2027 Open Enrollment: What Happens When You’re Over the Income Limit for Subsidies
There's a specific dollar amount that changes everything about your health insurance for 2027. Cross it, and your premium tax credit doesn't shrink — it vanishes. Completely. One dollar over the line and you go from subsidized to full price overnight.
That line is 400% of the federal poverty level, and for 2027 coverage it's back in force after years of enhanced subsidies that softened it. Here's exactly what happens when you're over it, and what to do about it during open enrollment.
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The Line, in Actual Dollars
For 2027 coverage, subsidies are calculated off the 2026 federal poverty guidelines. The 400% cutoff — the point where premium tax credits drop to zero — works out to:
- Household of 1: $63,840
- Household of 2: $86,560
- Household of 4: $132,000
These are based on modified adjusted gross income (MAGI), which for most people is close to adjusted gross income with a few add-backs. Note that it's household income — if you're married, your spouse's earnings count even if you're shopping for individual coverage.
What Actually Happens When You Cross It
Let's make this concrete. Say you're a self-employed consultant, household of two, and your MAGI comes in at $88,000 for 2027 — about $1,400 over the $86,560 limit.
Here's what changes:
Your premium tax credit goes to $0. Not reduced. Zero. There's no phase-out ramp at the top end; the law simply says no credits above 400% of poverty.
You pay the full sticker price. That Silver plan that cost you $350 a month with subsidies might now cost $850. A family plan can jump from $600 subsidized to $2,000+ unsubsidized. These aren't exaggerations — they're typical numbers I'm seeing for 2027.
Your plan doesn't change — only the price does. You're still in the same plan with the same network and benefits. The marketplace just stops writing you a check each month.
If you already received advance credits, you may owe money back. If you took advance premium tax credits during 2026 based on an income estimate that turned out too low, you reconcile it on your tax return. And the old repayment caps are eliminated starting with the 2026 tax year — if your actual income blows past your estimate, you now owe the entire excess back, no cap. High earners with variable income need to be extremely careful with estimates.
The Decision You're Actually Facing
Once you're over the limit, the question stops being "which subsidized plan is best?" and becomes "what's the cheapest way to get solid coverage at full price?" That reframing matters, because it opens up options most people never consider while they're inside the subsidy system.
Stay on the marketplace unsubsidized. This is the default, and for some it's right. If anyone in your household has significant health conditions, the ACA's guaranteed issue means no one can turn you down or charge you more for being sick. That protection has real dollar value. Price it, but don't dismiss it.
Drop to a Bronze plan. If you're staying in the marketplace but healthy, Bronze premiums are dramatically cheaper than Silver or Gold. You're essentially buying catastrophic protection and paying cash for routine care.
Get quotes on private off-exchange plans. This is where the math gets interesting for healthy households over the limit. These private off-exchange PPO plans usually cost almost half as much as a full-price marketplace plan with no subsidies, as long as there are no major health conditions. They often come with nationwide PPO networks, which can be broader than the narrow networks common on marketplace plans.
The tradeoff is underwriting: you have to qualify based on your health. Applicants generally need to be in relatively good health — these plans don't offer the ACA's pre-existing condition protections, and they're not ACA-equivalent coverage. But if your household is healthy, the premium difference is large enough that this comparison is worth 15 minutes of your time during open enrollment.
Timing Matters: The December 15 Deadline
Open enrollment runs November 1, 2026 through January 15, 2027, but there's a critical split in the middle: enroll by December 15, 2026 and your coverage starts January 1. Enroll after that and you're looking at a February 1 start date — meaning a month with no coverage or a month of COBRA premiums.
If you're switching from a marketplace plan to a private plan, the timing still matters for a different reason: you want your new coverage lined up before your old plan's price jump hits in January. Don't let the holidays distract you into missing the window.
A Note on Estimating Income
If you're anywhere near the line, your income estimate deserves real attention this year. A few things that legitimately reduce MAGI: pre-tax retirement contributions, HSA contributions (2027 limits are $4,500 self-only and $9,000 for families, plus a $1,000 catch-up at 55+), and business deductions if you're self-employed.
But be conservative and honest. With repayment caps gone, an optimistic estimate that turns out wrong is now a much more expensive mistake than it used to be. When in doubt, estimate slightly high or talk to your tax professional — this is general information, not tax advice, and your specific situation may have wrinkles worth professional review.
The Bottom Line
Being over the income limit for 2027 subsidies isn't a dead end — it's a fork in the road. The marketplace at full price is one path, but for healthy households, private off-exchange plans are often dramatically cheaper for similar coverage levels. The only mistake is not comparing.
Get a free quote at myprivatehealthinsurance.com or call 561-927-9469. We'll run your marketplace renewal next to private options and show you the real difference in dollars — then you decide with actual numbers instead of guesses.
Justin Brain is a licensed health insurance agent (licensed since 2016, National Producer Number (NPN) #17940663) and founder of My Private Health Insurance in Fort Lauderdale, Florida. He has helped self-employed professionals, 1099 contractors, and small business owners in 33 states secure private, off-exchange health coverage — often at about half the cost of full-price marketplace plans. His team specializes in medically underwritten PPO plans for people who earn too much for ACA subsidies.