Implementation of the Affordable Care Act (ACA) over the coming years could smooth
this effect as those eligible for Medicaid are transitioned into the exchange system as
their income rises beyond the income threshold. At the same time, the phase out of the
exchanges and cost share subsidies in ACA will add to the effective marginal tax rates
facing workers up to 400 percent of the FPL, after which a new but more moderate
cliff occurs. While we include some ACA estimates below for hypothetical households,
future iterations of our work will expand on these estimates and analyze households
as they move between health subsidies in the transfer and tax systems, and eventually
become ineligible for health subsidies.