Federal Poverty Level and Medicaid: How Income Thresholds Actually Work

Why the Federal Poverty Level Exists — and How Medicaid Uses It

Every year, families across the country apply for Medicaid and face a deceptively simple-sounding question: does your income fall below the limit? To answer it, you first need to understand what that limit is actually measuring — and that starts with the Federal Poverty Level.

The FPL was first developed in the 1960s by economist Mollie Orshansky, who estimated the minimum food budget a family needed and multiplied it by three (since food was roughly a third of a typical household's expenses at the time). While the methodology has been updated, the concept remains: it's a single income figure, adjusted for household size, that the federal government uses as a poverty benchmark.

Medicaid doesn't use a flat dollar-amount cutoff. Instead, it expresses eligibility in terms of what percentage of the FPL your household income represents. You'll see phrasing like "138% of the Federal Poverty Level" or "100% FPL" throughout program rules. This approach lets the same policy framework automatically adjust for both household size and annual inflation without requiring Congress to update specific dollar figures each year.

For consumers, this means two things: first, you need to know your household's income as a percentage of the FPL — not just a raw dollar amount — to understand where you stand. Second, the relevant percentage threshold depends heavily on which state you live in and which Medicaid category you're applying under. See our full breakdown of Medicaid eligibility categories to understand how categories affect your threshold.

The Actual FPL Numbers: What They Look Like in 2024

For the 48 contiguous states and Washington D.C., the 2024 Federal Poverty Level guidelines set the following income amounts. Keep in mind that Medicaid programs typically use the guidelines in effect at the time of application, and annual updates happen in January.

For each additional person beyond six, add $5,380 per year to the 100% FPL figure, then calculate the relevant percentage from that base. Alaska's FPL is approximately 25% higher than the standard guidelines, and Hawaii's is about 15% higher.

Understanding where your income falls on this table is just the starting point. The percentage threshold that applies to you depends on your state, your age, whether you're pregnant, whether you have a disability, and other categorical factors we'll explore below.

How State Expansion Status Changes Everything

One of the most consequential decisions a state can make about Medicaid is whether to expand the program under the Affordable Care Act (ACA). This single policy choice determines what FPL percentage applies to working-age adults without disabilities — the largest group of potential Medicaid applicants.

Expansion States

As of 2024, 40 states plus Washington D.C. have adopted the ACA Medicaid expansion. In these states, nearly all adults under age 65 with household incomes up to 138% of the FPL are eligible for Medicaid, regardless of whether they have children or a disability. This created a unified adult eligibility threshold that didn't previously exist.

Non-Expansion States

In the 10 states that haven't expanded Medicaid, the rules remain much closer to the pre-ACA structure. Eligibility for adults is typically limited to specific categories: parents of dependent children (often at very low FPL percentages, sometimes as low as 17–38% FPL), pregnant women, people with disabilities, and the elderly. A childless adult earning $12,000 per year might qualify for nothing in a non-expansion state, even though their income is below the FPL.

This creates what policy analysts call the "coverage gap" — people who earn too much to qualify for traditional Medicaid but too little to receive ACA Marketplace subsidies (which begin at 100% FPL). If you're in a non-expansion state, it's worth checking whether your state legislature has voted on expansion recently, as the political landscape has continued shifting.

FPL Percentages by Medicaid Category

Even within a single state, different groups of people face different FPL thresholds. Medicaid was originally designed as a categorical program — meaning you had to belong to a specific group (parents, pregnant women, people with disabilities) to qualify. That structure still matters in non-expansion states and for some groups even in expansion states.

Here's how income thresholds typically break down by category, though exact percentages vary by state:

Children (CHIP and Medicaid)

Most states cover children through a combination of Medicaid and the Children's Health Insurance Program (CHIP) up to at least 200% FPL. Many go higher — some states cover children up to 300% or even 400% FPL through CHIP.

Pregnant Women

Federal minimums require states to cover pregnant women to at least 133% FPL. Many expansion states cover them to 200% FPL or higher, and some states have adopted 200–300% FPL thresholds through state plan amendments.

Parents and Caretaker Relatives

In expansion states, parents are covered under the general adult expansion at 138% FPL. In non-expansion states, thresholds for parents can be dramatically lower — the median is around 40% FPL.

Adults Without Children (Childless Adults)

Only covered in expansion states, up to 138% FPL. In non-expansion states, this group typically has no Medicaid pathway unless they have a qualifying disability.

People with Disabilities

Eligibility rules are more complex and often tied to SSI (Supplemental Security Income) eligibility. Some states use 74% FPL; others allow higher income with spend-down provisions.

Elderly (Age 65+)

Medicaid for seniors who also receive Medicare (dual-eligible) may have income thresholds at or near 100% FPL, with asset tests also applying.

“The Federal Poverty Level isn't a measure of who's struggling — it's an administrative tool. Medicaid eligibility is ultimately a policy decision about how far above that line a state is willing to extend coverage.”

