Understanding ACA Subsidies and Premium Tax Credits in Texas
Financial help is what makes Marketplace coverage work for most Texans. Almost 92% of the nearly 4.2 million Texans who selected Marketplace plans for 2026 received advance premium tax credits, according to HealthInsurance.org. Here is how the credit works, what changed, and what to expect for 2027.
How the Premium Tax Credit Works
Per HealthCare.gov, the premium tax credit lowers your monthly premium, and the amount depends on the household size and estimated income on your application. You can use all, some, or none of it each month. If you use more advance credit than you qualify for, you repay the difference when you file your federal taxes.
Eligibility runs from 100% to 400% of the Federal Poverty Level (FPL) in all states, HealthCare.gov explains. Income means modified adjusted gross income (MAGI), which for most people is the same as or very close to adjusted gross income.
What Households Are Expected to Pay in 2027
The credit equals the cost of the benchmark Silver plan minus an expected contribution based on your income. The IRS published the 2027 contribution percentages in Rev. Proc. 2026-26:
| Household Income (% of FPL) | Expected Contribution (% of Income) |
|---|---|
| Less than 133% | 2.15% |
| 133% to under 150% | 3.23% to 4.30% |
| 150% to under 200% | 4.30% to 6.78% |
| 200% to under 250% | 6.78% to 8.66% |
| 250% to under 300% | 8.66% to 10.22% |
| 300% to 400% | 10.22% |
What Changed and What It Means in Texas
- Enhanced subsidies expired. The enhancements that applied from 2021 through 2025 ended at the end of 2025, and household income above 400% of FPL is again ineligible for subsidies.
- Higher net costs in 2026. HealthInsurance.org reports the average Texas subsidy was $667 per month in 2026, up from $541 in 2025, but the average after-subsidy premium rose to about $89 per month from $57.
- Rates for 2027. Insurers proposed an average increase of about 13.1% for 2027 before subsidies, according to the same source.
A Texas Pricing Quirk Worth Knowing
Texas requires insurers to load extra cost onto Silver plans to account for cost-sharing reductions, a load that rose to 40% as of 2026, per HealthInsurance.org. Because subsidies are based on Silver premiums, this can make Bronze and Gold plans cheaper after subsidies, and Gold can even cost less than Silver. Cost-sharing reductions, which lower out-of-pocket costs on Silver plans, are available for household income up to 250% of FPL.
Protect Yourself From Repayment Surprises
- Estimate your income for the coverage year as carefully as you can.
- Report income and household changes right away through your Marketplace account.
- If you are worried about owing money at tax time, consider using less than your full advance credit each month.
Beginning with the 2026 tax year, the caps on repaying excess advance credits were removed, so the full excess can be owed.
Check Your Savings Before You Enroll
Open Enrollment runs November 1, 2026 through January 15, 2027, with December 15 as the deadline for coverage starting January 1. A licensed agent can estimate your credit and compare plans at no extra cost to you. Start with HealthSherpa, or call (212) 804-6730 to speak with a licensed agent today.
This article is for educational purposes only and does not constitute insurance, legal, tax, or financial advice. This site and its agents are not affiliated with or endorsed by the federal government, HealthCare.gov, or the Centers for Medicare & Medicaid Services (CMS). Eligibility rules, deadlines, and subsidy structures are subject to change — always verify current details at HealthCare.gov or CMS.gov. This content is provided by a licensed agent affiliated with Flatbush Insurance Brokerage.
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