Marketplace policy number of people in hiusehold

Client and his family is enrolled in Covered California, an ACA marketplace health policy.

There are 4 persons in their policy, client, his wife and two children.

Now their elder kid is enrolled in another health policy so they plan to take that kid out of the policy.The elder kid is still their dependent in the tax return though.

When their premium tax credits are calculated in the tax return next year, is the calculation still based on a household of 4 persons even though now the ACA policy only have 3 persons in it since their elder kid is not in the policy anymore?

Correct, the poverty line calculation on Form 8962 uses the number of people claimed on the tax return (taxpayer, spouse, dependents), regardless of whether some of those people aren't covered by the ObamaCare policy.