Is the ACA gone or not?

[CarlP799778]

OK, I've been hearing for the last month that the ACA, and it's subsidies are gone. Finished. Kaputt. 

But, I have some co-workers that are still getting bills from Blue Shield that their premiums are still zero, but mine has gone up from zero in 2025 to $1280/month in 2026.

I contacted my insurance guy, and he said that the subsidies are not gone; they just reset the income cap down to $62,500/year. So, he said, if I can get my taxable income below that number ( through IRA, 401K, or HSA contributions ) I can still get the subsidy. 

Is this correct? He was able to tell me what I have to do, and changed my CoveredCA income down to get the subsidy. But I'm afraid that, if he's wrong, I can get hit with having to repay the years worth of insurance subsidies.

[TRL1111]

Now if we can just get Carl to come back , maybe we can help him avoid getting into real trouble down the road by botching his proposed MAGI manipulation.

I'm troubled by this:  "[Carl's broker told him], If I can get my taxable income down below $ 62,500 ( he actually put it in as $ 61,020, but close enough ) I would quality for a subsidy of $1870/month, so my premium goes down to zero."

I can't think of any scenario where this is true.

[WebWiseWoman]

There are some people who consider every cent (oh, wait, no more pennies) spent to care for others is stolen from them... guess who and why...

[TRL1111]

What came back is the subsidy cliff, where if you make even $1 over $62,600, you don't qualify for any subsidy at all.

And it's not just a matter of getting your income below $62,600 because the subsidy varies depending on your income.  A person with an income of $60,000 will get a significantly lower subsidy than a person with an income of $30,000.  

What income did your insurance guy put down for you, and did he tell you the amount of subsidy that would get you?

[CarlP799778]

With NO subsidy, my premium was going to go up to $1280/month. He said, If I can get my taxable income down below $ 62,500 ( he actually put it in as $ 61,020, but close enough ) I would quality for a subsidy of $1870/month, so my premium goes down to zero.

He also said that, since I paid the full $1280 for Jan and Feb, I would get it back as an overpayment with my refund next year. Of course, I have to be really careful to get it down below $62.5K, or I'm screwed next year.

[TRL1111]

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@CarlP799778 wrote:

With NO subsidy, my premium was going to go up to $1280/month. He said, If I can get my taxable income down below $ 62,500 ( he actually put it in as $ 61,020, but close enough ) I would quality for a subsidy of $1870/month, so my premium goes down to zero.

He also said that, since I paid the full $1280 for Jan and Feb, I would get it back as an overpayment with my refund next year. Of course, I have to be really careful to get it down below $62.5K, or I'm screwed next year.

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These numbers aren't making any sense to me.   $61,020 is the pretty much the highest income someone can have and still qualify for any subsidy at all, and at the top end of the scale the subsidy is usually fairly small.  A $1,870 subsidy by itself is astronomical, and even if it does exist, I'd be shocked beyond belief that it applies to someone at the top end of the subsidy-qualifying range.

But I'm flying kind of blind because there are so many variables.  I ran some numbers for a 64-year-old in Los Angeles, and they're nothing like what you're reporting.  It would really help if I knew your zip code and age.  If you prefer not to be specific, you could be off by a year or two on age, and you could use a zip code near you but not yours.  That's the only way to get accurate information.

I will say that you don't HAVE to have any subsidy applied against your premium.  It's called an advance tax credit--advance because you get it before you file your taxes (by applying it toward your premium every month).  But you can pay the full premium, and have your taxes reduced by the subsidy when you file your taxes.  You'll net the same amount either way--it's just a matter of whether you got the money monthly over the course of the year or in a lump sum at the end.

That's what your insurance guy is talking about for January and February, only it would be for the whole year.  

That's the safest thing to do, because if you somehow miss the mark on getting your MAGI low enough to qualify for a subsidy, you won't be in trouble for having entered the wrong income and taking money that you weren't entitled to every month.  

Also, you can run the numbers yourself at Covered California's website, or healthsherpa.com.  I found healthsherpa easier to use because you can easily change the income to see what effect it has on the subsidy--on Covered California's website, I was having to start over at the beginning every time I wanted to change the income.  But on the ones I did enter, the results on healthsherpa and Covered California were similar.

But I'd still like to be able to get some more specific data on your situation.

[CarlP799778]

The $1870 is off the CoveredCA letter I got. I thought it was high, too, but that's what CoveredCA says it is.

