Affordable Care Act Fundamentals
A popular way for early retirees to obtain medical insurance is through Affordable Care Act health plans, also known as Obamacare. With these plans there's no special enrollment period, no underwriting, and you can't be denied based on pre-existing conditions. Costs vary widely depending on where you live, your income, the coverage you choose, and your household size.
If you purchase your plan on the marketplace and your income is low enough — generally below 400% of the Federal Poverty Level (FPL) — you're eligible for premium tax credits (subsidies). The credit is the difference between the premium for the second-lowest-cost Silver plan (SLCSP) available in your area and your required household contribution, which is a percentage of your income.
Premium tax credits are usually paid in advance, directly to your insurer each month, based on your estimated income for the year. You reconcile the actual amount on your tax return. If your actual income comes in higher than what you estimated, you may have to repay some or all of the credit — so it's important to report income changes as they happen and to be conservative when planning income-raising moves like Roth Conversions.
The subsidy cliff is back for 2026. From 2021–2025, the American Rescue Plan Act removed the hard cutoff at 400% FPL — income above that line just meant a higher (capped) premium, not a total loss of subsidy. That enhancement expired at the end of 2025.
For 2026, exceeding 400% of the FPL means losing the entire premium tax credit, not a portion of it — and there's no cap limiting how much you'd have to repay if your income comes in higher than estimated. Congress may act to extend the enhanced subsidies again, but plan around current law unless and until that happens.
Note: if your income falls below a certain FPL threshold, you won't qualify for marketplace subsidies at all — you'll be directed to Medicaid instead. That floor is 100% FPL in states that didn't expand Medicaid, and 138% FPL in states that did.
Use the KFF Subsidy Calculator to estimate your premium and credit for your state and household size.
Estimating Your Income for ACA Purposes
Eligibility is based on Modified Adjusted Gross Income (MAGI) — not AGI. MAGI is your AGI plus any tax-exempt interest, non-taxable Social Security benefits, and excluded foreign income.
To estimate your AGI as a starting point in Boldin, go to Insights > Taxes > Gross Taxable Income by Source, then subtract tax-advantaged savings contributions shown in the Federal Tax Deductions chart. From there, add back any tax-exempt interest or non-taxable Social Security you have — these count toward MAGI for ACA purposes even though they aren't part of AGI. Compare the resulting MAGI to the FPL threshold for your household size for the plan year in question (FPL figures are announced annually and applied with a one-year lag — use the current year's published table, not an older one).
Modeling the Cost of an ACA Health Plan
Enter your expected cost, net of premium tax credits, in Medical Expenses prior to age 65.
To see how a Roth Conversion changes that cost:
Create a new Scenario.
Enter your planned Roth Conversions in that Scenario.
Estimate your MAGI with the conversions included, and determine what your premium tax credit (and therefore your net premium) would be at that income level. Update Medical Expenses prior to age 65 in the Scenario to reflect the higher, less-subsidized cost.
Use the Scenario tab to toggle between your Baseline and Roth Conversion scenarios, and compare the impact on plan health, net estate value, lifetime taxes, and other measures that matter to you.
Using the Roth Explorer to Limit Conversions to an ACA Threshold
The Roth Explorer lets you convert up to a specific dollar amount, paired with specific start and stop dates. Use this together — a dollar cap plus a date range covering the years you expect to rely on ACA coverage — to keep suggested conversions within your target income threshold.
Potential Future Model
We're exploring a more direct way to model this. Instead of estimating your MAGI and premium tax credit by hand, you would be able to enter your household size and your SLCSP premium directly, and Boldin would calculate your MAGI, your premium tax credit, and your net healthcare cost automatically each year — updating as the rest of your plan changes.
The Roth Explorer would also get a dedicated ACA / FPL strategy, letting you cap suggested conversions to a target FPL tier (150%, 200%, 250%, 300%, or 400%) or a custom income level, for the years you specify — instead of manually calculating and entering a dollar cap yourself. This would show your remaining headroom to the threshold for each year, and warn you if a suggested conversion would cross it.
Until this ships, use the manual steps above — and keep in mind the 2026 hard cliff described earlier when choosing how close to 400% FPL you're willing to plan
If you're interested in this enhancement, please submit your feedback via Boldin AI. We'd be interested to hear your thoughts.