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ACA Note: When 133 Equals 138 - FPL Calculations in the Affordable Care Act

January 13, 2011: Under the Affordable Care Act (ACA), states must expand Medicaid eligibility to include non-disabled childless adults.  (Prior to the passage of ACA, states could only cover this population through a Medicaid waiver or through a program that was completely state-funded.)  There is, however, confusion about the income threshold at which this new population is Medicaid-eligible, with some sources citing 133 percent of the federal poverty level (FPL) and others citing 138 percent.

The language of ACA specifies that childless adults are Medicaid-eligible with “modified adjusted gross income” (MAGI) at or below 133 percent FPL.  ACA’s MAGI calculation is based on adjusted gross income (AGI) as defined in the Internal Revenue Code, §36B(d)(2).  However, §2002(a)(14)(I)(i) of ACA adds a five percentage point deduction from the FPL-- one of several ways in which the AGI is “modified.”  With this five percent disregard, the Medicaid eligibility threshold is effectively 138 percent FPL. 

Going forward, states should be sure to include childless adults up to 138 percent FPL when planning and modeling Medicaid expansions.  SHADAC’s Data Center allows the calculation of insurance coverage by characteristics related to health reform, including the 138 percent FPL income category.  Click here to visit the Data Center.