How the Federal Poverty Level Sets Medicaid Income Thresholds
The 2026 Federal Poverty Level sits at $15,650 for a single adult in the 48 contiguous states — the number that underpins almost every Medicaid income threshold. Alaska and Hawaii get higher floors ($19,560 and $18,000) because the cost of living there is brutal. HHS publishes these figures annually in the Federal Register, and they're indexed to the Consumer Price Index. Honestly, the FPL is the one number every family doing Medicaid math needs to memorize — everything else (138% for expansion adults, 300% of SSI for long-term care) is expressed as a multiple of it.
Medicaid eligibility is expressed as a percentage of the FPL. Under the Affordable Care Act's Medicaid expansion, states that have opted in cover adults with incomes up to 138% of the FPL (which includes a 5% income disregard built into the calculation). For 2026, this translates to approximately $21,597 for a single individual or $29,286 for a family of two. Children are generally covered at higher income levels — most states cover children in families with incomes up to 200% to 300% of the FPL through Medicaid and the Children's Health Insurance Program (CHIP). Pregnant women are typically covered at 138% to 200% of the FPL, depending on the state.
For elderly and disabled individuals seeking coverage for long-term care services, the income limits are typically lower and based on different standards than the MAGI-based rules used for other populations. Most states use the SSI federal benefit rate ($967 per month for an individual in 2026) or a multiple of the SSI rate as their income limit for aged, blind, and disabled categories. Some states are "209(b) states" that use more restrictive income criteria than the SSI standard, while others are "medically needy" states that allow individuals with higher incomes to qualify by spending down their excess income on medical expenses. Use our Medicaid Eligibility Calculator to check the exact income limits that apply in your state.
Medicaid Expansion States: Income Limits for Adults
As of 2026, 40 states and the District of Columbia have adopted Medicaid expansion under the Affordable Care Act, covering all adults with incomes up to 138% of the FPL regardless of disability status, pregnancy, or family composition. In these states, the income limit for a single adult is approximately $21,597 per year ($1,800 per month). The ten states that have not expanded Medicaid — primarily in the South — leave a significant coverage gap for adults who earn too much to qualify for traditional Medicaid but too little to qualify for premium tax credits on the health insurance marketplace.
Among expansion states, there are further variations in how generously they implement the program. Some states, like New York, provide extensive benefits including dental, vision, and broad home and community-based services. Others cover the minimum benefits required by federal law. Some expansion states have obtained waivers from CMS under Section 1115 of the Social Security Act that modify standard Medicaid rules — for example, requiring premiums for expansion enrollees with incomes above 100% of the FPL, or imposing work requirements (though many work requirement waivers have been withdrawn or modified by subsequent administrations).
If you live in a non-expansion state like Texas, Florida, or Georgia, adult Medicaid coverage is generally limited to specific categories: parents with very low incomes (often below 50% of the FPL), pregnant women, and individuals who are aged, blind, or disabled. A childless adult in a non-expansion state typically cannot qualify for Medicaid regardless of how low their income is unless they meet the aged, blind, or disabled criteria. The coverage gap affects an estimated 1.9 million Americans, according to the Kaiser Family Foundation. Check whether your state has expanded Medicaid using the interactive map at KFF.org.
Long-Term Care Medicaid: Income Rules for Nursing Home Coverage
The income rules for long-term care Medicaid, which covers nursing home care and sometimes home and community-based services, are distinct from the rules for general Medicaid coverage. In most states, the income limit for long-term care Medicaid is tied to the SSI benefit rate or a state-specific standard. For 2026, the SSI federal benefit rate for an individual is $967 per month. However, many states set their long-term care income limits higher — often at 300% of the SSI rate (approximately $2,901 per month), which is the maximum permitted under federal law for states that use an "income cap" or "categorically needy" methodology.
States are divided into two broad categories regarding income treatment: "income cap" states and "medically needy" states. In income cap states (also called "categorically needy only" states), an applicant whose income exceeds the limit is simply ineligible for Medicaid long-term care benefits, regardless of their medical expenses. These states include Florida, Texas, Colorado, and about 20 others. However, most income cap states allow applicants to use a Qualified Income Trust (also called a "Miller Trust" or "d4B trust") to divert excess income into a trust, effectively reducing countable income below the cap. The legal authority for these trusts is found at 42 U.S.C. § 1396p(d)(4)(B).
