ACA Health Insurance Cost Estimator
Estimate your 2026 Marketplace health insurance premium and subsidy based on income, age, and household size. See how income management affects your monthly cost.
Build your bridge to stay under the subsidy cliff
Your annual MAGI determines your subsidy. Use the Bridge Strategy Calculator to see how drawing from taxable accounts and timing Roth conversions can keep your income below 400% FPL — preserving thousands per year in healthcare subsidies.
Model Your Withdrawal Plan →Health Insurance Before Medicare: The Early Retiree's Biggest Cost
For early retirees, healthcare is often the largest and most unpredictable line item in the budget. Medicare doesn't start until age 65, which means a 50-year-old retiree needs 15 years of private coverage — and a 55-year-old still needs 10 years. The Affordable Care Act Marketplace is the primary option for most early retirees who lose employer-sponsored coverage.
ACA premiums vary significantly based on income, age, household size, and location. The federal government provides premium tax credits (subsidies) to households between 100% and 400% of the Federal Poverty Level (FPL). Above 400% FPL, subsidies drop to zero — this is known as the subsidy cliff, and it has major implications for early retirement income planning.
Note: Enhanced subsidies that temporarily extended above 400% FPL under the American Rescue Plan Act (ARPA) expired in January 2026. The calculator above reflects current 2026 pre-ARPA rules.
The 400% FPL Subsidy Cliff Explained
The subsidy cliff is one of the most important concepts in early retirement healthcare planning. At exactly 400% of the Federal Poverty Level, your ACA subsidy drops to zero. One dollar over the threshold costs you the entire subsidy — which can be thousands of dollars per year.
For a single person in 2026, 400% FPL is roughly $62,600. For a couple, it's about $84,600. If your Modified Adjusted Gross Income (MAGI) exceeds these thresholds, you pay the full unsubsidized premium.
This creates a powerful incentive to manage retirement income carefully. Early retirees have significant flexibility: drawing from Roth accounts doesn't count as MAGI, qualified dividends and long-term capital gains at low income levels may be taxed at 0%, and timing of Roth conversions can be managed to stay below the cliff.
See the full health insurance before Medicare guide for a complete breakdown of ACA strategies for early retirees.
How ACA Subsidies Affect Your Bridge Strategy
Healthcare costs must be included in your taxable brokerage bridge calculation. A couple retiring at 55 without subsidies could easily pay $24,000-$36,000 per year in premiums alone — before out-of-pocket costs. Over 10 years until Medicare, that's $240,000-$360,000 in healthcare spending that needs to be funded.
With income management to stay below 400% FPL, those same 10 years might cost $60,000-$120,000 in premiums — a difference of $180,000 or more. That's a meaningful amount of additional portfolio required if you don't plan around the subsidy cliff.
Use the Bridge Strategy Calculator to model your full withdrawal plan, and use this tool to estimate the healthcare cost that needs to be built into your annual spending figure.
Frequently Asked Questions
What counts as MAGI for ACA subsidy purposes?
MAGI for ACA includes wages, self-employment income, Social Security benefits (85% if above thresholds), taxable interest, dividends, capital gains, IRA and 401(k) withdrawals, and Roth conversions. Roth contributions and qualified Roth distributions do NOT count as MAGI.
What is the Federal Poverty Level (FPL)?
The FPL is an income threshold set annually by the federal government. ACA subsidies are calculated as a percentage of FPL. In 2026, 100% FPL is roughly $15,650 for a single person and $21,150 for a household of two. Subsidies phase out at 400% FPL.
Does Roth IRA withdrawal affect ACA subsidies?
Qualified Roth IRA distributions (from accounts at least 5 years old, owner at least 59½) are not included in MAGI and do not affect subsidy eligibility. This makes Roth accounts an important tool for managing income in early retirement to stay below subsidy thresholds.
What is the subsidy cliff and how do I avoid it?
The subsidy cliff is the point at 400% FPL where all subsidies disappear. Strategies to stay below: draw from Roth accounts instead of traditional IRA/401(k), realize long-term capital gains at the 0% rate in lower-income years, time Roth conversions carefully, and consider charitable giving to reduce MAGI.
How much are ACA premiums for someone age 55 in early retirement?
At age 55, the unsubsidized benchmark silver plan premium is roughly $800-$950/month for a single person and $1,600-$1,900/month for a couple, depending on location. With subsidies at 250-350% FPL, that can drop to $200-$400/month per person. The calculator above gives a personalized estimate.
What happens to ACA coverage when I turn 65?
At 65 you become eligible for Medicare Part A (hospital) and Part B (medical). Most people enroll at 65 and transition from ACA Marketplace coverage to Medicare. You cannot receive ACA subsidies if you are enrolled in or eligible for Medicare.