2022 Changes to the Poverty Line: Impacts on Medicaid & Other Government Programs

The Federal Poverty Level (FPL) is a guideline that defines how much income a household needs to cover basic necessities. The measurement considers the number of family members in the household, as bigger families need more money to afford accommodations, food, utilities, etc. 

The Department of Health and Human Services (HHS) publishes the FPL every January in its annual report and adjusts it annually for inflation. The report also considers the geographical location, as areas can have drastically different living costs. Alaska and Hawaii have separate FPLs than the remaining 48 contiguous states and Washington D.C. 

The 2022 FPL amounts are listed in the table below:

Number of Persons in Household48 States Plus D.C.AlaskaHawaii
1$13,590$16,990$15,630
2$18,310$22,890$21,060
3$23,030$28,790$26,490
4$27,750$34,690$31,920
5$32,470$40,590$37,350
6$37,190$46,490$42,780
7$41,910$52,390$48,210
8$46,630$58,290$53,640

The federal and state governments use the FPL to determine if households meet the income requirements for many welfare programs, such as the following:

  • Medicaid
  • Supplemental Nutrition Assistance Program (SNAP) – also known as food stamps
  • Children’s Health Insurance Program (CHIP)
  • Housing Choice Voucher Program – also known as Section 8

Some agencies and programs use a percentage of the FPL, such as 138%. A percentage can adjust for the areas’ higher living costs. For example, a household of two living in Los Angeles or New York City would need to earn more for the same lifestyle as a couple living in Boise, Idaho or Des Moines, Iowa. 

For health insurance, the government compares your income to the FPL to decide the coverage and amount of government subsidies you might qualify for. Here are the income requirements for reduced-cost health coverage:

  • Income more than 400% FPL – May not qualify for some tax credits 
  • Income between 100 and 400% FPL – In the range to qualify for credits to lower monthly premiums
  • Income at or less than 150% FPL – May qualify for tax credit subsidies, Medicaid, or CHIP
  • Income less than 138% FPL – May qualify for Medicaid if your state expanded Medicaid coverage
  • Income less than 100% FPL – Likely to qualify for Medicaid

However, “income” does not mean your whole paycheck. The government uses an adjusted or modified income that deducts certain expenses, such as student tuition and loan interest, retirement contributions, and dependent credits. 

Medicaid vs. Expanded Medicaid

Medicaid is a nationwide program that provides affordable health insurance coverage. You can qualify for the program based on your household income compared to the FPL. Your household may also meet the requirements due to a disability, health condition, or another factor. 

Although Medicaid is available in every state, each area has the option to “expand” coverage and increase the number of eligible residents. You may qualify for Medicaid if you live in an expanded state and earn less than 138% of FPL. 

However, there can be a coverage gap in states that did not expand the Medicaid eligibility criteria. Able-bodied, healthy adults between 18 and 65 years of age who make more than the Medicaid income threshold but less than the Marketplace minimum may not receive free or reduced health insurance. 

The following states that have not expanded Medicaid:

  • Alabama
  • Florida
  • Georgia
  • Kansas
  • Mississippi
  • North Carolina
  • South Carolina
  • South Dakota 
  • Tennessee
  • Texas
  • Wisconsin
  • Wyoming

However, the current administration is working to pass the Build Back Better Act, which increases the amount and eligibility for health care coverage. The BBB Act claims to develop tax credits for adults in the gap. 

Other Expanded Welfare Programs

In addition to Medicaid, the federal and state governments are increasing eligibility for other economic programs. The government is constantly reforming the following programs: 

  • Earned Income Tax Credit
  • Child Tax Credit
  • State Income Supplements
  • Food stamps
  • Medicaid and CHIP

At the beginning of 2022, 21 states increased the minimum hourly wage. The Raise the Wage Act of 2021 would also increase the federal minimum wage to $15 per hour by 2025 if it passes. 

The combination of increasing wages and expanding welfare eligibility could influence who qualifies for benefits. For instance, more residents would be eligible in states that do not increase the minimum wage than those that do unless the federal government increases the minimum.

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