My eligibility for Medicaid depends on how my income compares to 138 percent of the Federal Poverty Level. Can you spell out what that means in dollars?

Q.  I know that whether I qualify for expanded ­Medicaid depends on whether my income is less than 138 percent of the Federal Poverty Level (FPL). I also understand if I earn too much to qualify for Medicaid, I can buy insurance in the exchange, where I may be eligible for premium subsidies (premium tax credits), again depending on how my income compares to the FPL. Can you spell out what that means in dollars?

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A.  First, in states that have expanded Medicaid you will qualify for Medicaid if you earn up to 138 percent of the FPL. For a single individual in 2020, the upper income limit for Medicaid eligibility is $17,608, and for a family of four, the upper income limit is $36,156 (here’s the federal website that shows the current year FPL for various family sizes). Regardless of where you live, if you qualify for Medicaid or CHIP, you will not qualify for premium subsidies.

Medicaid eligibility depends on whether your state has expanded Medicaid under the ACA

In states that have not accepted federal funding to expand Medicaid, eligibility for Medicaid has remained unchanged despite the ACA, and in most cases, able-bodied adults without dependent children are not eligible for Medicaid regardless of how low their income is. In states that have not expanded Medicaid, eligibility for premium subsidies in the exchange starts at 100 percent of the poverty level, whereas it starts above 138 percent of the poverty level in states that have expanded Medicaid. So a person who earns 120 percent of the poverty level would qualify for Medicaid in some states and for premium subsidies in others.

As of late 2020, there are 14 states that have not expanded Medicaid under the ACA. But one of them (Wisconsin) does provide Medicaid coverage to able-bodied non-elderly adults with income up to the poverty level, two of them (Oklahoma and Missour) will expand Medicaid as of mid-2021, and one of them (Georgia) will partially expand Medicaid in mid-2021, following the same general protocol that Wisconsin already uses, albeit with a Medicaid work requirement as well.

Medicaid/CHIP eligibility is based on current FPL guidelines; premium tax credit eligibility is based on the prior year’s FPL guidelines

It’s important to note that Medicaid and CHIP eligibility start to be determined based on the most recent FPL guidelines as soon as they’re published (usually in January each year). But eligibility for premium subsidies in the exchange is based on the prior-year FPL guidelines. So for coverage that is effective in 2021, the 2020 FPL guidelines are used to determine premium subsidies, both during open enrollment (which takes place in 2020) and for special enrollment periods throughout 2021. But for Medicaid/CHIP eligibility, the new 2021 poverty level numbers will start to be used once they’re published in early 2021.

Premium tax credit eligibility

If you buy insurance in the state marketplaces – or exchanges – you may be eligible for tax credits (subsidies) that help you cover premiums. The tax credits are available if

  • you’re not eligible for Medicaid or CHIP. It’s important to note that children are eligible for Medicaid or CHIP at much higher household incomes than the Medicaid eligibility limits for adults. So it’s common to see households where the kids are eligible for Medicaid or CHIP, while the parents are eligible for premium tax credits instead. If the family chooses to enroll the kids along with the parents on the private plan in the exchange, they have to pay full price for the kids’ coverage, since they could have enrolled in Medicaid or CHIP instead.
  • your income is at least 100 percent of the poverty level but not more than 400 percent of FPL (if the unsubsidized premiums are low enough, subsidy eligibility will end below 400 percent of FPL). For plans effective in 2021, the upper income limit for subsidy eligibility is $51,040 for a single person, and $104,800 for a family of four. And again, the lower income threshold for premium subsidy eligibility is higher in states where Medicaid has been expanded, since a household has to earn more than 138 percent of the poverty level in those states in order to be ineligible for Medicaid (and thus eligible for premium subsidies).
  • you don’t have access to affordable employer-sponsored health insurance that provides minimum value (it’s important to understand the family glitch in this scenario).

So in states that have expanded Medicaid, subsidy eligibility starts at 139 percent of the poverty level (ie, above the cutoff for Medicaid eligibility, which is 138 percent of FPL), while in states that haven’t expanded Medicaid, subsidy eligibility starts at 100 percent of the poverty level.

In all cases, the exchange first checks to see if applicants are eligible for Medicaid. Subsidy eligibility is only determined if and when the exchange has determined that the applicant is not eligible for Medicaid. So if a person applies for coverage during a special enrollment period in July 2021, the exchange would first compare the applicant’s income to the 2021 FPL numbers to see if the person is eligible for Medicaid or CHIP. If they aren’t, the exchange would then compare the applicant’s income to the 2020 FPL numbers to determine subsidy eligibility.

Obamacare subsidy calculator

Use our calculator to estimate how much you could save on your ACA-compliant health insurance premiums.

This system is used because open enrollment happens near the end of the year, for coverage effective the following year — but the FPL numbers for the following year aren’t yet available at that point. And although they become available early in the year, the exchanges don’t switch to those new numbers until the next open enrollment period, so that everyone with coverage effective in a given year will have their subsidy eligibility based on the same FPL numbers.

