Were there state-by-state differences in subsidy eligibility before 2021?
Executive summary
Before 2021, eligibility for ACA premium tax credits generally required household income between 100% and 400% of the federal poverty level (FPL), with a higher effective lower bound (about 138% FPL) in states that expanded Medicaid because people below that threshold were typically covered by Medicaid [1] [2]. Outside the health-insurance context, other federal subsidy programs — notably child-care subsidies — explicitly allow states to set tighter income and other eligibility rules, meaning state-by-state variation in who actually qualifies existed in those programs as well [3] [4].
1. Subsidy rules for ACA marketplace coverage: a federal floor, not a state-by-state patchwork
The Affordable Care Act created a federal standard for premium tax credit eligibility: households with incomes between 100% and 400% of FPL could qualify under pre‑2021 rules [1] [5]. That is a national rule applied through the federal and state Marketplaces rather than a menu of widely divergent state tests. Health-insurance coverage availability below those thresholds was largely determined by whether a state expanded Medicaid — in expansion states Medicaid generally covered adults under roughly 138% of FPL, so subsidy eligibility effectively began above that level in those states [1] [2].
2. Medicaid expansion created practical state differences at the low end
Because the Supreme Court made Medicaid expansion optional for states, some states did not expand, and those states left a coverage gap for adults below Medicaid eligibility who nonetheless fell below 100% of FPL and therefore could not access marketplace subsidies [2]. Sources describe this as a structural reason why the effective income floor for premium tax-credit eligibility differed by state: in expansion states the practical subsidy-eligible population began above about 138% of FPL; in non‑expansion states the interaction of Medicaid rules and marketplace rules produced different outcomes for the lowest-income adults [1] [2].
3. The 400% cap and the post‑2020 policy shock
The upper-income cap of 400% FPL was a nationwide limit before 2021; it was removed temporarily for 2021–2025 by the American Rescue Plan and extended by later legislation, so the most visible national change reduced the pre‑2021 income cliff rather than introducing state variation [5] [2]. Thus the major eligibility change after 2020 was federal and uniform in scope: it widened availability across states rather than creating new state-by-state differences [5].
4. Other federal subsidies — states have broader discretion
Not all “subsidies” operate like the ACA premium tax credit. Child-care subsidies under the Child Care and Development Fund (CCDF) are federally funded but administered by states, and most states set income limits below the federal maximum; GAO and HHS reporting found that “fewer families qualify for subsidies under state rules than under federal rules” and that states exercise “substantial flexibility” in who they serve [3] [4]. In short, for child care the variation was explicit and expected: states set stricter income limits and other criteria, producing wide state-to-state differences in eligibility and receipt [3].
5. How to read these differences: federal rule vs. state implementation
For marketplace premium tax credits pre‑2021, the law established a national eligibility band (100–400% FPL) with the Medicaid expansion decision creating a predictable way states altered the effective lower bound [1] [2]. For other subsidy programs such as CCDF child-care assistance, federal rules set a maximum but delegated considerable discretion to states, and GAO reporting documents that most states used that discretion to set stricter eligibility standards [3] [4].
6. Limitations, gaps and what the sources do not say
Available sources explain ACA marketplace eligibility rules and the Medicaid‑expansion effect [1] [2] and document state discretion in child-care subsidies [3] [4]. The provided reporting does not offer a comprehensive, state-by-state table showing exactly how every state’s pre‑2021 rules differed for each subsidy program; those granular maps are not found in current reporting supplied here. Also not found in the provided sources: any detailed breakdown of state choices that modified ACA premium-credit calculations beyond Medicaid expansion or descriptions of state‑level supplemental subsidies (except California’s later state programs referenced in other excerpts outside the pre‑2021 scope) (p1_s8; [6] are future/after-2021 context and not used here).
7. Bottom line for readers
If you mean ACA premium tax credits specifically, pre‑2021 eligibility was set by a federal 100–400% FPL rule and did not vary by state law — but Medicaid expansion choices by states changed the practical lower eligibility boundary [1] [2]. If you mean other federal subsidies (for example, CCDF child-care assistance), states commonly set stricter limits and rules so eligibility varied materially from state to state [3] [4].