[TRL1111]

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@CarlP799778 wrote:

The $1870 is off the CoveredCA letter I got. I thought it was high, too, but that's what CoveredCA says it is.

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Can you check that letter again?  For the test person I used in my other post, even at an income of $22,000, the lowest income that qualifies for a subsidy, his subsidy is $975.  Plus, the subsidy goes down as income goes up.  So a subsidy of $1,870 seems crazy. 

At the income your insurance guy put in, $61,020, my test person would get a subsidy of $470.  The lowest price plan available to him has a premium of $411.23 ($881.49 minus $470.26 subsidy).  He's nowhere near getting a $0 premium plan.

[CarlP799778]

According to the CoveredCA quote site https://apply.coverhealthca.com/ , with an MAGI of $61,500 my subsidy is almost $1600/month.

[TRL1111]

What zip code are you in?  I used downtown Los Angeles for my test person.

[CarlP799778]

Lompoc, CA 93436

[GailL1]

Look at this specific CoveredCA site - yes, the state (CA) has something special going on - they seem to be funding more in subsidies.

CoveredCa.com - How Covered California Subsidies Work 

Now go down to the heading of

2026 Maximum Premium Contribution Table

[TRL1111]

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@GailL1 wrote:

Look at this specific CoveredCA site - yes, the state (CA) has something special going on - they seem to be funding more in subsidies.

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The "something special" appears to be only for people with low incomes; they're not just extending the enhanced federal subsidies that went away at the end of 2025:

California allocated $190 million to offer state subsidies in 2026 for people earning up to 150% of the federal poverty level, according to Covered California, the state’s health insurance marketplace.

....

However, the $190 million offsets just a small share of the $2.5 billion that California residents are losing in 2026 due to the expiration of the federal subsidy enhancements, according to Norris.

California is also offering “some additional assistance” to those earning up to 165% of the federal poverty level, according to the state marketplace.

cnbc.com/2026/01/23/aca-subsidies-state-premium-tax-credits.html 

Carl's insurance guy told him to get his income just below the 400% FPL in order to qualify for a subsidy.  But at that income level, the subsidy isn't very big, but it's impossible to know what it is without knowing where he is and how old he is.  But as I said, I'd be shocked beyond belief if someone at that income level qualifies for a subsidy big enough to result in a $0 premium health insurance plan.  

[GailL1]

Oh, I thought that @CarlP799778 was just trying to get his premiums down so that he didn’t have to repay some this year.  I guess everybody wants a “0” premium  but they want more than just Medicaid.  

I also that that CA also changed the maximum - I thought this year it was 9.5% of income but the coveredCA says 8.5% for the 2nd lowest silver plan  - but maybe I am misunderstanding.  Anyway, I thought this was also special in CA.  I have never had to use the ACA - much less get a tax credit for anything and I left CA a very long time ago.  

[CarlP799778]

That's also BS. It says that, regardless of my income, I shouldn't pay more than 8.5% of my income. I DO NOT make over $15,060/month ( 15k x 8.5% = $1275). Based on that precentage, I shouldn't be paying more than $500/month.

[TRL1111]

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@CarlP799778 wrote:

That's also BS. It says that, regardless of my income, I shouldn't pay more than 8.5% of my income. I DO NOT make over $15,060/month ( 15k x 8.5% = $1275). Based on that precentage, I shouldn't be paying more than $500/month.

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The 8.5% isn't a number that applies to everyone no matter what plan they get.  It's the number used to calculated subsidies.  The subsidy is calculated so that the second-lowest-cost Silver plan will cost no more than 8.5% of household income.

[CarlP799778]

That's no what the CoveredCA website says. It says, quote;

--

There is no upper income limit—everyone pays no more than 8.5% of their income for health insurance

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[GailL1]

Only up to 400% of the FPL in income - once you go over the 400% of the FPL even if only by a $1.00, subsidies are all lost.

[TRL1111]

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@CarlP799778 wrote:

That's no what the CoveredCA website says.

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Not any more.  Check the website again.

It looked like a pretty obvious error to me, but it wasn't just a copy-and-paste from the 2025 rules, so who knows.  But when I'd run the subsidy calculator, the results indicated the subsidy cliff was still there.

