diff --git a/changelog.d/md-premium-assistance-exact-fpl-ratio.fixed.md b/changelog.d/md-premium-assistance-exact-fpl-ratio.fixed.md
new file mode 100644
index 00000000000..fb5c4a34f83
--- /dev/null
+++ b/changelog.d/md-premium-assistance-exact-fpl-ratio.fixed.md
@@ -0,0 +1 @@
+Decide Maryland Premium Assistance's 400% income ceiling on the exact ratio of ACA MAGI to the prior-year poverty guideline instead of the truncated `aca_magi_fraction` (MHBE PY2026 design: "No state subsidy above 400% FPL"; PY2027: "Eligibility: 400% FPL or below"). Under current law the federal premium tax credit gate already ends at 400%, so this changes results only when a reform extends the federal credit above 400%, where incomes from 400.003% to 400.994% were eligible.
diff --git a/policyengine_us/tests/policy/baseline/gov/states/md/mhbe/premium_assistance/md_premium_assistance.yaml b/policyengine_us/tests/policy/baseline/gov/states/md/mhbe/premium_assistance/md_premium_assistance.yaml
index dc03a0ca2b0..c4124069b40 100644
--- a/policyengine_us/tests/policy/baseline/gov/states/md/mhbe/premium_assistance/md_premium_assistance.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/states/md/mhbe/premium_assistance/md_premium_assistance.yaml
@@ -229,6 +229,7 @@
     md_premium_assistance: 0
 
 - name: Case 9, program not in effect in 2025 -> 0.
+  # 250% of the 2024 one-person guideline ($15,060), the prior year for 2025.
   period: 2025
   absolute_error_margin: 0.01
   input:
@@ -239,7 +240,7 @@
     tax_units:
       tax_unit:
         members: [person1]
-        aca_magi: 39_125
+        aca_magi: 37_650
         aca_magi_fraction: 2.50
         aca_required_contribution_percentage: 0.0844
         slcsp: 6_000
@@ -252,6 +253,7 @@
     md_premium_assistance: 0
 
 - name: Case 10, program sunset in 2028 -> 0.
+  # The prior-year guideline is pinned so the supplied 2.50 matches aca_magi.
   period: 2028
   absolute_error_margin: 0.01
   input:
@@ -263,6 +265,8 @@
       tax_unit:
         members: [person1]
         aca_magi: 39_125
+        tax_unit_fpg:
+          2027: 15_650
         aca_magi_fraction: 2.50
         aca_required_contribution_percentage: 0.0844
         slcsp: 6_000
@@ -306,7 +310,7 @@
   # COMAR .04B: max(0, (6_000 - 3_500) - md_pct * 0) = 2_500. (This case
   # expected 0 under the older (federal - md) * income reading; on main it
   # passed only because the unit, with no gross income, computed as a
-  # non-filer.)
+  # non-filer.) Zero MAGI derives a 0% FPL fraction, so md_pct is 0.
   period: 2026
   absolute_error_margin: 0.01
   input:
@@ -318,7 +322,6 @@
       tax_unit:
         members: [person1]
         aca_magi: 0
-        aca_magi_fraction: 1.50
         aca_required_contribution_percentage: 0.0419
         slcsp: 6_000
         aca_ptc: 3_500
@@ -408,9 +411,10 @@
   output:
     md_premium_assistance: 0
 
-- name: Case 16, single age 40 at 225% FPL -> 1061.50 (interpolated 200-250% band).
+- name: Case 16, single age 40 at 225% FPL -> 1052.77 (interpolated 200-250% band).
   # md target 2.25 FPL = 0.02 + 0.5*(0.0622-0.02) = 0.0411. COMAR .04B:
-  # max(0, (6_000 - 3_500) - 0.0411 * 35_000) = 2_500 - 1_438.50 = 1_061.50.
+  # 225% of the 2025 one-person guideline ($15,650) is 35_212.50.
+  # max(0, (6_000 - 3_500) - 0.0411 * 35_212.50) = 2_500 - 1_447.23 = 1_052.77.
   period: 2026
   absolute_error_margin: 0.01
   input:
@@ -421,7 +425,7 @@
     tax_units:
       tax_unit:
         members: [person1]
-        aca_magi: 35_000
+        aca_magi: 35_212.50
         aca_magi_fraction: 2.25
         aca_required_contribution_percentage: 0.0752
         slcsp: 6_000
@@ -432,13 +436,14 @@
         members: [person1]
         state_code: MD
   output:
-    md_premium_assistance: 1_061.50
+    md_premium_assistance: 1_052.77
 
