How is the Federal Poverty Level used to determine Medicaid, CHIP, and ACA subsidy eligibility in 2025?
Executive summary
The 2025 Federal Poverty Level (FPL) is the baseline used across programs: Medicaid/CHIP eligibility commonly uses 138% of FPL for adults in expansion states (e.g., $21,597 for a single person at 138% in 2025), while ACA premium tax credits generally apply to households from 100% up to historically 400% (with temporary policy changes affecting the cap through 2025) [1] [2] [3]. States and programs vary how they count income, round thresholds, and apply additional rules, so the same FPL percentage can translate into different actual eligibility outcomes depending on location and program [4] [5].
1. How the FPL functions as the universal yardstick
The Department of Health and Human Services publishes annual poverty guidelines that serve as the numeric baseline for many federal and state programs; states, Medicaid, CHIP, and the ACA Marketplace use those guideline numbers (which differ for Alaska and Hawaii) as the starting point to set income thresholds expressed as percentages of the FPL [4] [6]. Each program then applies its own rules about which income is counted and how to round multiples of the guideline when deciding eligibility [4].
2. Medicaid and CHIP: the 138% threshold in practice
In states that expanded Medicaid under the ACA, adults under age 65 generally qualify for Medicaid if household income is up to 138% of the FPL — the statutory 133% figure becomes effectively 138% because of income-counting rules — and that standard is routinely quoted for 2025 eligibility (for example, 138% = $21,597 for an individual using the 2025 guideline math) [7] [1]. In non‑expansion states, Medicaid income limits are often much lower or limited to specific groups; states retain authority to set different CHIP and Medicaid thresholds, so children’s coverage often extends to higher percentages of FPL (commonly around 200% or more in many states) [8] [1].
3. ACA premium tax credits and cost‑sharing reductions: the subsidy band
The Marketplace premium tax credits are tied to income measured as a percentage of the FPL and traditionally applied to households between 100% and 400% of FPL; cost‑sharing reductions (CSRs) have historically targeted 100%–250% of FPL [2] [3]. From 2021 through 2025, special federal actions temporarily removed or altered the 400% cliff for premium credits — making subsidies available above 400% where they were needed to cap benchmark plan costs — but those enhancements are time‑limited and subject to legislative change [9] [3]. For 2025 decisions, HealthCare.gov and other guides use the relevant year’s guidelines to calculate subsidy eligibility for coverage year rules [2] [10].
4. Measurement: MAGI, months vs. annual income, and rounding
Eligibility across Medicaid, CHIP, and ACA subsidies generally relies on Modified Adjusted Gross Income (MAGI) rules for counting household income for most applicants; programs may allow monthly or annual income comparisons and apply a 5% income disregard or other technical adjustments, which can shift someone near a threshold into or out of eligibility [8] [4] [2]. ASPE notes that programs differ in how they round and define the eligibility unit, so the same MAGI can produce different outcomes across programs even when both use the FPL [4].
5. State variation and the coverage gap
Because non‑expansion states set narrower Medicaid eligibility, people with incomes below 100% FPL in those states may fall into a coverage gap: too poor for Marketplace subsidies (which typically require at least 100% FPL) but not eligible for Medicaid under state rules — a dynamic documented by policy trackers and briefs [10] [9]. KFF and other state‑level data sources track these variance patterns (p1_s9 describes state-level tracking, though the provided excerpt is dated later).
6. Practical examples and dates to watch
Practical calculations use the published 2025 guideline number multiplied by the relevant percentage (e.g., 1.38 × the guideline = 138%) and rounding rules to set dollar cutoffs; published examples include $21,597 (individual at 138%) and $44,367 (family of four at 138%) for 2025 in some summaries [1]. Note that Marketplace subsidy calculations for a given coverage year may use the prior year’s poverty guidelines (e.g., 2025 coverage may use 2024 guidelines in some administrative practices), and temporary policy changes through 2025 affect subsidy caps — watch for changes in early 2026 guidance [6] [10].
7. Limits of available reporting and competing perspectives
The sources agree on the central role of the FPL and the common thresholds (100%, 138%, 250%, 400%) but differ on policy details and timing: some explain temporary subsidy expansions through 2025; others note reversion risks in 2026 [3] [9] [6]. Exact dollar cutoffs vary by state (Alaska/Hawaii higher) and by whether a program uses current-year or prior-year guidelines for a coverage year; state-administered Medicaid/CHIP rules introduce additional complexity [4] [6]. Available sources do not mention any 2025 federal rulemaking beyond these timing and temporary subsidy notes.
Bottom line: The 2025 FPL is the numeric baseline that federal and state programs convert into eligibility thresholds (e.g., 138% for Medicaid expansion, 100%–400% for Marketplace subsidies), but final eligibility depends on program rules, MAGI calculations, state decisions (expansion vs. non‑expansion), and temporary federal subsidy policies that have been in effect through 2025 [1] [2] [3].