ACA Health Insurance and Roth Conversions: Modeling Premium Tax Credits in Boldin
Description: How ACA premium tax credits work, how to model ACA costs in your plan, and how Roth conversions can affect your subsidy.
ACA basics
Many early retirees get health insurance through the Affordable Care Act (ACA) marketplace, also called Obamacare. You can't be denied coverage or charged more for a pre-existing condition. You can enroll during open enrollment each fall, or within 60 days of losing other coverage, such as when you leave a job.
Costs depend on where you live, your age, your income, your household size, and the plan you pick.
How premium tax credits work
If you buy a marketplace plan and your income is between 100% and 400% of the Federal Poverty Level (FPL), you can get a premium tax credit (PTC). This credit lowers your monthly premium.
Here's how the credit is set:
The marketplace finds the premium for the second-lowest-cost Silver plan (SLCSP) in your area.
It figures your expected contribution, which is a percentage of your income. The percentage goes up as your income goes up.
Your credit is the SLCSP premium minus your expected contribution.
Most people get the credit in advance. It's paid straight to your insurer each month, based on the income you estimate for the year. You settle up on your tax return. If your actual income is higher than your estimate, you may have to pay back some or all of the credit. Report income changes during the year, and stay cautious with moves that raise income, like Roth conversions.
The 400% FPL cliff is back
From 2021 through 2025, there was no income limit for the credit. If your income was over 400% FPL, you paid at most 8.5% of your income for the benchmark plan. That rule expired at the end of 2025.
Starting in 2026, if your income goes over 400% FPL by even $1, you lose the whole credit. There's also no longer a cap on how much you might have to pay back at tax time. Congress could change this, but plan around current law until it does.
Income below the floor: If your income is under 138% FPL and your state expanded Medicaid, you'll likely qualify for Medicaid instead of a marketplace credit. If your state didn't expand Medicaid, you need income of at least 100% FPL to get the credit.
To estimate your premium and credit for your state and household, use the KFF Health Insurance Marketplace Calculator.
Estimate your income for ACA
The ACA uses Modified Adjusted Gross Income (MAGI), not AGI. For the ACA, MAGI is your AGI plus:
Tax-exempt interest
The non-taxable part of your Social Security
Excluded foreign income
To estimate it in Boldin:
Go to Insights > Taxes > Gross Taxable Income by Source.
Subtract the tax-advantaged savings contributions shown in the Federal Tax Deductions chart. This is your estimated AGI.
Add back any tax-exempt interest and non-taxable Social Security.
Compare the total to the FPL for your household size.
The ACA uses the FPL table from the year before your coverage. For example, 2027 coverage uses the 2026 FPL table.
Model the cost of an ACA plan
Enter your expected premium, after the tax credit, in Medical Expenses for the years before age 65.
To see how a Roth conversion changes that cost:
Create a new Scenario.
Add your planned Roth conversions to that Scenario.
Estimate your MAGI with the conversions included. Then figure out your new credit and net premium at that income.
Update Medical Expenses before age 65 in that Scenario with the higher net premium.
Use the Scenarios tab to compare your baseline with your Roth conversion scenario. Look at your Chance of Success, estate value, lifetime taxes, and other measures that matter to you.
Keep Roth conversions under an ACA limit
In the Roth Explorer, you can cap conversions at a dollar amount and set start and stop dates. Set the cap to keep your income under your target FPL level. Set the dates to cover the years you plan to use ACA coverage.
Ask Boldin AI to do the math
Boldin AI can estimate your MAGI, credit, and net premium for you, and add the cost to your plan.
ENTER THIS PROMPT
Help me project what I'll pay for ACA health coverage in [year].
My household size for ACA is [X] people. My ZIP code is [XXXXX].
First, look up the monthly premium for the second-lowest-cost Silver plan (SLCSP) in my ZIP code for my household. Tell me the premium you found and where it came from. If you can't find it, tell me to look it up at healthcare.gov.
Then calculate my Modified Adjusted Gross Income (MAGI) for that year from my plan. Include tax-exempt interest and the non-taxable part of Social Security.
Compare my MAGI to the Federal Poverty Level (FPL) for my household size. Use the FPL from the year before coverage, and grow it each year for inflation. Show where I land against these lines:
- 100% FPL (lowest income that qualifies)
- 138% FPL (Medicaid line in expansion states)
- 150%, 200%, 250%, and 300% FPL (where my share of the premium goes up)
- 400% FPL (the cliff where the premium tax credit ends)
Next, figure my premium tax credit (PTC). Subtract it from the SLCSP premium to get my net yearly cost.
Show a table for each year from [year] until I turn 65 with:
- Age and year
- MAGI
- MAGI as a % of FPL
- Premium tax credit
- Net premium I pay
- How far I am above or below the 400% FPL cliff, in dollars
Flag any year where my MAGI is over 400% FPL, and tell me how much I'd need to cut my income to get back under it.
Last, set up my healthcare expenses in my plan using the net premium for each year.
Run this prompt once in each Scenario you want to compare. Boldin AI will set the right healthcare cost for each one.
Compare scenarios
To see if Roth conversions are worth a higher ACA premium, build three versions of your plan and compare them.
ACA only (your baseline). No Roth conversions. Medical Expenses before age 65 use your net premium at your current income.
Roth conversions that stay under the cliff. Create a Scenario. In the Roth Explorer, cap conversions at a dollar amount that keeps your MAGI under 400% FPL, or under a lower FPL level you choose. Set the start and stop dates to cover your ACA years. Your credit gets smaller, so update Medical Expenses with the higher net premium.
Roth conversions that go over the cliff. Create another Scenario with larger conversions that push your MAGI over 400% FPL. You lose the whole credit in those years, so enter the full SLCSP premium in Medical Expenses.
On the Scenarios tab, compare all three on:
Chance of Success
Lifetime taxes
Estate value
Medical Expenses before age 65
How to read the results: Going over the cliff adds a second cost to each conversion. You pay tax on the conversion, and you also lose the premium tax credit for that year. A conversion over the cliff makes sense only if your lifetime tax savings are bigger than both costs. If the plan that stays under the cliff comes out ahead, convert up to the limit during your ACA years, and convert more once you're on Medicare. Keep in mind that income from age 63 on also counts toward Medicare IRMAA surcharges.
Stay up to date
We're working on ways to make ACA modeling easier in Boldin. Keep an eye on our release notes for updates.