Here's a subsidy calculator where it's easy to change incomes to see changes in subsidies:

apply.coverhealthca.com/ 

For my test person (60-year-old male in 90007), an income of $24,000 has a "monthly discount" of $910.01, consisting of:

Federal APTC  $888.08

CA Premium Subsidy    up to $20.93

CA Premium Credit   $1.00

The CA Premium Subsidy is the "something special" California is doing for low-income people, which Gail mentioned.

At an income of $62,600, my test person has monthly savings of $478.73, consisting of:

Federal APTC:  $457.15

CA Premium Credit:  $1.00

(There's no CA Premium Subsidy at this higher income level)

At an income of $62,601 (i.e. $1 higher than $62,600), my test person gets a discount of $1 (the "CA Premium Credit" everybody gets).  That's the subsidy cliff that returned effective 1-1-26.

So the subsidy calculator showed a subsidy cliff, but the website had the language about 8.5% of income.  One of those is wrong, and I suspected it was the statement on the website, because the return of the subsidy cliff was a well-known and often discussed element of the expiration of "enhanced subsidies."

But here's where it gets crazy.  I used a "contact us" form on Covered California's website yesterday afternoon, pointing out the discrepancy.  I got an email back this morning, thanking me and telling me they'd corrected the website.  And they had.  They not only took out the erroneous statement, but they they clarified the changes from 2025 to 2026.

Sure, that "8.5% statement" shouldn't have been there, and even worse, it was worded in a confusing manner.  But this stuff is incredibly complicated, and what most people care about is the numbers and not why the numbers are what they are, and the subsidy calculator has been correct all along.

Anyway, I'm shocked and very impressed at how quickly they not only read an email from some random person pointing out an error on their website, but took action to fix the issue, resulting in a web page that not only deletes the erroneous statement but has additional content making the changes from 2025 to 2026 clearer.  That took some time.

If it hadn't happened to me, I probably wouldn't believe it.

[CarlP799778]

That would make more sense, but still isn't enough. Based on that table, and what my plan costs in CA ( 1280/month ) and my income ( taxable below the 62,600 limit ) my subsidy would be about $400/month, leaving my premium at $880/month. Better, but still no way affordable.

But, as I said earlier, I have a letter from CoveredCA saying my subsidy is almost $1800/month, if I wanted to take it all.

[CarlP799778]

I just did the calculator. Showing my MAGI income as $61,500, it says my subsidy would be $1576/month. Still bringing my premium to zero.

[GailL1]

I just used the KFF.org calculator and it will show you how it works out WITH OUT the enhanced subsidies (which we have now) and WITH the enhanced subsidies (which we have before 12/31/2025.When it figures the subsidy at the bottom it will give each figure and will also tell you the 2026 price for a silver plan and for a bronze plan - 

At this income level, and since the subsidy level does still apply at 400% of the FPA- your cost actually don’t change that much although the cost of insurance is still higher for your and the subsidy is lower - your overall cost is manageable.

Who this really changed for were for people who are mak eing from 400% - 700% of the FPL, the enhanced subsidies left them out this year - so no subsidy and higher premiums did not make them happy campers.  I will assume that you are in this category now and that is why your financial guy told you where you had to find something to offset some income - like a retirement contribution.  

What your financial told you was correct - for that income level - actually I used a bit below it ($61,600) you would still get a nice subsidy and for the 2nd lowest silver, your premiums would be around $500 with the subsidy.  Meaning that the premiums would be about $ 2000 a month.  Yes, about $ 1400 a month in subsidies.

But this income figure is still below 400% of the FPL (one person) but it is bearly in that cut off - the income that I used  $61,600 was at 394% of the FPL - so going over that $ 62,500 - NO SUBSIDY FOR YOU.

Use this calculator and it explains it better at the bottom where the results are given.

KFF.org- Calculator: ACA Enhanced Premium Tax Credit - WITH and WITHOUT 

I used $ 61,600 as the annual income, and used 60 as your age - I forgot if you told us, 93436 as your zip - everything else was just “1” and non smoker. 

So now all ya got to do is figure out if you can get your tax reported income down for 2026 health insurance and then make it happen in 2026.

[TRL1111]

This has been an interesting exercise.  Your subsidy is massive.  I've never seen someone with an income that high get a subsidy big enough to allow them to get a plan for $0.  In fact, 50 miles away, in Santa Barbara, your subsidy would be $500 less than what you're getting in Lompoc, and the cheapest plan would be $200/month.