-- name: Case 17, multi-member mixed APTC eligibility -> 929.39 (non-enrollee YA excluded).
+- name: Case 17, multi-member mixed APTC eligibility -> 1256.31 (non-enrollee YA excluded).
   # age-40 enrollee + age-30 NON-enrollee at 300% FPL. Unit is eligible (one enrollee),
   # and the age-30 non-enrollee does not trigger the young adult reduction, so
-  # md target = 7.98%. COMAR .04B:
-  # max(0, (9_000 - 4_324) - 0.0798 * 46_950) = 4_676 - 3_746.61 = 929.39.
+  # md target = 7.98%. 300% of the 2025 two-person guideline ($21,150) is 63_450;
+  # self-consistent APTC = 9_000 - 0.0996 * 63_450 = 2_680.38. COMAR .04B:
+  # max(0, (9_000 - 2_680.38) - 0.0798 * 63_450) = 6_319.62 - 5_063.31 = 1_256.31.
   period: 2026
   absolute_error_margin: 0.01
   input:
@@ -452,18 +457,18 @@
     tax_units:
       tax_unit:
         members: [person1, person2]
-        aca_magi: 46_950
+        aca_magi: 63_450
         aca_magi_fraction: 3.00
         aca_required_contribution_percentage: 0.0996
         slcsp: 9_000
-        aca_ptc: 4_324
+        aca_ptc: 2_680.38
         tax_unit_is_filer: true
     households:
       household:
         members: [person1, person2]
         state_code: MD
   output:
-    md_premium_assistance: 929.39
+    md_premium_assistance: 1_256.31
 
 - name: Case 18, interior interpolation in the 300-400% band with a DERIVED target %.
   # aca_magi_fraction 3.50 -> md_pct interpolates initial[4]=0.0798 (at 3.0) to
@@ -497,10 +502,11 @@
   output:
     md_premium_assistance: 742.20  # self-consistent APTC: equals the old reading
 
-- name: Case 19, second in-effect year (2027) mirrors the 2026 250% FPL case -> 66.43.
+- name: Case 19, second in-effect year (2027) mirrors the 2026 250% FPL case -> 18.22.
   # Same forced-input shape as Case 3 but at period 2027, proving the program is
   # still in effect in its second plan year (distinct from the 2028 sunset).
-  # COMAR .04B: max(0, (6_000 - 3_500) - 0.0622 * 39_125) = 2_500 - 2_433.575 = 66.425.
+  # 250% of the 2026 one-person guideline ($15,960), the prior year for 2027, is
+  # 39_900. COMAR .04B: max(0, (6_000 - 3_500) - 0.0622 * 39_900) = 2_500 - 2_481.78 = 18.22.
   period: 2027
   absolute_error_margin: 0.01
   input:
@@ -511,7 +517,7 @@
     tax_units:
       tax_unit:
         members: [person1]
-        aca_magi: 39_125
+        aca_magi: 39_900
         aca_magi_fraction: 2.50
         aca_required_contribution_percentage: 0.0844
         slcsp: 6_000
@@ -522,7 +528,7 @@
         members: [person1]
         state_code: MD
   output:
-    md_premium_assistance: 66.425
+    md_premium_assistance: 18.22
 
