If you finish reading this short article “What is the Federal Poverty Level“, you will know how to calculate your level so that you know if you can qualify for certain government programs.
Every year the Department of Health and Human Services (HHS) releases new Federal poverty levels. Federal poverty levels are used to determine your eligibility for certain programs and benefits, including savings on Marketplace health insurance, Medicaid and CHIP coverage.
The following chart shows you the current levels. These numbers are adjusted every year based on the consumer price index.
What percentage are you?
Don’t get confused by all of these numbers. Let me show you how you can calculate your percentage.
First, you need two numbers to do this. How many people are in your household and what is your household income. So for this example let say we have mom, dad and two kids, so we have 4 people in the household. Mom and dad together make $40.000 per year.
$40.000 : 26.500 = 1.509
The reason we divided the income by 26.500 is because if you look at the chart that is the level for a household of 4. The 1.509 is our percentage, just move the dot two places to the right. So your federal poverty level would 150.9%.
How federal poverty levels are used to determine eligibility
- Income between 100% and 400% FPL: If your income is in this range, in all states you qualify for premium tax credits that lower your monthly premium for a Marketplace health insurance plan.
- Income below 138% FPL: If your income is below 138% FPL and your state has expanded Medicaid coverage, you qualify for Medicaid based only on your income.
- Income below 100% FPL: If your income falls below 100% FPL, you probably won’t qualify for savings on a Marketplace health insurance plan or for income-based Medicaid.
“Income” above refers to “modified adjusted gross income” (MAGI). For most people, it’s the same or very similar to “adjusted gross income” (AGI). MAGI isn’t a number on your tax return.
Programs That Use the Poverty Guidelines
Many federal programs use the poverty guidelines to determine eligibility. The most notable are the Supplemental Nutrition Assistance Program (SNAP), Medicaid, and the Affordable Care Act (ACA), as detailed below:
- SNAP: Available to those with a gross monthly income of 130% of the federal poverty level and whose household has less than $3,500 in assets if an elderly or disabled person lives there or less than $2,250 in assets if no elderly or disabled person lives there.
- Medicaid and Children’s Health Insurance Program (CHIP): Provide health care coverage to low-income individuals. Covering 72.5 million Americans, they are the largest source of U.S. health coverage.
- ACA-expanded Medicaid: Available to adults in households whose income is 133% of the poverty level. The program does not take into account how much a family has in assets. In states that didn’t accept expanded Medicare coverage, the income requirement depends on the state.
- ACA: Provides health insurance at subsidized rates for those making 400% or less of the poverty level.The savings on insurance premiums vary according to income and household size.
- Head Start and Early Head Start: Provide educational, health, and well-being programs for young children in families earning below the poverty guidelines. The National School Lunch Program provides free lunches to children in families with incomes at or below 130% of the federal poverty level. Those who earn below 185% are eligible for a discounted lunch.
- Temporary Assistance for Needy Families (TANF): Provides direct income assistance. The federal government funds it, but the states develop their own eligibility requirements. Most states use the federal poverty level when making the requirement.