In Los Angeles, your whole subsidy would be $500, and the cheapest plan would cost you $300/month.

What I noticed about Lompoc is that there are only 10 plans available, and all are PPO--no HMO plans in Lompoc.  In Santa Barbara, there are 13 plans available--the same ones as Lompoc (all PPO) plus three HMO plans. 

Subsidies are based on the cost of the second-lowest silver plan available.  In Lompoc, there are only two silver plans, while Santa Barbara has those same two plus a third silver plan--an HMO that is cheaper than the other two.  This results in a higher subsidy in Lompoc.

Lompoc's silver plans are about $1,600 and $2,050; the subsidy in Lompoc is based on $2,050.

Santa Barbara's silver plans are $1,375, $1,600, and $2,050; the subsidy in Santa Barbara is based on $1,600.

What's really crazy is that the plans that are available in both Lompoc and Santa Barbara are identical--same plan, same unsubsidized premium.  But because Santa Barbara also has a lower-cost HMO silver plan thrown into the mix, their subsidy is lower.  Even though the unsubsidized premiums for the plans are the same whether a person is in Lompoc or Santa Barbara.    

[GailL1]

@TRL1111 

I am not getting what you are getting - I am using the KFF calculator - it is different because it is figuring the results with a subsidy and without a subsidy and for this income level, there is not much difference since it is less that 400% of the FPL.

use this calculator: KFF.org - non-enhanced/enhanced 

KFF.org subsidy calculator - enchanced subsidy or not  

I used the data of zip code 93436, 1 person, no children, no employer coverae, income at $ 61, 600 - 

This seems to validate what you said - it shows a zero premium only for the Bronze plan - around $ 500 for the silver - a little lower or a little higher based on the subsidy amount.

For this income which is around 394% of the FPL, it isn’t gonna be too different on the subsidy amount.  

Now if it was above that 400% of the FPL it would be -

For the next one - everything is the same except the income and I changed it to $ 63, 500 or 419% of the FPL - made all the difference in the subsidy amount received and what he would have to pay for coverage - 

[TRL1111]

I'm not talking about enhanced subsidies at all, or any situation where the income is more than 400% of the FPL.

I'm exploring why the subsidy is so different for two addresses that are only 50 miles apart.  If a person who's getting a subsidy of $1,500 in Lompoc moves to Santa Barbara, the subsidy will go down to $1,000, even though every plan that was available to him in Lompoc is available to him in Santa Barbara.  

I figured out how it happens--Santa Barbara has a silver plan that Lompoc doesn't, which rejiggers the subsidy calculation.  But I'm pretty sure this is a result that was not intended.

[GailL1]

@TRL1111 

Good for you - and good for them.  I thought it was something special that California had going on - so I didn’t question it since it was CA - good for you!

[SereneSeagull]

That’s great that you not only made that contact with them, but how fast they responded.  I think we need more oversight people like you in our world, who care enough to do that sort of thing 

[TRL1111]

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@SereneSeagull wrote:

That’s great that you not only made that contact with them, but how fast they responded.  I think we need more oversight people like you in our world, who care enough to do that sort of thing 

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As you might imagine, I'm no stranger to trying to help people improve the information they disseminate, or at least be accurate.  But it takes two to do that tango, and finding willing partners is rare.  How many times have "contact us" comments disappeared into a black hole?

But even more, in their response to me, all they did was thank me and say they corrected the error.  They didn't toot their horn about digging around in the web page beyond correcting the error, to improve things that could be clearer--I noticed that myself when I went to see if they really had taken out the erroneous statement.

All of which led me to look at other parts of their site, and Californians are being well served.  On the plan picker, they have "Enrollment tips for your area."  It mostly has to do with networks, and is so clear. 

Health Net PPO:  "Lowest priced plan with USC-Keck in their network. However, it does not provide access to Cedars-Sinai or UCLA. The provider network is smaller than Blue Shield PPO."

When I bought ACA plans on the federal exchange, there was NO information about networks for the various plans, never mind easy-to-understand general information.

[CarlP799778]

The funny thing is, before he was going through my numbers, CoveredCA said my premium (based on my gross income, didn't know I should put in what my adjusted comes to ) would be $1281/month less $1 from Calif, for a total of $1280/month. O whole dollar. WOW! Be still my heart.

[GailL1]

I think you can do a rough estimate here on this worksheet -

Healthcare.gov - Saving money on health insurance