Cost-sharing subsidies

In addition, if your income is above 138 percent of FPL (or at least 100 percent of FPL in states that haven’t expanded Medicaid) and also doesn’t exceed 250 percent of the FPL, you will be eligible for cost-sharing subsidies if you buy a silver plan in the exchange in your state. Cost-sharing subsidies reduce the maximum out-of-pocket costs for the health plan, and also lower the deductibles and copays that you’ll have to pay if you need care. For a description of how this subsidy works, see this overview of cost-sharing subsidies and this update about cost-sharing subsidies and the Trump Administration.

For coverage effective in 2021, 250 percent of FPL is $31,900 for a single individual, $54,300 for a family of three, and $87,900 for a family of six.


Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.

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Jane Groenhoff

I work in a restaurant and income Is different weekly. My 2019income tax return was 16944 do I still qualify for Medicaid

Jane, your eligibility depends on the state where you live. If you visit this page https://www.healthinsurance.org/medicaid/ and click on your state, you should find eligibility requirements, as well as a contact number for your state agency (which can tell you definitively whether you’re eligible).

Kendra Sanchez

i am a single mom of two and my weekly income is $550. can i qualify for insurance?

Kendra, you can use this calculator to determine whether you’re eligible for a premium subsidy here: https://www.healthinsurance.org/obamacare/subsidy-calculator/. You can also find out about your eligibility for Medicaid and CHIP by clicking on your state here: https://www.healthinsurance.org/medicaid/ Eligibility guidelines are on the top right side of each state page.

Aida

What is the most a single person with one child can earn in a year to have just the child on medicaid in NY?

There’s information about eligibility on this page … https://www.healthinsurance.org/new-york-medicaid/ … and also a contact number for New York Medicaid.

Portia Wallenberg

Do I qualify for Medicaid ?

The answer is that it may depend on the state where you live. Click on your state here to see the eligibility guidelines for that state: https://www.healthinsurance.org/medicaid/

KENT ATHEN

How do I get Medicaide ? I’m at 159%
I am out of work at the end of June as they aren’t having me come back. I was a para professional at a HS

Nora Fields

I’m currently on medicaid, I got a job offer part time but I’m staying with a friend and currently have no bills so my question is if I take the part time job will it be taking away? I have alot of health issues so I really need medicaid.

If you’re in a state that has expanded Medicaid and your current eligibility is based solely on your income, you can earn up to 138% of the poverty level and still be eligible for Medicaid. For a single person in the lower 48 states, that amounts to about $17,600 in income in 2020. If your eligibility is based on the ACA’s expansion of Medicaid, it doesn’t matter what your bills or financial obligations are, since that system only considers income (if you’re enrolled under a “medically needy” program, your financial obligations could be taken into consideration: https://www.medicaid.gov/medicaid/eligibility/index.html ) Medicaid coverage… Read more »

Christine

I am also currently on Medicaid.If my income right now
above the Medicaid eligibility threshold . Can I contribute to traditional IRA by the tax return time to lower the MAGI to the Medicaid eligibility level? That way I can keep the Medicaid.

Marilyn Fowler

A 90 yr old in a nursing home and on Medicaid in Illinois has inherited some money. How does that affect her eligibility for Medicaid in Illinois?

Josh Schultz

It very well could make her ineligible for Medicaid. She should ask an elder law attorney or the legal aid society for advice as soon as possible! We have links to help you find an elder attorney at the bottom of this page: https://www.medicareresources.org/states/illinois-guide-content/

Craig Dane

How long do you have to be a MI. resident to qualify for Medicaid expansion benefits? Is “household income” a factor or not? I live with non-family. I may be moving back to MI. from GA.

You’d need to contact the Michigan Medicaid office. https://www.healthinsurance.org/michigan-medicaid/

Antonette A HAYDEN

Hi my cousin has dementia and is in need of Medicaid he has Medicare benefits…

Josh Schultz

Hi Antonette,

You can click on your cousin’s state on this map to learn more about applying for Medicaid benefits: https://www.medicareresources.org/financial-help-by-state/

Thanks,
Josh

Julie A Hartzell

I was on SSI. When my ex died i started receiving his SSA because his was largest of the two. They dropped my SSI because of the SSA. My question i turn 65 in march 2021 can i keep the medicade? I become legible for the mediCare in March?i

Julie, When you say SSA, do you mean that you’re now receiving your ex’s Social Security retirement income? And are you still eligible for Medicaid now, just based on income? If so, the rules for Medicaid eligibility do change once a person is 65, as the option for Medicaid eligibility based only on income only goes through age 64. For people age 65 and older, there are also rules regarding assets, and there are various programs that have different income limits. You can click on your state on this map to see what will be available from the Medicaid program… Read more »

Maryellen Belton

I am eligable for the $144.00 to get back in my SSA check

Maryellen,
Are you referring to the $144.60/month that’s deducted to pay for Medicare Part B? That will increase slightly, to $148.50/month in 2021. If you’re struggling to afford the Part B premium, there may be help available via your state’s Medicaid office. Here’s more information about that: https://www.medicareresources.org/faqs/is-there-help-for-me-if-i-cant-afford-medicares-premiums/