 - name: Case 20, negative aca_magi -> income floored before multiplying (no sign-flip).
   # The formula floors income at 0 (max_(aca_magi, 0)), so a negative aca_magi
@@ -556,10 +562,11 @@
 - name: Case 21, young-adult floor drives target % to 0 -> subsidy is the full post-APTC premium.
   # Age 25 (2.5pp reduction) at 175% FPL where base target = 0.01 (interpolated
   # 0%@1.5 -> 2%@2.0, position 0.5). 0.01 - 0.025 < 0 -> md_pct floors at 0.
+  # 175% of the 2025 one-person guideline ($15,650) is 27_387.50.
   # SYNTHETIC federal % 0.05 (not the true schedule); self-consistent APTC =
-  # slcsp 6_000 - 0.05 * 27_000 = 6_000 - 1_350 = 4_650. With md_pct 0 the MD
-  # contribution is 0, so the subsidy is the full post-APTC premium balance:
-  # max(0, (6_000 - 4_650) - 0 * 27_000) = 1_350. Filer inputs supplied.
+  # slcsp 6_000 - 0.05 * 27_387.50 = 6_000 - 1_369.375 = 4_630.625. With md_pct 0
+  # the MD contribution is 0, so the subsidy is the full post-APTC premium balance:
+  # max(0, (6_000 - 4_630.625) - 0 * 27_387.50) = 1_369.375. Filer inputs supplied.
   period: 2026
   absolute_error_margin: 0.01
   input:
@@ -567,21 +574,21 @@
       person1:
         age: 25
         is_aca_ptc_eligible: true
-        employment_income: 27_000
+        employment_income: 27_387.50
     tax_units:
       tax_unit:
         members: [person1]
-        aca_magi: 27_000
+        aca_magi: 27_387.50
         aca_magi_fraction: 1.75
         aca_required_contribution_percentage: 0.05
         slcsp: 6_000
-        aca_ptc: 4_650
+        aca_ptc: 4_630.625
     households:
       household:
         members: [person1]
         state_code: MD
   output:
-    md_premium_assistance: 1_350  # md_pct floored to 0 -> full post-APTC premium
+    md_premium_assistance: 1_369.375  # md_pct floored to 0 -> full post-APTC premium
 
 # ---- C1 formula-correction boundary cases (post-COMAR .04B re-derivation) ----
 
diff --git a/policyengine_us/tests/policy/baseline/gov/states/md/mhbe/premium_assistance/md_premium_assistance_eligible.yaml b/policyengine_us/tests/policy/baseline/gov/states/md/mhbe/premium_assistance/md_premium_assistance_eligible.yaml
index 2d039997f57..5b0c042a7f6 100644
--- a/policyengine_us/tests/policy/baseline/gov/states/md/mhbe/premium_assistance/md_premium_assistance_eligible.yaml
+++ b/policyengine_us/tests/policy/baseline/gov/states/md/mhbe/premium_assistance/md_premium_assistance_eligible.yaml
@@ -1,8 +1,12 @@
 # Unit tests for Maryland Premium Assistance eligibility.
 # Eligible when: program in effect (PY2026-2027), household in MD, at least one
-# tax-unit member is federal-APTC-eligible, and ACA MAGI <= 400% FPL.
-# is_aca_ptc_eligible and aca_magi_fraction are provided directly so the gate
-# logic is tested in isolation from the premium-data lookup.
+# tax-unit member is federal-APTC-eligible, and ACA MAGI <= 400% FPL ("No state
+# subsidy above 400% FPL"; PY2027 "400% FPL or below"), on the exact ratio of
+# ACA MAGI to the prior-year guideline, not the truncated aca_magi_fraction.
+# is_aca_ptc_eligible is provided directly so the gate logic is tested in
+# isolation from the premium-data lookup. Supplied-income cases pin the
+# prior-year guideline to $10,000; income-derived cases use the actual 2025
+# one-person guideline, $15,650.
 
