Enhanced Premium Tax Credits Expired: What Changes for 2027

The enhanced premium tax credits expired at the end of 2025, and 2027 Marketplace coverage is being sold under the original ACA subsidy rules. That means the income cap at 400% of the federal poverty level is back, the applicable percentages are higher, and households above that cap get no premium help at all.

This is not a projection or a contested reading. The Congressional Research Service states that the enhanced provisions expired at the end of 2025, and the IRS has published the 2027 applicable percentage table with the 400% ceiling restored. What follows is what changed, who it hits hardest, and what to check before you pick a 2027 plan.

What the enhanced credit was

The premium tax credit has existed since 2014. It is a refundable credit that lowers what you pay for a Marketplace plan, and it is calculated from your household income and the cost of a benchmark silver plan in your area.

The American Rescue Plan Act of 2021 temporarily changed two things about it for tax years 2021 and 2022. As CRS describes it, the law eliminated the maximum income limit of 400% of the federal poverty level and reduced applicable percentages while eliminating indexing. The result was that more households became eligible and every eligible household received a larger credit.

Those changes were extended for three more years, 2023 through 2025. CRS records the sunset: the sunset date established for the enhanced provision is January 1, 2026.

One point in that report is worth keeping separate from the rest. The credit itself did not expire. CRS states plainly that the PTC will continue after 2025, and there is no sunset provision applicable to authorization for the credit itself. Only the temporary expansion ended. A reader who hears "the subsidies expired" may conclude that no help exists, which is wrong for anyone under the income cap.

What changed for 2026 and carries into 2027

Two mechanics reverted at once, and both raise what a household pays.

The first is the income ceiling. Eligibility is again limited to households at or above 100% and not more than 400% of the federal poverty level. One dollar over the line produces no credit at all, which is why this is often called a cliff. The Marketplace glossary now states that income between 100% and 400% of the federal poverty level qualifies for the credit in all states.

The second is the applicable percentage, the share of your income you are expected to contribute toward the benchmark plan. Higher percentages mean a smaller credit at the same income. The IRS publishes these annually. For 2026, Rev. Proc. 2025-25 sets the table with a top band of 9.96% for households at 300% to 400% of the federal poverty level. For 2027, Rev. Proc. 2026-26 raises that top band to 10.22%.

CRS gives the clearest illustration of the size of the change: a household at 200% of the federal poverty level was required to contribute 2% of its income toward the benchmark plan premium in 2025, and 6.6% in 2026. The premium did not have to move for the contribution to more than triple.

Who is most affected

Three groups absorb most of the change, and they are affected for different reasons.

Households above 400% of the federal poverty level. These households lost eligibility entirely. KFF notes that people above that line will be particularly hard hit because they no longer qualify for premium tax credits and must pay the full cost of coverage. For a household that had been receiving a credit, the change is from a subsidized premium to the full premium in one step.

Households just under the cap. These households keep eligibility but face a higher applicable percentage, so their contribution rises even though their income did not. The cliff also becomes sharper in practice, because being slightly over the line now costs the entire credit rather than a partial reduction.

Households between 100% and 150% of the federal poverty level. Under the enhanced structure, the reduced applicable percentages allowed these households to receive full subsidies that could bring their premium contribution to zero. CRS describes that outcome directly: the reduction in applicable percentages allowed households with incomes between 100% and 150% of the federal poverty level to receive full subsidies, reducing consumers' premium contributions to zero dollars. That structure is gone.

The aggregate effect shows up in enrollment. KFF reports that effectuated Marketplace enrollment was down 12%, or 2.6 million people, from the previous year to 19.2 million by February 2026. That is a population-level figure, not a prediction about any household.

What it does to premiums, separately from the credit

It is worth separating two things that both raise what you pay: the smaller credit, and the premium itself.

KFF reports that the average increase in finalized benchmark silver premiums for 2027 is 13%, following a 26% rise from 2025 to 2026. It also notes that insurers cited the expiration of the enhanced credits and the resulting risk pool changes as factors, estimating those risk pool changes added about four percentage points on average in 2026 with a similar effect expected in 2027.

So a household can face both a higher benchmark premium and a smaller share of it covered. The two effects compound, and neither is visible in a single quoted premium.

What did not change

Several protections remain and are worth confirming rather than assuming away.

Cost-sharing reductions still exist, but only with a silver plan. The Marketplace states that if you qualify for cost-sharing reductions, you must enroll in a Silver plan to get them, and that qualifying also lowers your out-of-pocket maximum. A household that drops from silver to bronze to save premium may be giving up more than it saves.

The credit still has to be reconciled. If you take advance payments and your actual income differs from your estimate, the difference is settled on your return. KFF warns that limits that previously capped how much some enrollees had to repay in excess premium tax credits were eliminated beginning with the 2026 tax year, and that the first filings under the new rules will not happen until early 2027. That makes income estimation more consequential than it used to be, not less.

State programs are also a live variable. KFF reports that some state-based Marketplaces are using state-funded subsidies to offset the expiration, with several continuing or expanding assistance in 2027. Whether one applies to you depends entirely on your state, and none of the seven states NavaQuote is licensed in was identified in that reporting as running a backfill program. Treat this as a question to check rather than an assumption in either direction.

What to check for plan year 2027

Open enrollment runs from November 1, 2026 through January 15, 2027 on the federal Marketplace. HealthCare.gov lists the December 15 deadline to enroll for coverage starting January 1, with enrollment through January 15 producing a February 1 start. KFF confirms the 2027 open enrollment period starts November 1, 2026 in most states. State-based Marketplaces can set different end dates, so confirm your own state's calendar rather than relying on the federal one.

Then work through these:

• Estimate income carefully and revisit it. With the 400% cliff restored and repayment limits removed, an underestimate is more expensive than it used to be. If your income lands near a threshold, update your estimate during the year rather than waiting for your return.
• Check whether you are near 400% of the federal poverty level. The relevant guidelines are the ones in effect at the start of the enrollment period. The HHS poverty guidelines page publishes the current figures by household size. Being slightly over the line means no credit.
• Compare silver and bronze on total cost, not premium. Cost-sharing reductions apply only to silver, so a lower premium can come with a much higher deductible and out-of-pocket maximum.
• Ask whether a state-funded program applies. Only some states backfill. If you live in one that does, the federal change may be partly offset.
• Check whether you have another coverage offer. An affordable offer of job-based coverage that meets the minimum value standard generally ends premium tax credit eligibility, and that test did not change.
• Do not skip the reconciliation. File and reconcile even in a year when you would rather not, because failing to do so can affect future advance payments.

If you are pricing 2027 coverage and want to work through the credit alongside the plan choice, ask NavaQuote about health coverage options. Bring your expected household income, your household size, your current plan, and any state program you think may apply. Our off-exchange ACA plans guide covers the case where no credit applies and a plan bought outside the Marketplace may fit better, and our self-employed health insurance guide covers the income-estimation problem when your earnings move around.