— Sara Rosenbaum, Health law and policy professor, George Washington University Milken Institute School of Public Health

Understanding which category applies to your situation is just as important as knowing your income. For a detailed look at how household composition affects which threshold applies to you, see our article on how Medicaid counts household size.

How MAGI Works: The Income Calculation Medicaid Uses

Knowing your FPL threshold is only useful if you know what income Medicaid actually counts toward that threshold. Since the ACA, most Medicaid programs have used a calculation called Modified Adjusted Gross Income, or MAGI. This replaced the older net income tests and asset tests for most (but not all) applicants.

What MAGI Includes

• Wages, salaries, and tips
• Self-employment income (after business expenses)
• Unemployment compensation
• Social Security benefits for most households (when total income exceeds certain IRS thresholds)
• Taxable interest, dividends, and capital gains
• Rental income
• Alimony received (for agreements finalized before January 1, 2019)

What MAGI Excludes

• Child support received
• Gifts and inheritances
• Supplemental Security Income (SSI) payments
• Workers' compensation
• Veteran's benefits (most types)
• Most non-taxable Social Security income (for households where total income is below IRS thresholds)

One important point: MAGI does not subtract standard deductions or itemized deductions. It starts from Adjusted Gross Income (your gross income minus certain above-the-line deductions like student loan interest and IRA contributions) and then adds back certain items. For most wage earners, MAGI is very close to their gross income from work.

For elderly and disabled applicants in some legacy Medicaid categories, the older income and asset tests still apply. These groups may also face spend-down rules where deductible medical expenses can bring countable income below the eligibility threshold. Always confirm which income methodology applies to your specific category.

Real Scenarios: Putting FPL Percentages Into Practice

Abstract percentages become much clearer when you apply them to realistic situations. The examples below illustrate how the FPL framework plays out differently depending on state, household, and income type.

These scenarios show why knowing your state's expansion status and your household category is essential before assuming you do or don't qualify. The same income and family situation can mean full Medicaid coverage in one state and no coverage in another.

If your income is just above the Medicaid threshold, you may qualify for premium tax credits on the ACA Marketplace. Understanding how premiums and deductibles work in those plans will help you compare them against Medicaid's benefits.

How to Find Your State's Exact Thresholds

Because Medicaid rules vary so substantially by state, the most reliable approach is to go directly to state-specific sources once you understand the federal framework. Here are the most effective ways to find your exact threshold:

1. HealthCare.gov pre-screening tool: The federal marketplace site includes a screening tool that asks for state, household size, ages, and income and gives you a preliminary assessment of Medicaid likelihood.
2. Your state Medicaid agency website: Search for " Medicaid eligibility" and look for the official state agency page. Most publish income limits tables by category and household size.
3. Benefits.gov: This federal site aggregates benefit eligibility information and links to state-specific application portals.
4. Local navigators and enrollment assisters: ACA-funded navigators and certified application counselors provide free help with Medicaid applications and can clarify state-specific rules. Find them at LocalHelp.HealthCare.gov.
5. 211 helpline: Calling or texting 211 connects you to local social services referrals, including Medicaid enrollment help.

When you contact your state Medicaid office, be prepared to specify your household size, your total monthly or annual income from all sources, and whether you're applying in a specific category (such as pregnant, parent, or disabled). These details allow the eligibility worker to apply the correct FPL threshold to your situation.

Don't assume you don't qualify because your income feels "too high." Many people are surprised to find they're below the 138% FPL threshold in expansion states, especially once they account for their full household size. Applying costs nothing, and the worst outcome is a denial with an explanation of what would change your eligibility.

When Income Changes: Reporting Requirements and Coverage Continuity

The FPL-based eligibility system doesn't just affect whether you're initially approved — it also governs whether your coverage continues. Medicaid enrollees in most states are required to report certain changes in income and household size during the year, and states are required to conduct annual renewals (called "redeterminations").

What Changes Trigger a Reporting Requirement

Most state Medicaid programs require you to report changes within 10 to 30 days, depending on the state. Common triggers include:

• Starting a new job or significant increase in hours or pay
• Loss of employment
• Changes in household size (a new baby, someone moving in or out, a marriage or divorce)
• Changes in other income sources (starting to receive Social Security, unemployment ending, etc.)

Annual Redeterminations

Each year, your state Medicaid agency is required to review your eligibility. After the COVID-19 continuous enrollment protections ended in 2023, states resumed routine redeterminations. If your income has risen above the threshold or your household size has changed in a way that affects your FPL percentage, you may lose coverage at renewal.

If you receive a notice that your Medicaid coverage is ending, you typically have a right to appeal and a special enrollment period to sign up for ACA Marketplace coverage — so do not ignore these notices. Acting quickly protects your continuous access to care.

Being proactive about reporting income changes — especially increases — can also prevent overpayment issues. In some cases, if you received Medicaid while technically ineligible due to an unreported income change, the state may seek to recover costs. Staying current with your reporting obligations protects both your coverage and your finances.