 - name: Case 1, MD APTC-eligible unit at 250% FPL in 2026 is eligible.
   period: 2026
@@ -14,7 +18,9 @@
     tax_units:
       tax_unit:
         members: [person1]
-        aca_magi_fraction: 2.50
+        aca_magi: 25_000
+        tax_unit_fpg:
+          2025: 10_000
     households:
       household:
         members: [person1]
@@ -32,7 +38,9 @@
     tax_units:
       tax_unit:
         members: [person1]
-        aca_magi_fraction: 4.01
+        aca_magi: 40_100
+        tax_unit_fpg:
+          2025: 10_000
     households:
       household:
         members: [person1]
@@ -50,7 +58,9 @@
     tax_units:
       tax_unit:
         members: [person1]
-        aca_magi_fraction: 4.00
+        aca_magi: 40_000
+        tax_unit_fpg:
+          2025: 10_000
     households:
       household:
         members: [person1]
@@ -68,7 +78,9 @@
     tax_units:
       tax_unit:
         members: [person1]
-        aca_magi_fraction: 2.50
+        aca_magi: 25_000
+        tax_unit_fpg:
+          2025: 10_000
     households:
       household:
         members: [person1]
@@ -86,7 +98,9 @@
     tax_units:
       tax_unit:
         members: [person1]
-        aca_magi_fraction: 2.50
+        aca_magi: 25_000
+        tax_unit_fpg:
+          2025: 10_000
     households:
       household:
         members: [person1]
@@ -104,7 +118,9 @@
     tax_units:
       tax_unit:
         members: [person1]
-        aca_magi_fraction: 2.50
+        aca_magi: 25_000
+        tax_unit_fpg:
+          2024: 10_000
     households:
       household:
         members: [person1]
@@ -122,7 +138,9 @@
     tax_units:
       tax_unit:
         members: [person1]
-        aca_magi_fraction: 2.50
+        aca_magi: 25_000
+        tax_unit_fpg:
+          2027: 10_000
     households:
       household:
         members: [person1]
@@ -143,7 +161,9 @@
     tax_units:
       tax_unit:
         members: [person1, person2]
-        aca_magi_fraction: 3.00
+        aca_magi: 30_000
+        tax_unit_fpg:
+          2025: 10_000
     households:
       household:
         members: [person1, person2]
@@ -164,7 +184,9 @@
     tax_units:
       tax_unit:
         members: [person1]
-        aca_magi_fraction: 0
+        aca_magi: 0
+        tax_unit_fpg:
+          2025: 10_000
     households:
       household:
         members: [person1]
@@ -182,7 +204,9 @@
     tax_units:
       tax_unit:
         members: [person1]
-        aca_magi_fraction: 3.99
+        aca_magi: 39_900
+        tax_unit_fpg:
+          2025: 10_000
     households:
       household:
         members: [person1]
@@ -202,7 +226,9 @@
     tax_units:
       tax_unit:
         members: [person1]
-        aca_magi_fraction: 2.50
+        aca_magi: 25_000
+        tax_unit_fpg:
+          2026: 10_000
     households:
       household:
         members: [person1]
@@ -256,3 +282,106 @@
         state_code: MD
   output:
     md_premium_assistance_eligible: false  # derived aca_magi_fraction > 4.00 cap
+
+- name: Case 14, $62,599 (399.994% of the 2025 guideline) is eligible.
+  period: 2026
+  input:
+    people:
+      person1:
+        age: 40
+        is_aca_ptc_eligible: true
+    tax_units:
+      tax_unit:
+        members: [person1]
+        aca_magi: 62_599
+    households:
+      household:
+        members: [person1]
+        state_code: MD
+  output:
+    aca_magi_fraction: 3.99
+    md_premium_assistance_eligible: true
+
+- name: Case 15, $62,600 (exactly 400%) is eligible.
+  period: 2026
+  input:
+    people:
+      person1:
+        age: 40
+        is_aca_ptc_eligible: true
+    tax_units:
+      tax_unit:
+        members: [person1]
+        aca_magi: 62_600
+    households:
+      household:
+        members: [person1]
+        state_code: MD
+  output:
+    aca_magi_fraction: 4.00
+    md_premium_assistance_eligible: true
+
+- name: Case 16, $62,600.47 (400.003%) is ineligible though truncated to 4.00.
+  period: 2026
+  input:
+    people:
+      person1:
+        age: 40
+        is_aca_ptc_eligible: true
