Income-Based Health Insurance Options Back »

Written by Liz Word under the direction and review of Lorna Wounded Head.

The Affordable Care Act (ACA) is a comprehensive health care reform law enacted in 2010 to make affordable health insurance available to more people. The law provides consumers with subsidies, otherwise known as premium tax credits, which lower costs for households with incomes between 100% and 400% of the federal poverty level.


Health coverage provided to millions of eligible low-income adults, children, pregnant women, elderly adults, and people who are disabled. Medicaid is administered by states, according to federal requirements.

Children’s Health Insurance Program (CHIP)

Provides low-cost health coverage to children in families that earn above the threshold to qualify for Medicaid. In some states, CHIP covers women who are pregnant. Each state offers CHIP coverage and works closely with its state Medicaid program.

Even if you do not qualify for Medicaid based on your income, you should still apply. Depending on if you have children, are pregnant, or have a disability—you may qualify for your state’s program. It’s important to check all the boxes before giving up! You can apply for Medicaid at any point in the year, as Medicaid and CHIP do not have Open Enrollment Periods.

Federal Poverty Level (FPL)

The FPL is a measure of income provided yearly by the Department of Health and Human Services (HHS). Federal poverty levels are used to determine an individual’s eligibility for particular programs and benefits. These include savings on Marketplace health insurance, Medicaid and Children’s Health Insurance Program (CHIP) coverage.

The 2018 federal poverty level (FPL) income numbers below are determinants of eligibility for Medicaid and CHIP:

  • $12,140 for individuals
  • $16,460 for a family of 2
  • $20,780 for a family of 3
  • $25,100 for a family of 4
  • $29,420 for a family of 5
  • $33,740 for a family of 6
  • $38,060 for a family of 7
  • $42,380 for a family of 8

No matter your particular income level, there are health insurance options for you.

How to Apply?

ACA: Through the Health Insurance Marketplace

  • Fill out an application by first creating an account.
  • If anyone in the household qualifies for Medicaid or CHIP, your information will be sent to your state agency and they will follow-up about enrollment.
  • After you submit your application, you will also be notified of the different individual health insurance plans you qualify for based on your income. Explore these different options because plans may be more affordable than you think.

Medicaid and CHIP: Through local social services agency.

Common Questions

If I have Medicaid or CHIP, am I considered “covered” by the health care law?

  • Yes. If you have Medicaid or CHIP you don’t have to buy a Marketplace insurance plan. You don’t have to pay the fee that people without health coverage must pay.
  • Note that certain limited coverage Medicaid plans, like those that cover only family planning or outpatient hospital services, don’t qualify as coverage under the health care law.

What if I have been turned down for Medicaid or CHIP coverage?

  • You may be able to buy a private health plan through the Marketplace instead. You may qualify for savings based on your income through a premium tax credit and savings on out-of-pocket costs. Many people can find plans for $75 or less per month.


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