How Medicaid Income Limits Work — and Why They Differ by State

Medicaid income limits are set by each state, not by the federal government, so the threshold that matters is the one where you live

Medicaid is a joint federal and state program, which means each state decides how much income you can earn and still be covered. A young adult who earns $20,000 a year might may have access to in one state and not in another. The limit also depends on which category you're applying under — whether you're a parent, pregnant, disabled, or simply a young adult aging out of your parents' coverage. There is no single national number to look up.

Your state's Medicaid office publishes its current income limits, usually on its website or through its application portal. The fastest way to find your state's specific number is to search "[your state] Medicaid income limits" or call your state Medicaid agency directly. Many states also use a tool called a Modified Adjusted Gross Income (MAGI) calculator, which counts income differently than the old method did — usually in your favor, because it excludes certain types of income.

Key Takeaways

• Each state sets its own income limit, so you must check your state's number, not a national average.
• Income limits are usually expressed as a percentage of the federal poverty line, which changes every year.
• Most states use MAGI to calculate income, which often counts less of your earnings than older methods did.
• Your state's Medicaid office website or phone line can tell you the exact limit for your situation in minutes.
• If your income is close to the limit, ask about tax credits or cost-sharing reductions, which may be available even if Medicaid is not.

How states express their income limits

States don't usually say "the limit is $18,000." Instead, they say the limit is a certain percentage of the federal poverty line. For 2024, the federal poverty line for a single adult is around $15,000, but this number changes every year. A state might say its Medicaid limit for young adults is 138% of the federal poverty line — which would be roughly $20,700 for a single person in 2024, but would be higher in 2025 when the poverty line itself increases.

This percentage-based system means the actual dollar amount shifts every January when the federal government announces the new poverty line. If you're checking your state's website and see a percentage instead of a dollar amount, you can multiply that percentage by the current year's poverty line to get your state's actual limit. Your state's Medicaid office can also give you the dollar amount directly — that's what they use when they review your case.

Why your state's limit might be higher or lower than neighboring states

States have different limits because they receive different amounts of federal funding and make different policy choices about who to cover. Some states expanded Medicaid in 2014 under the Affordable Care Act and now cover young adults earning up to 138% of the poverty line. Other states did not expand and have much lower limits — sometimes as low as 100% of the poverty line, or even lower for young adults without children or disabilities.

A young adult aging out of foster care or a young adult with a disability may have a higher income limit in the same state than a young adult with no special circumstances. This is because states often have separate programs or pathways for people in specific situations. If you don't may have access to under the main young adult category, ask your state Medicaid office whether you may have access to under a different category — the answer is sometimes yes.

How MAGI changes what counts as income

Most states now use MAGI to count your income, rather than the older "countable income" method. MAGI is usually your adjusted gross income from your tax return, plus certain types of income that aren't on a tax return. The important part: MAGI often excludes things the old method counted, like student loan interest, certain education benefits, and some types of support from family members.

If you're self-employed, a student, or receiving financial support from parents or relatives, MAGI may count less of your total resources than you expect. Your state's Medicaid office can walk you through what counts and what doesn't for your specific situation. Some states have online MAGI calculators you can use before you apply, so you can see roughly where you stand.

What happens if your income is just above the limit

If you earn slightly more than your state's Medicaid limit, you may still have other options. The Advanced Premium Tax Credit (APTC) and Cost-Sharing Reduction (CSR) are available through the health insurance marketplace if your income is between 100% and 400% of the federal poverty line. These reduce what you pay for a marketplace plan. You cannot receive both Medicaid and a tax credit for the same month, but if Medicaid is closed to you, the tax credit route may be cheaper than buying insurance on your own.

Some states also have programs for young adults just above the Medicaid line — ask your state Medicaid office what's available. Income limits can also change if your circumstances change: if you lose a job, have a child, or become disabled, your new income or category might open Medicaid to you. You can report a change in circumstances to your state Medicaid office at any time; you don't have to wait for an annual renewal.

How to find your state's exact income limit

Start with your state's Medicaid website. Search for "[your state] Medicaid income limits" or "[your state] Medicaid young adult" to land on the right page. Most state websites list the current dollar amounts or percentages of the poverty line for each category. If the website is unclear, call your state's Medicaid hotline — the number is usually on the website or you can find it through 211.org.

When you call or visit the website, have ready: your state, your age, whether you have any dependents, and whether you have a disability or are aging out of foster care. These details help the Medicaid office point you to the right limit. If you're close to the limit and unsure whether you may have access to, ask to speak with someone who can review your specific income and circumstances — that conversation takes minutes and can save you from applying when you don't may have access to, or missing out when you do.

Income limits for specific young adult situations

Young adults aging out of foster care often have higher income limits or different rules than other young adults in the same state. Some states cover former foster youth up to age 26 with higher income thresholds. Young adults with disabilities may may have access to under a separate Medicaid category with its own income limit. Young adults who are pregnant may have a higher limit than non-pregnant young adults in the same state.

If you fall into any of these categories, don't assume the general young adult limit applies to you. Ask your state Medicaid office specifically about your situation. The answer may be that you have a better option than you thought.

Frequently Asked Questions

Does the income limit include money from my parents or financial aid?

It depends on your state and the type of income. Under MAGI, most parental support and student financial aid do not count as your income. However, if your parents claim you as a dependent on their taxes, your state may count part of their income as yours. Call your state Medicaid office with details about your specific situation — they can tell you what counts.

What if my income changes after I'm approved?

Report the change to your state Medicaid office. If your income drops, you stay covered. If your income rises above the limit, your coverage ends on a specific date — usually the end of the month in which you reported the change. You'll receive a notice telling you when. If you lose Medicaid because of income, you may be able to switch to a marketplace plan with a tax credit.

Are income limits the same for Medicaid and the marketplace?

No. Medicaid has a state-specific limit set by your state. The marketplace is open to anyone earning up to 400% of the federal poverty line, but you only get a tax credit if you earn between 100% and 400%. If you're above your state's Medicaid limit but below 400% of the poverty line, the marketplace may be your option.

Do I have to report my income every month?

No. Most states review your income once a year during your renewal. However, if your income changes significantly — you get a job, lose a job, or have a major life change — report it to your state Medicaid office. Some changes may end your coverage; others may not affect it. It's better to report than to risk losing coverage without warning.

What if I'm self-employed — how do they count my income?

Self-employment income is usually counted as your net income (what you earn minus business expenses) on your tax return. Your state Medicaid office can explain how they calculate this for your situation. If you're just starting a business or your income is uneven, ask whether they can use an average or whether they need current documentation.