F is for Federal Poverty Levels
For better or worse, health insurance has been in the news a lot lately, so we are continuing our series to help you understand different terms that may come up.
The Federal Poverty Level doesn’t seem like it is something that impacts insurance but it does. These numbers are used as a guideline for administrative purposes such as determining eligibility for federal programs. Your household income helps determine whether you qualify for Medicaid, tax credits, and/or Cost Share Reductions. Cost share reductions lower your out of pocket costs for medical care, and will be addressed in another post.
Washington state participated in the Medicaid expansion, so here’s how your income impacts the help you get with your insurance:
Income: You may be eligible for:
< 138% of FPL: Apple Health, Medicaid – no cost coverage
138 – 250% FPL: Tax Credits and Cost Share Reductions
250% - 400% FPL: Tax Credits
Here are the current FPL Guidelines.
So how would this work in real life? The FPL is $12,060 for a single adult, and $24,600 for a family of 4.
If you are a single adult and your income is:
< $16,643 per year You should qualify for Medicaid (Apple Health)
$16, 643 - $30,150 You should receive Cost Share Reductions and may receive tax credits
$30,150 - $48,240 You may receive tax credits
>$48,240 You pay full price for your insurance
For a family of 4:
< $33,948 per year You should qualify for Medicaid (Apple Health)
$33,948 - $61,500 You should receive Cost Share Reductions and may receive tax credits
$61,500 - $98,400 You may receive tax credits
>$98,400 You pay full price for your insurance
Please bear in mind that this is an over-simplification of the process. Your income is just one piece of the puzzle in determining tax credits. Other things that will impact eligibility include your citizenship/resident status, whether you have access to coverage through your employer, what percentage of your income the insurance premium represents, whether you are pregnant, or under 18.