Medicaid and Affordable Care Act marketplace subsidies split at one number: 138% of the federal poverty level. In the 40 states plus Washington D.C. that expanded Medicaid, an adult earning up to that line qualifies for Medicaid, and marketplace premium tax credits pick up just above it. In the 10 states that have not expanded Medicaid, the line works differently, and some low-income adults end up qualifying for neither program. That gap, and the exact dollar amounts on either side of it, is what this guide breaks down.
The Short Answer
If you live in a Medicaid expansion state, Medicaid covers adults with income up to 138% of the federal poverty level. Marketplace subsidies (premium tax credits) start just above 138% FPL and continue up to 400% FPL for 2026 coverage. If you live in a non-expansion state, Medicaid eligibility for adults without children is usually far more restrictive (or nonexistent), and marketplace subsidies start at 100% FPL instead of 138%. Adults earning under 100% FPL in a non-expansion state can fall into a coverage gap: too much income for Medicaid, too little for subsidized marketplace coverage.
Where the Medicaid Line Sits
Medicaid expansion, created under the ACA, lets states cover adults earning up to 138% of the federal poverty level (this is written into law as 133% FPL plus a built-in 5% income disregard, which functions as 138% in practice). As of 2026, 40 states and D.C. have adopted this expansion.
Using 2025 federal poverty guidelines, which determine 2026 coverage-year eligibility, 138% FPL breaks down like this:
| Household Size | 100% FPL (annual) | 138% FPL (Medicaid cutoff, expansion states) |
|---|
| 1 | $15,650 | $21,597 |
| 2 | $21,150 | $29,187 |
| 3 | $26,650 | $36,777 |
| 4 | $32,150 | $44,367 |
| Each additional person | +$5,500 | +$7,590 |
If your household income falls at or below the 138% FPL figure for your household size, and you live in an expansion state, you likely qualify for Medicaid regardless of whether you have children, are pregnant, or have a disability. That is the defining feature of expansion: it opened Medicaid to adults based on income alone, not just to specific categories of people.
Where Marketplace Subsidies Begin
Marketplace premium tax credits are designed to start where Medicaid stops. In expansion states, that means subsidy eligibility begins just above 138% FPL, since anyone below that line is expected to be on Medicaid instead.
In non-expansion states, the marketplace floor is lower: subsidies start at 100% FPL, because there is no Medicaid coverage above that point for most adults to fall back on.
At the top end, 2026 is a pivotal year. The enhanced premium tax credits created in 2021 and extended through 2025 expired on December 31, 2025. That means 2026 marketplace coverage reverts to the pre-2021 rules, where the subsidy cliff at 400% FPL is back. Households earning more than 400% FPL receive no premium tax credit at all, no matter how high their premiums are relative to income.
| Household Size | 100% FPL | 400% FPL (subsidy ceiling, 2026) |
|---|
| 1 | $15,650 | $62,600 |
| 2 | $21,150 | $84,600 |
| 3 | $26,650 | $106,600 |
| 4 | $32,150 | $128,600 |
Households between 100% and 250% FPL who choose a Silver plan also qualify for cost-sharing reductions, which lower deductibles, copays, and out-of-pocket maximums on top of the premium tax credit.
Side-by-Side Comparison
| Medicaid (Expansion States) | Marketplace Subsidies |
|---|
| Income floor | $0 | 100% FPL (non-expansion) or just above 138% FPL (expansion) |
| Income ceiling | 138% FPL | 400% FPL (2026) |
| Monthly cost | Usually $0 to nominal copays | Premium after tax credit, varies by plan and income |
| Who administers it | State Medicaid agency | Healthcare.gov or state exchange |
| Renewal | Annual redetermination | Annual re-enrollment during open enrollment |
| Best for | Very low income households | Moderate income households above Medicaid cutoff |
The Coverage Gap in Non-Expansion States
Ten states have not adopted full Medicaid expansion: Alabama, Florida, Kansas, Mississippi, South Carolina, Tennessee, Texas, and Wyoming have not expanded at all, while Georgia and Wisconsin run partial or alternative coverage arrangements that fall short of full ACA expansion.
In most of these states, Medicaid eligibility for adults without children is extremely limited, and childless adults without a disability often cannot qualify for Medicaid at any income level. Because marketplace subsidies only start at 100% FPL, an adult earning below the poverty line in one of these states can be stuck: too much income for the state's narrow Medicaid rules, and too little income to trigger marketplace subsidy eligibility.