In medically needy states, applicants with income above the limit can "spend down" to eligibility by incurring medical expenses that reduce their countable income below the state's medically needy income level. New York, California, and about 30 other states use some form of medically needy or spend-down program. The medically needy income level varies by state but is often significantly lower than the income cap used in categorically needy states. For detailed income limit information specific to your state, use our Medicaid Eligibility Calculator and consult your state Medicaid agency's website, which is linked from Medicaid.gov.
How Income Is Counted: MAGI vs. Non-MAGI Methodologies
The methodology Medicaid uses to count income depends on which eligibility category the applicant falls into. For most non-elderly, non-disabled adults and children, Medicaid uses Modified Adjusted Gross Income (MAGI), which was standardized across states by the Affordable Care Act. MAGI includes adjusted gross income (as reported on the tax return) plus tax-exempt interest, foreign income, and non-taxable Social Security benefits. MAGI does not include Supplemental Security Income (SSI) payments, workers' compensation, child support received, or veterans' disability payments. The MAGI rules are codified at 42 C.F.R. § 435.603.
For aged, blind, and disabled individuals — the categories most relevant to long-term care — states generally use non-MAGI income counting methodologies that predate the ACA. These methodologies are based on SSI income counting rules, which include most types of income but apply certain disregards and deductions. Common disregards include the $20 general income exclusion (applied to any income), the $65 earned income exclusion (applied to wages), and one-half of remaining earned income after the $65 exclusion. Some states have additional state-specific disregards that further reduce countable income.
Understanding which income counting methodology applies to you is critical because it can mean the difference between qualifying and being denied. For example, a 68-year-old applicant with $1,200 per month in Social Security income and $200 per month in pension income would have $1,400 in gross income. Under non-MAGI rules with the $20 general income disregard, countable income would be $1,380. In an income cap state with a limit of $2,901 (300% of SSI), this applicant would qualify. But in a state with a lower medically needy income level of $600 per month, the applicant would need to spend down $780 per month on medical expenses to qualify. Our Medicaid Eligibility Calculator applies the correct methodology for your state and eligibility category.
Special Income Rules for Married Couples
When one spouse needs long-term care and the other remains in the community, Medicaid applies special income rules designed to prevent the community spouse from being impoverished. Under the Medicare Catastrophic Coverage Act of 1988 (codified at 42 U.S.C. § 1396r-5), the income of the community spouse is generally not counted when determining the institutionalized spouse's Medicaid eligibility. Only the income in the name of the applicant (the institutionalized spouse) is considered. This means a community spouse can have substantial income — from employment, Social Security, pensions, or investments — without affecting the other spouse's Medicaid eligibility.
However, there is an important exception: the Minimum Monthly Maintenance Needs Allowance (MMMNA). If the community spouse's own income falls below a certain threshold (approximately $2,643.75 per month in 2026, with a maximum of approximately $4,066.50 per month), a portion of the institutionalized spouse's income may be diverted to the community spouse to bring their income up to the MMMNA. This diversion reduces the amount the institutionalized spouse must contribute toward their cost of care (known as the "patient pay amount" or "share of cost"). The MMMNA figures are updated annually by CMS and published in the Federal Register.
These spousal income rules are among the most complex in all of Medicaid law, and they vary significantly by state. Some states allow the community spouse to petition for a higher income allowance through a fair hearing or court order. Others have implemented optional provisions that affect how income is allocated between spouses. For married couples navigating long-term care Medicaid, understanding these rules is essential. Our article on Community Spouse Resource Allowance covers both the income and asset protections available to community spouses, and our Medicaid Eligibility Calculator factors in spousal income rules for your state.
Income Limits for Home and Community-Based Services
Medicaid does not only cover nursing home care. Most states also provide long-term care services in the home and community through Home and Community-Based Services (HCBS) waiver programs authorized under Section 1915(c) of the Social Security Act. These waivers allow states to provide services such as personal care attendants, adult day care, respite care, home modifications, and care coordination to individuals who would otherwise require institutional care. HCBS waivers have become increasingly popular as both families and policymakers prefer home-based care to institutional placement.
