How ACA Subsidies Work in 2026 (With Texas Examples)

The formula in one paragraph

Take your household's Modified Adjusted Gross Income (MAGI). Look up the Federal Poverty Level (FPL) for your household size. Divide MAGI by FPL to get your FPL %. The sliding scale gives you a maximum % of income you'd pay for the benchmark Silver plan. Subtract that cap from the benchmark price — the rest is your premium tax credit.

Three Texas examples

Example 1: Houston family of 4, $60,000/yr (200% FPL)

Benchmark cap = ~2% of income = ~$100/mo. Benchmark Silver runs ~$1,400/mo for this family in Harris County → premium tax credit of ~$1,300/mo. They can apply that credit to any plan; on a low-cost Bronze plan they often pay $0/mo.

Example 2: Dallas couple, $90,000/yr (~430% FPL pre-2021)

Pre-2021 they'd have hit the subsidy cliff. With the expanded credits, their cap is 8.5% = ~$637/mo. If their benchmark Silver is $1,200/mo, they get a ~$563/mo tax credit.

Example 3: Austin self-employed, $40,000/yr

At ~270% FPL their cap is ~4% = ~$133/mo on the benchmark. They typically can choose a Silver CSR plan with lower deductibles in addition to the premium credit.