% of poverty level | 138% (Medicaid line in expansion states) | 400% (tax-credit limit) |
|---|---|---|---|
| 1 | $15,650 | $21,597 | $62,600 |
| 2 | $21,150 | $29,187 | $84,600 |
| 3 | $26,650 | $36,777 | $106,600 |
| 4 | $32,150 | $44,367 | $128,600 |
| 5 | $37,650 | $51,957 | $150,600 |
| 6 | $43,150 | $59,547 | $172,600 |
2025 HHS poverty guidelines for the 48 contiguous states and DC, which apply to 2026 coverage (Alaska and Hawaii are higher). Source: 90 FR 5917 and IRS Rev. Proc. 2025-25.
Full price in five big states
Here is the same family, priced at full Marketplace rates in the most populous county of five HealthCare.gov states, next to the private range our advisors typically quote for a healthy family of that shape.
| County | Cheapest Bronze | Cheapest Silver | Cheapest Gold | Private range |
|---|---|---|---|---|
| Miami-Dade County, FL | $1,592 | $2,163 | $1,980 | $517–$1,003 |
| Harris County, TX | $1,188 | $1,860 | $1,591 | $469–$944 |
| Wake County, NC | $1,414 | $1,853 | $1,945 | $422–$885 |
| Franklin County, OH | $1,260 | $1,674 | $1,706 | $416–$878 |
| Wayne County, MI | $1,106 | $1,610 | $1,724 | $465–$938 |
Two parents (40 and 38) and two children, full Marketplace price because the household is above the 400% line, in each state's most populous county; CMS plan-year 2026 file, snapshot August 4, 2026. Private range from the carrier rate tables our advisors quote from, both parents and both children included, after the advisors' usual adjustment; health questions apply.
The pattern is the same everywhere: once the credit is gone, the cheapest Marketplace Bronze plan for a family of four runs roughly $1,300 to $1,700 a month, and the private range starts at a fraction of that. The gap is not because private plans are magic. It is because they are underwritten and the Marketplace plan is not.
What you are actually buying on the private side
A private plan asks health questions. If the household is healthy, the carrier prices it as healthy, which is where the low end of those ranges comes from. The plans our advisors place are generally PPO-style, so the network is broader than the HMO that tends to be the cheapest Marketplace option, deductibles are typically lower, and you can apply in any month of the year rather than waiting for Open Enrollment.
The trade-offs are real and you should hear them before you get excited about the number:
- Underwriting can say no. A carrier can decline an application, charge more, or exclude a specific condition. A parent with a chronic condition or a child in ongoing treatment usually belongs on the Marketplace, where nothing can be excluded, even at full price.
- It is not ACA coverage. Private plans do not have to cover the ten essential health benefits the same way, and benefits vary by plan. An advisor should walk you through what is and is not covered before you switch, in plain words.
- Children are priced separately. The ranges above include both parents and both children, at about $80 a month per child, but every carrier handles kids a little differently.
Used correctly, private coverage is the answer for exactly the household this guide describes: healthy, over the line, and looking at a four-figure Marketplace premium for a high-deductible plan. Used carelessly, it is how someone with a condition ends up uninsured for it. The honest approach is to price both, which is what the tool on this site does for your household in about thirty seconds.
Legitimate ways to land under the line
The credit is based on modified adjusted gross income, not gross pay, and several ordinary decisions move that number. None of these are loopholes; they are how the rules work. Confirm any of them with your tax professional before you count on it.
- Pre-tax retirement contributions. Traditional 401(k), 403(b) and deductible IRA contributions reduce MAGI dollar for dollar. A family at $135,000 that contributes $8,000 to a 401(k) is at $127,000 and back inside the credit.
- HSA contributions. If you are on an HSA-eligible plan, contributions reduce MAGI as well, up to the annual limit.
- The self-employed health insurance deduction. Self-employed households deduct premiums above the line, which lowers MAGI, which raises the credit; the two interact and an accountant should run the circular calculation.
- Timing income. A bonus that lands in January instead of December, or a Roth conversion deferred a year, can keep a borderline household under the line for the year that matters.
What does not work: understating income on the application. The credit is reconciled on your tax return, and an income that comes in above 400% means paying every dollar of advance credit back.
A simple decision checklist
- Under $128,600 for four (or the equivalent for your household size) and likely to stay there: the Marketplace with your credit almost always wins. Take it.
- Near the line: run the retirement-contribution maths first. Getting under the line is usually worth thousands.
- Comfortably over the line and everyone is healthy: get a private quote before you pay full Marketplace price. The tool shows the range instantly and an advisor confirms it after a short health application.
- Over the line but someone has an ongoing condition: price the Marketplace at full price and treat that as the floor of what good coverage costs. It may still be the right call.
Questions people ask
Is the 400% cliff really back for 2026?
Yes. The enhanced premium tax credits from the American Rescue Plan and the Inflation Reduction Act applied to plan years 2021 through 2025 and expired on December 31, 2025. For 2026 the credit is available only up to 400% of the federal poverty level, per IRS Revenue Procedure 2025-25, unless Congress passes a new extension.
What is the 400% line for my household size?
For 2026 coverage it is $62,600 for one person, $84,600 for two, $106,600 for three and $128,600 for four in the 48 contiguous states and DC, rising by $22,000 for each additional person. Alaska and Hawaii use higher guidelines.
Can a private plan cover a pre-existing condition?
Sometimes, at a higher price, and sometimes not at all: the carrier decides after reviewing the application, and it can exclude the condition. Marketplace plans must cover it. That is why a household with ongoing care usually belongs on the Marketplace even when it costs more.
Sources: CMS QHP Landscape PY2026 Individual Medical file (data.healthcare.gov, snapshot August 4, 2026) for Marketplace premiums; HHS 2025 poverty guidelines (90 FR 5917) and IRS Rev. Proc. 2025-25 for the credit rules and limits; carrier rate tables used by our advisors for private ranges. Figures are monthly, non-tobacco, and can change before Open Enrollment.