The Kaiser Family Foundation estimates roughly 1.4 million adults nationally fall into this coverage gap, with the vast majority concentrated in Southern states. Texas alone accounts for a large share of the gap population, followed by Florida and Georgia.
Wisconsin is a partial exception. It has not adopted ACA expansion, but the state covers adults up to 100% FPL through its own Medicaid waiver, which closes the coverage gap there even without formal expansion status.
If you live in a non-expansion state and your income is below 100% FPL, check whether you qualify for Medicaid under a different category, such as pregnancy, a qualifying disability, or being the caretaker of a minor child. Those categorical pathways often have income limits well above the general adult cutoff.
How to Apply for Each Program
Applying for Medicaid
- Determine whether your state has expanded Medicaid. If it has, income eligibility is based on Modified Adjusted Gross Income (MAGI) compared to 138% FPL for your household size.
- Apply through your state Medicaid agency's website, by phone, or in person. You can also apply through Healthcare.gov, which screens for Medicaid eligibility automatically when you fill out a marketplace application.
- Provide proof of income, household size, and state residency. Most states process applications within 45 days, or 90 days if disability determination is involved.
- If approved, coverage can often be backdated up to three months before your application date if you were eligible during that period.
Applying for Marketplace Subsidies
- Go to Healthcare.gov (or your state's exchange if it runs its own, such as Covered California or NY State of Health).
- Estimate your household's expected income for the coverage year. This estimate determines your subsidy amount, so use your best projection, not last year's tax return, if your income has changed.
- Compare plans by metal tier (Bronze, Silver, Gold, Platinum). If your income is under 250% FPL, prioritize Silver plans to capture cost-sharing reductions along with the premium tax credit.
- Enroll during open enrollment (typically November 1 through January 15 in most states) or during a special enrollment period triggered by a qualifying life event such as job loss, marriage, or the birth of a child.
- Report income changes during the year. If your income rises above 400% FPL mid-year, you may owe back some or all of the premium tax credit at tax time, since 2026 restored the hard subsidy cliff.
What Happens If Your Income Changes
Because Medicaid and marketplace subsidies sit on opposite sides of the same income line, a mid-year raise or job loss can shift which program you qualify for. If your income rises above 138% FPL while on Medicaid in an expansion state, you will typically need to transition to a marketplace plan, and a qualifying life event triggers a special enrollment period so you are not left uninsured during the switch. The reverse is also true: if your income drops below 138% FPL while on a marketplace plan, you may become Medicaid-eligible and should report the change so your subsidy calculation stays accurate.
Frequently Asked Questions
What is 138% of the federal poverty level for a single person in 2026?
For 2026 coverage, 138% FPL for a household of one is $21,597 annually, based on 2025 federal poverty guidelines used to determine 2026 program eligibility.
Can I choose marketplace coverage instead of Medicaid if I qualify for both?
Generally no. If you are determined eligible for Medicaid, you cannot receive premium tax credits for a marketplace plan, since the two programs are structured to not overlap. Some people opt to decline Medicaid, but doing so does not restore subsidy eligibility for a marketplace plan.
Does every state use the same Medicaid income limit?
No. The 138% FPL limit applies only in the 40 states plus D.C. that adopted full ACA Medicaid expansion. Non-expansion states set their own, typically much lower, income limits for adult Medicaid eligibility, and some categories of adults may not qualify at all regardless of income.
What is the ACA subsidy cliff, and is it back in 2026?
The subsidy cliff refers to the hard cutoff at 400% FPL, above which households receive no premium tax credit. Temporary enhancements from 2021 through 2025 removed this cliff, capping premiums at a percentage of income regardless of how high that income was. Those enhancements expired at the end of 2025, so the 400% FPL cliff returned for 2026 coverage.
What if my income falls between Medicaid and marketplace eligibility?
This is the coverage gap, and it only exists in non-expansion states. If your income is below 100% FPL and you do not qualify for Medicaid under a categorical rule (pregnancy, disability, dependent children), you may not have an affordable coverage option through either program. Check community health centers, which offer sliding-scale care regardless of insurance status, as a bridge option.
How is household income calculated for these thresholds?
Both programs use Modified Adjusted Gross Income (MAGI), which is generally your adjusted gross income plus any tax-exempt interest and excluded foreign income. Household size for MAGI purposes generally follows your tax filing household, including yourself, your spouse if filing jointly, and any tax dependents.
Do cost-sharing reductions apply to Medicaid too?
No, cost-sharing reductions are a marketplace-only benefit available to Silver plan enrollees with income between 100% and 250% FPL. Medicaid has its own separate cost-sharing rules, which are typically minimal or zero for most enrollees.
