How do Medicaid expansion states apply FPL percentages differently for adult Medicaid eligibility?
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Executive summary
Medicaid expansion under the Affordable Care Act set a federal income floor for adult eligibility using a MAGI-based standard of 133% of the Federal Poverty Level with a statutory 5 percentage‑point income disregard—effectively 138% FPL—for most adults in states that adopted expansion [1] [2]. States, however, retain room to vary how they implement that floor: some abide by the 138% threshold, a few set higher limits for specific adult groups, others use prior or partial approaches that produce lower cutoffs and a persistent coverage gap [3] [2] [4].
1. How the federal floor became “133% plus 5% = 138%” and why that matters
The ACA’s statutory text extended Medicaid eligibility to non‑elderly adults with incomes at or below 133% of the FPL, but federal rules allow a uniform 5% income disregard, which administrative practice turns into an effective 138% eligibility threshold for MAGI‑based adults in expansion states [1] [2]. That single MAGI measurement replaced many prior state‑level disregards and deductions, standardizing income counting for most adults and making the FPL percentage the primary determinant of eligibility in expansion states [1].
2. Most expansion states apply the 138%/MAGI rule for adults, but not all expansions look identical
In the vast majority of states that adopted the ACA expansion, adults under age 65 qualify for Medicaid if household income is up to roughly 138% of the FPL, and eligibility is based on income alone rather than family status or disability [5] [6] [7]. Yet some expansion adopters go further: as documented historically, jurisdictions such as the District of Columbia and Connecticut have set higher thresholds for certain parent or adult groups well above the ACA minimum, demonstrating that states can and do layer on more generous rules [3].
3. Partial expansions, waivers, and state workarounds produce different FPL cutoffs
Not every state that increased adult coverage tied eligibility to the same FPL percentage. Prior waivers and state choices—Wisconsin’s approach, for example—resulted in coverage for adults at 100% FPL without adopting the federal 138% expansion and thus without receiving the same federal expansion funding, creating a functional but different eligibility regime [2] [8]. States can use waivers or traditional state plan options to cover parents and adults at various percentages of FPL, so a state’s label as an “expansion” state does not guarantee identical FPL cutoffs across all adult subgroups [9].
4. Non‑expansion states and the “coverage gap” underscore the practical impact of differing FPL rules
Where states declined full expansion, many low‑income adults fall into a coverage gap: their incomes are too high for the state’s pre‑ACA Medicaid rules but below the threshold for Marketplace premium tax credit subsidies (the 100% lower bound for credits), leaving those adults uninsured despite being below the federal expansion threshold [4] [7]. This gap is a direct consequence of state variation in applying FPL percentages for adult eligibility.
5. Technical differences: MAGI accounting, income disregards, and non‑MAGI programs
The ACA moved most adult eligibility to MAGI calculations and eliminated state‑specific asset or income disregards for those groups, other than the general 5% income disregard that raises the practical threshold to about 138% FPL [1]. But Medicaid contains other eligibility pathways—pregnancy categories, disability‑based coverage, and long‑term care—that may rely on different percentages of FPL, SSI multiples, or asset tests rather than the MAGI/FPL formula, so “what percent of FPL” applies depends on the specific adult pathway [9] [7].
6. Political and fiscal dynamics shape FPL choices — and the messages states send
States’ decisions about which FPL percentage to adopt are as much political and fiscal as technical: adopting expansion locks in federal support and increases coverage statistics, while rejecting it can be framed as budget conservatism or ideological resistance, even though federal incentives and waiver options exist [8] [4]. Advocacy and administrative priorities explain why some states broaden eligibility beyond 138% for specific groups, while others hold to lower thresholds or partial expansions.
Conclusion: a common federal benchmark but a fragmented state map
The net result is a common federal benchmark—133% FPL plus the standardized 5% disregard yielding about 138%—that governs eligibility for adults in most expansion states, but the application differs in practice because states can set higher thresholds for certain groups, retain older pathways, use waivers, or decline expansion altogether, producing a patchwork of FPL‑based cutoffs and real coverage differences [1] [2] [4].