Income limits for HCBS waiver programs generally mirror the income limits for institutional Medicaid in the same state — typically 300% of the SSI rate ($2,901 per month in 2026). However, some states set different income limits for their HCBS programs, and many states have waiting lists for HCBS waiver services due to limited funding. The waiting list problem is significant — in some states, individuals may wait months or even years for a waiver slot, during which they must either pay for care privately, rely on family caregivers, or enter a nursing home (where there is no waiting list for Medicaid-funded care).
If you or a family member needs long-term care but prefers to remain at home, investigate your state's HCBS waiver programs early. Contact your state Medicaid agency or your local Area Agency on Aging (which can be found through the Eldercare Locator at 1-800-677-1116) to learn about available programs, income limits, and current waiting list status. Our Medicaid Eligibility Calculator can help you determine whether you meet the income criteria for HCBS programs in your state.
What to Do If Your Income Exceeds the Limit
Exceeding the Medicaid income limit does not necessarily mean you cannot qualify for benefits. Several strategies exist to reduce countable income or work within the system to obtain coverage. In income cap states, a Qualified Income Trust (QIT) or Miller Trust is the primary solution. This irrevocable trust receives the applicant's income and distributes it according to Medicaid rules — paying the patient's share of cost to the nursing facility, contributing to the community spouse's maintenance allowance if applicable, and passing through any remaining funds to the state Medicaid agency upon the applicant's death. The trust must be properly drafted and administered to comply with 42 U.S.C. § 1396p(d)(4)(B).
In medically needy states, the spend-down mechanism allows applicants to qualify by incurring medical expenses that bring their countable income below the medically needy income level. Medical expenses that count toward the spend-down include health insurance premiums, prescription drug costs, doctor and hospital bills, dental and vision expenses, and the cost of medical equipment. The spend-down period is typically one to six months, and the applicant must demonstrate that medical expenses during that period exceed the difference between their income and the medically needy income level.
Other income reduction strategies include maximizing pre-tax deductions (such as increasing contributions to employer-sponsored health insurance), ensuring that any income disregards are properly applied, and in some cases, restructuring income sources. For example, converting a lump-sum payment into a Medicaid-compliant annuity can transform excess resources into a non-countable income stream. These strategies are complex and should be implemented with guidance from an elder law attorney. For a broader overview of eligibility strategies, see our Medicaid eligibility guide and use the Medicaid Eligibility Calculator to model different income scenarios.
Staying Current: How Income Limits Change Each Year
Medicaid income limits change annually, and families planning for future care needs must account for these adjustments. The FPL is updated each January and published in the Federal Register, typically taking effect for Medicaid purposes within one to two months. The SSI federal benefit rate, which governs income limits for aged, blind, and disabled categories, is adjusted annually based on the Social Security Cost of Living Adjustment (COLA), which is announced each October and takes effect in January. For 2026, the COLA increased SSI benefits by approximately 2.5%, pushing the SSI rate from approximately $943 to $967 per month.
State-specific income limits may also change independently of federal adjustments. States can modify their Medicaid plans through State Plan Amendments (SPAs) filed with CMS, which may raise or lower income thresholds, add or remove eligibility categories, or change income counting methodologies. Additionally, states that operate Medicaid under Section 1115 waivers may have unique income rules that change when the waiver is renewed or modified. The most reliable source for current income limits in your state is your state Medicaid agency's website, which can be found through Medicaid.gov.
Our Medicaid Eligibility Calculator is updated regularly to reflect current FPL and SSI figures, as well as state-specific income limits. Bookmark it and check back periodically if you are planning for a future Medicaid application. For more on all eligibility factors — not just income — see our Medicaid eligibility guide, which covers asset limits, the look-back period, and application procedures in addition to income rules.
Disclaimer: This article is for general educational purposes only and does not constitute legal advice. Made For Law is not a law firm, and our team are not attorneys. We are not affiliated with any federal, state, county, or local government agency or court system. Content may be researched or drafted with AI assistance and is reviewed by our editorial team before publication. Laws change frequently — always verify information with official sources and consult a licensed attorney for advice specific to your situation. Full disclaimer
- KFF.orgkff.org
- Medicaid.govmedicaid.gov
- Eldercare Locatoreldercare.acl.gov
Our editorial team researches and summarizes publicly available legal information. We are not attorneys and do not provide legal advice. Every article is checked against current state statutes and official sources, but you should always consult a licensed attorney for guidance specific to your situation.