+    tax_units:
+      tax_unit:
+        members: [person1]
+        aca_magi: 62_600.47
+    households:
+      household:
+        members: [person1]
+        state_code: MD
+  output:
+    aca_magi_fraction: 4.00
+    md_premium_assistance_eligible: false
+
+- name: Case 17, $62,755.56 (400.994%) is ineligible though truncated to 4.00.
+  period: 2026
+  input:
+    people:
+      person1:
+        age: 40
+        is_aca_ptc_eligible: true
+    tax_units:
+      tax_unit:
+        members: [person1]
+        aca_magi: 62_755.56
+    households:
+      household:
+        members: [person1]
+        state_code: MD
+  output:
+    aca_magi_fraction: 4.00
+    md_premium_assistance_eligible: false
+
+- name: Case 18, with the federal credit extended above 400%, 400.003% is still ineligible.
+  # A reform that keeps the premium tax credit above 400% FPL makes
+  # is_aca_ptc_eligible true at $62,600.47, so the Maryland ceiling alone decides.
+  period: 2026
+  input:
+    gov.aca.ptc_income_eligibility[2].amount: true
+    people:
+      person1:
+        age: 40
+        is_medicaid_eligible: false
+        is_chip_eligible: false
+        is_basic_health_program_eligible: false
+        is_aca_eshi_eligible: false
+        is_medicare_eligible: false
+    tax_units:
+      tax_unit:
+        members: [person1]
+        aca_magi: 62_600.47
+        filing_status: SINGLE
+    households:
+      household:
+        members: [person1]
+        state_code: MD
+  output:
+    is_aca_ptc_eligible: [true]
+    md_premium_assistance_eligible: false
diff --git a/policyengine_us/variables/gov/states/md/mhbe/premium_assistance/md_premium_assistance_eligible.py b/policyengine_us/variables/gov/states/md/mhbe/premium_assistance/md_premium_assistance_eligible.py
index a03b288a370..adf29164b54 100644
--- a/policyengine_us/variables/gov/states/md/mhbe/premium_assistance/md_premium_assistance_eligible.py
+++ b/policyengine_us/variables/gov/states/md/mhbe/premium_assistance/md_premium_assistance_eligible.py
@@ -13,17 +13,26 @@ class md_premium_assistance_eligible(Variable):
     reference = (
         "https://regs.maryland.gov/us/md/exec/comar/14.35.21#page=5",
         "https://mgaleg.maryland.gov/meeting_material/2025/hgo%20-%20134051066649659653%20-%20Combined%20MHBE.MIA%20slides_10.16.2025%20briefing%20to%20HGO&Finance.pdf#page=58",
+        # MHBE adopted PY2026 and published PY2027 subsidy parameters.
+        "https://www.marylandhbe.com/wp-content/uploads/2025/08/2026-State-Subsidy-and-Reinsurance-Parameters-8-18-25.pdf#page=30",
+        "https://www.marylandhbe.com/wp-content/uploads/2026/08/2027-Final-State-Subsidy-and-Estimated-Reinsurance-Parameters.pdf#page=25",
     )
     # A tax unit is eligible for Maryland Premium Assistance when the program
     # is in effect, at least one member is eligible for the federal ACA
     # premium tax credit, and household income is at or below the federal
-    # poverty line limit.
+    # poverty line limit, on the exact ratio of ACA MAGI to the prior-year
+    # guideline.
 
     def formula(tax_unit, period, parameters):
         p = parameters(period).gov.states.md.mhbe.premium_assistance
         in_effect = p.in_effect
         # At least one member must be eligible for the federal ACA PTC.
         aptc_eligible = add(tax_unit, period, ["is_aca_ptc_eligible"]) > 0
-        magi_frac = tax_unit("aca_magi_fraction", period)
-        income_eligible = magi_frac <= p.fpl_limit
+        # The MHBE design sets "No state subsidy above 400% FPL" (PY2026) and
+        # "Eligibility: 400% FPL or below" (PY2027). Test the exact ratio, not
+        # the truncated aca_magi_fraction: truncation maps 400.00%-400.99% to
+        # 4.00, which would admit incomes above 400%.
+        magi = max_(tax_unit("aca_magi", period), 0)
+        exact_magi_frac = magi / tax_unit("tax_unit_fpg", period.last_year)
+        income_eligible = exact_magi_frac <= p.fpl_limit
         return in_effect & aptc_eligible & income_eligible