federal poverty level (FPL)

What is the federal poverty level (FPL)?

The federal poverty level (FPL) is commonly used to refer to the federal poverty guidelines that HHS issues each year. (Although HHS notes that “federal poverty guidelines” is actually the correct terminology, and that “federal poverty level” should be avoided, the latter tends to be more frequently used.)

It’s specified as an income amount that is used to determine eligibility for various income-based public programs, such as Medicaid, health insurance premium tax credits, and cost-sharing reductions. The specific dollar amount varies based on the number of people in the household and whether the household is in Alaska, Hawaii, or the continental U.S.

How is the FPL used in healthcare?

The federal poverty level is used to determine

• eligibility for Medicaid and CHIP (the Children’s Health Insurance Program);
• eligibility for ACA premium tax credits and cost-sharing reductions (subsidies); and
• eligibility for Medicare Savings Programs (MSPs) and the Low-Income Subsidy for Medicare Part D.

Medicaid and CHIP:

• In states that have expanded Medicaid, adults under the age of 65 will qualify for Medicaid if they earn up to 138% of the FPL. (Note that although you’ll often see this written as 133%; there’s a 5% income disregard that effectively brings it up to 138%.)
• Children and people who are pregnant are eligible for Medicaid or CHIP at higher income levels; the specific thresholds vary by state.
• In states that haven’t expanded Medicaid, the eligibility guidelines are stricter, with much lower income limits for parents and coverage generally not available at all to non-disabled childless adults, regardless of how low their income is. This creates a coverage gap that exists in 11 states as of early 2023 (this will change later in 2023; South Dakota will expand Medicaid as of July 2023, and Georgia plans to partially expand Medicaid as of July 2023, albeit with a work requirement).
• For people who are disabled or 65+, Medicaid eligibility also depends on assets (varies by state; click on a state on this map to see details).
• CHIP eligibility is also based on the federal poverty level, but the specific thresholds vary from one state to another.
• For Medicaid and CHIP eligibility determinations, the current year’s federal poverty level numbers are used (and are compared with the household’s current monthly or annual income — enrollees can use either one). The poverty level numbers are updated by HHS each year in mid-late January, although many states wait until April to begin using them for Medicaid eligibility determinations (states can start using them sooner than that; Oregon switches over to the new numbers on March 1, for example). Consumer advocates have noted that for 2023, it would be beneficial for consumers if states prioritize a transition to the updated 2023 FPL numbers before Medicaid eligibility redeterminations and disenrollments resume in April 2023 for people who are no longer eligible for the program.

Premium tax credits:

• For premium tax credit eligibility determinations, the prior year’s FPL numbers are used, and are compared with the applicant’s projected total annual income for the year the coverage will be in force. So for a plan with a 2023 effective date, the household’s projected total 2023 income is compared with the 2022 poverty level numbers.
• If you’re in a state that has expanded eligibility for Medicaid, premium tax credit (premium subsidy) eligibility in the marketplace/exchange starts above 138% of the federal poverty level (ie, where Medicaid ends). It used to end at 400% of the poverty level (or lower, if the coverage was already considered affordable without a subsidy) but the American Rescue Plan temporarily eliminated that income limit, and the Inflation Reduction Act has extended that provision through 2025. So for the time being, premium tax credits are available regardless of income, if the cost of the benchmark plan would otherwise be more than 8.5% of the household’s income.
• If you’re in a state that has not expanded Medicaid (there are 12 states that have not expanded Medicaid as of early 2023, although South Dakota will expand Medicaid as of mid-2023 and Georgia plans to partially expand Medicaid in mid-2023), premium tax credit eligibility starts at 100% of the federal poverty level. And as is the case in the rest of the states, there is not an upper income limit for premium subsidy eligibility through 2025. So a person who earns 120% of the poverty level would qualify for Medicaid in some states (ie, states that have expanded Medicaid) and for premium subsidies in others (ie, states that have not expanded Medicaid).
• 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.
• If you’re a recent immigrant who is not eligible for Medicaid due to your immigration status, eligibility for federal premium tax credits extends down to 0% of the poverty level.
• Use our calculator to estimate how much you could save on your ACA-compliant health insurance premiums.

Cost-sharing reductions:

• Cost-sharing reductions are available to marketplace/exchange enrollees who select Silver plans and whose household income doesn’t exceed 250% of the FPL. But cost-sharing reductions are strongest for households with income that doesn’t exceed 200% of the poverty level.
• As is the case with premium tax credits, the household’s projected income is compared with the prior year’s poverty level numbers to determine eligibility for cost-sharing reductions.
• As is the case for premium tax credits, the lower eligibility threshold is 100% of the poverty level in states that have not expanded Medicaid, and above 138% in states that have.
• For coverage effective in 2023, 250% of the federal poverty level in the continental U.S. is $33,975 for a single individual, $57,575 for a family of three, and $92,975 for a family of six. (The amounts are higher in Alaska and Hawaii, since they have higher federal poverty levels).

Medicare Savings Programs and Part D Low-Income Subsidy:

• Medicare beneficiaries with limited financial means can qualify for Medicare Savings Programs, with eligibility that depends on income being within a specified percentage of the FPL, as well as asset limits.
• The Medicare Part D Low-Income Subsidy (Extra Help) is available either partially or in-full, depending on income (relative to the poverty level) and assets. As of 2024, under the Inflation Reduction Act, people who were previously eligible only for partial Extra Help will be eligible for full Extra Help.