There are two different annual measures of poverty in the United States, the Federal Poverty Level and the poverty threshold. The poverty threshold is a separate calculation determined by the U.S. Census Bureau and used in determining official poverty population statistics. The Federal Poverty Level (FPL), also referred to as the federal poverty guideline, is set annually by the Department of Health and Human Services (HHS). The FPL is used by federal and state governments for administrative purposes to determine eligibility for programs like Medicaid, the Children’s Health Insurance Program, Obamacare premium subsidies, and cost-sharing reductions.
The FPL is released in January of every year and generally reflects changes in the Consumer Price Index during the previous year. It is the same in the 48 continental states and the District of Columbia. Alaska and Hawaii have a slightly higher FPL due to their higher costs of living. These separate FPLs are also determined by HHS. The FPL varies according to family size. The poverty guidelines are not defined for Puerto Rico or other outlying jurisdictions. Programs that serve these jurisdictions generally choose which FPL to use.
Some federal programs use a percentage multiple of the FPL to determine which services an individual or family may qualify for. For example, in a program that gives subsidies to families that are within 150% of the Federal poverty level, a family of 4 living within the continental U.S. would need to make at most $35,775 annually in order to qualify.
The Affordable Care Act (ACA or Obamacare) uses the Federal Poverty Level to determine eligibility for premium tax credits that are designed to help pay for health insurance plans purchased through the state exchanges. Consumers that have an annual income of 400% or less of the FPL will qualify for the tax credits, while those at 133% or less of the FPL will generally become eligible for Medicaid. Medicaid eligibility varies from state to state, however. Some states have chosen to expand Medicaid eligibility to 138% of the FPL and others have not.
|Persons in Family Unit||48 Contiguous States & D.C.||Alaska||Hawaii|
|Each additional person adds||$4,320||$5,400||$4,970|
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