Is your health insurance legally "unaffordable"?
If your lowest-cost plan costs more than 8.05% of your household income, federal rules may classify your coverage as unaffordable — opening the door to a hardship exemption and catastrophic plan eligibility at any age.
Modified Adjusted Gross Income — close to the AGI on your tax return for most families. Pre-tax 401(k) and HSA contributions reduce it.
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How this works
Federal rules set an affordability threshold each year — 8.05% of household MAGI for 2026. If the cheapest plan available to you costs more than that, coverage is deemed unaffordable.
Unaffordability qualifies your household for an affordability hardship exemption, claimed through the Health Insurance Marketplace.
The exemption unlocks enrollment in a catastrophic plan at any age — normally these are restricted to people under 30.
What catastrophic plans actually are
Catastrophic plans carry the highest deductible allowed by law — the deductible equals the annual out-of-pocket maximum. Before you hit it, you get three primary care visits and free preventive care; essentially everything else is out of pocket until the deductible is met. After that, covered services are paid in full. They're built for one job: protecting you from the financially ruinous event — the emergency surgery, the extended hospital admission — not routine care.
Before you drop anything: catastrophic premiums for adults over 40 are often not dramatically cheaper than bronze plans in many counties — and you cannot apply premium tax credits to a catastrophic plan. This tool tells you which door the law opens. Compare actual prices in your county before walking through it.
The trade-off, by age
Qualifying is only half the question — the other half is whether the switch is worth it. Enter an age to see modeled national-average premiums for catastrophic vs. lowest-cost bronze. Both plans price on the same federal age curve, so the dollar gap grows with age — but it stays thin relative to the deductible you take on.
Ages 21–64. Modeled national averages — your county's actual rates will differ.
The math most people miss: catastrophic plans take no premium tax credits at any income, and the deductible sits at the legal out-of-pocket ceiling. If a single bad year costs you ~$3,100 more in deductible than bronze would, thin monthly savings can take years to earn that back. Fewer than 1% of marketplace enrollees choose catastrophic — the door is open, but check the price of walking through it.
Why so many families suddenly qualify
Enhanced premium tax credits expired at the end of 2025. For families who lost subsidies, net premiums jumped sharply — in some cases doubling or more. Every dollar of premium increase raises the income ceiling for this exemption by about $12.40. Coverage that was "affordable" last year may be legally unaffordable this year at the exact same income.
Estimate your household premium
Children under 15 are rated at 0.765× the age-21 adult rate; federal rules charge premiums for at most the three oldest children under 21, so additional children beyond three are included at no extra premium here. Tip: carry the bronze household figure up to the affordability checker at the top — a family premium this size often clears the 8.05% line at incomes well into six figures.