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 subsidies, again depending on how my income compares to the FPL. Can you spell out what that means in dollars?
of Federal Poverty Level
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 2018, the upper income limit for Medicaid eligibility is $16,753, and for a family of four, the upper income limit is $34,638 (here’s the federal website that shows the current year FPL for various family sizes).
In states that have not expanded Medicaid, eligibility for Medicaid has remained unchanged as a result of the ACA, and in most cases, able-bodied adults without dependent children are not eligible for Medicaid regardless of how low their income is.
It’s important to note that Medicaid and CHIP eligibility will 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 2018, the 2017 FPL guidelines are used. And for coverage that will take effect in 2019, the 2018 FPL guidelines will be used.
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 2018, the exchange would first compare the applicant’s income to the 2018 FPL numbers to see if the person is eligible for Medicaid. If they aren’t, the exchange would then compare the applicant’s income to the 2017 FPL numbers to determine subsidy eligibility.
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.
Families USA has a useful FPL page, including dollar amounts up to 400% of FPL for households with up to eight members. Until open enrollment begins for 2019 coverage (in November 2018) that page will show 2017 FPL numbers, which are applicable for people enrolling in 2018 plans.
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
- 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)
- 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.
For plans effective in 2018, 100 percent of the poverty level (for subsidy eligibility) is $12,060, and $24,600 for a family of four (keeping in mind that this is based on the 2017 FPL numbers, which are being used to determine subsidy eligibility for all plans with 2018 effective dates).
And 400 percent of the poverty level is $48,240 for a single individual and $115,120 for a family of five.
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 2018, 250 percent of FPL is $30,1505 for a single individual, $51,050 for a family of three, and $82,400 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.