The FPL is derived from the Federal Poverty Guidelines published in the Federal Register each year by HHS and are used to determine financial eligibility for certain federal programs. The poverty levels are the same regardless of the age of the family members.

One set of poverty levels apply to the 48 contiguous States and the District of Columbia. Alaska and Hawaii have separate and slightly higher poverty levels. When an individual applies for subsidy, we apply the FPL that corresponds to the individual’s State of residence, in the month they file the application. We program the system to compute eligibility using the correct poverty levels for the applicable State of residence. Moving to a State that has a higher or lower FPL is not a subsidy-changing event (unless one of the events also occurred as in Processing Reports of Change and Subsidy Changing Events (SCEs) HI 03050.005). Therefore, the system will not schedule an immediate redetermination when a person reports they moved.

HHS bases the FPL dollar amounts on the size of the individual’s family. The dollar amount increases as the family size increases. For purposes of determining eligibility for subsidy, family size is determined as follows:

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  the individual who is applying for the subsidy,

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  the spouse who is living in the household, and

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  any relatives who are living with the individual, and who are dependent on the individual or the individual’s spouse for at least one-half of their financial support.

If the individual who is filing for a subsidy lives alone, we base the income eligibility limit on the poverty guideline for a one-person family.

If the individual lives with others, but is not married and does not provide one-half support for a relative living in the household, we base the income eligibility limit on the poverty guideline for a one-person family.

If the individual filing for a subsidy lives only with their spouse, base the income eligibility limit on the poverty level for a two-person family. This is true whether only the individual files, or both spouses file for subsidy.

EXAMPLE: Rebecca and Rick Johnson are married and live together. Nobody else lives with them. Rick, age 67, applies for the subsidy. Rebecca is not old enough for Medicare and is not applying. For purposes of determining subsidy, the family size is two.

If the subsidy applicant lives with a relative and provides that relative with at least one-half support, count the relative as a member of the family for purposes of determining the applicable poverty level. (We do not consider the relative’s income and resources in determining the subsidy.)

In or after 2024, to be eligible for a full (100%) premium subsidy, the individual must have countable income less than 150% of the FPL for the applicable State and family size.

Before 2024, the individual's countable income must be less than 135% of the FPL for the applicable State and family size.

The individual may be eligible for a partial premium subsidy if they have an estimated effective date or coverage start date before January 1, 2024 and, their income is greater than 135% of the FPL but is less than 150% of the FPL.

An applicant is ineligible for any subsidy if their countable income is 150% or more of the FPL for the applicable State and family size.

On January 19, 2025, Jeremy applied for the subsidy. Jeremy lives alone and receives $1,300 per month in Social Security benefits before the Medicare Part B premium deduction, and a private pension of $500 per month before taxes. Assume Jeremy's countable resources are below the limit. Jeremy's countable income is:

Assume that the applicable FPL for a one-person family is $15,650. (We used the 2025 FPL rates for this example. For current FPL rates, see HI 03001.020C.3.). We determine the subsidy income limits as follows:

$15,650 x 135% = $21,127.50

$15,650 x 140% = $21,910.00

$15,650 x 145% = $22,692.50

$15,650 x 150% = $23,475.00

Analysis: Jeremy’s countable income is greater than 135% of the poverty guideline, but it is less than 140% of the poverty guideline. Jeremy's award letter will state subsidy eligibility will be 100% starting January 1, 2025. Jeremy will pay up to $4.90 for each generic drug or up to $12.15 for each brand-name drug until total out-of-pocket prescription drug spending reaches $2,000).

Billy and Norma are married and live together in Kansas. Billy is age 70, receives Title II benefits of $1,308 and a private pension of $545 per month. On November 24, 2023, Billy enrolls in Part D Medicare and applies for the premium subsidy. Norma is not old enough for Medicare and is still working. Norma expects annual gross earnings of $14,011. Assume their resources are within the limits for eligibility.

Assume that the FPL for a two-person family is $20,440. (We used the 2024 FPL rates for this example. For current FPL rates, see HI 03001.020C.3.). We determine the subsidy income limits as follows:

$20,440 x 135% = $27,594

$20,440 x 140% = $28,616

$20,440 x 145% = $29,638

$20,440 x 150% = $30,660

Analysis: The couple’s countable income ($28,611.50) is greater than 135% of the FPL and less than 140%. Therefore, Billy's award letter will state subsidy eligibility is 75% subsidy starting November 1, 2023. If Billy's circumstances remain the same, Billy will receive another letter stating starting January 1, 2024 the subsidy eligibility will change from 75% to 100% due to a new law (the Inflation Reduction Act).