How Medicaid income limits work

Medicaid income limits depend on your state, your household size, and which Medicaid program you are trying to enter. There is no single national income threshold. A single person in one state might earn too much for Medicaid while the same person in another state would may have access to. Your state's Medicaid agency sets the limit, and it changes based on the federal poverty level each year.

Income limits also vary by category. Medicaid for children, pregnant people, elderly people, and people with disabilities each have different thresholds in the same state. A parent might not may have access to under the adult category but their child might may have access to under the children's category, even in the same household.

The way your state counts income also matters. Some states count only earned income (wages from a job). Others count unearned income too (Social Security, pensions, child support, unemployment). Some states subtract certain expenses before they measure your income against the limit. You need to know your state's specific rules to know whether you fall below the line.

Key Takeaways

  • Each state sets its own Medicaid income limit, so the same income may may have access to you in one state but not another.
  • Income limits are different for children, pregnant people, elderly people, and people with disabilities within the same state.
  • Your state counts earned income, unearned income, or both depending on the program category you are entering.
  • You must contact your state Medicaid agency or use your state's online tool to learn the exact limit that applies to your household size and situation.
  • Income limits change each year on January 1 when the federal poverty level updates.

Income limits by state and household size

States publish their current income limits on their Medicaid websites, usually in a table organized by household size. The limit for a single person is lower than the limit for a family of four in every state. As household size grows, the income limit rises, but not by the same amount in every state.

Some states use the federal poverty level as their baseline and set the limit at a percentage of it—for example, 138 percent of the federal poverty level. Other states use different percentages or different formulas entirely. A few states have not expanded Medicaid at all for working-age adults without disabilities, so there is no income limit to meet because the program does not exist for that group in that state.

To find your state's current limits, go to your state Medicaid agency website (search "[your state] Medicaid income limits") or call the number on the back of any Medicaid card if you have one. Many states also have online income calculators where you enter your household size and monthly income and get an when ready answer about whether you may be below the limit.

What counts as income for Medicaid

Medicaid counts most money that comes into your household, but the rules differ by state and by program. Wages from employment always count. So do tips, bonuses, and self-employment income. Social Security benefits count. Unemployment insurance counts. Child support and alimony count. Pensions and retirement account withdrawals count.

Some income does not count. Supplemental Security Income (SSI) is usually not counted as income for Medicaid purposes in most states—it is treated separately. Some states do not count the first $65 of earned income per month, or do not count income earned by a child under a certain age. Student financial aid may or may not count depending on your state. Gifts and loans typically do not count as income.

Your state's Medicaid agency publishes a list of what it counts and what it does not. Before you assume your income is too high, ask your state agency specifically which types of income they count for your household situation. The answer can change the result.

How household size affects your income limit

Medicaid defines household size as the people living with you who file taxes together or who you claim as dependents. In most cases, this means you, your spouse if you have one, and your children under age 19 (or up to age 26 if they are full-time students in some states). It does not usually include adult children, parents, or siblings unless you claim them as dependents on your tax return.

Some states count household size differently for different Medicaid categories. A pregnant person's household might include only the pregnant person and their spouse, while a parent's household includes the parent and all children under 19. A child's household for Medicaid purposes might be counted differently than the same child's household for tax purposes.

If you are unsure whether someone in your home counts toward your household size for Medicaid, ask your state agency. The answer determines whether your total household income is below or above the limit.

Income limits for specific Medicaid categories

Medicaid for children usually has a higher income limit than Medicaid for adults. Many states cover children up to 200 percent of the federal poverty level while covering adults only up to 138 percent. This means a family might be over the limit for the parent but still under the limit for the child.

Medicaid for pregnant people often has its own income limit, separate from both children and adults. Medicaid for elderly people (usually age 65 and older) and people with disabilities may have different income rules because these groups may also receive SSI, which is counted differently.

Some states have separate programs with separate income limits—for example, a program for working parents, a program for childless adults, or a program for people transitioning off SSI. Each has its own threshold. Your state Medicaid website should list the income limit for each category so you can find the one that matches your situation.

When income limits change

Federal income limits update every January 1 when the U.S. Department of Health and Human Services releases the new federal poverty level. States then update their Medicaid income limits to match. If you were over the limit in December, you might fall below it in January if the poverty level rises and your state's limit rises with it. The opposite can also happen—if your income stays the same but the poverty level falls, you might go over the limit.

Some states also change their income limits mid-year if they pass new legislation or receive new federal funding. It is worth checking your state's Medicaid website once a year or whenever your income changes to see if the limit has moved.

What to do if your income is above the limit

If your income is above your state's Medicaid limit, you may still have other options. Some states have Medicaid programs for people with higher incomes if they have significant medical expenses or disabilities. Some people can reduce their countable income by subtracting certain costs—for example, medical expenses or child care costs—before comparing it to the limit.

If you do not may have access to for Medicaid, you may may have access to for subsidies on the health insurance marketplace (Healthcare.gov or your state's marketplace). Marketplace subsidies are based on income and are available to people who earn too much for Medicaid. You can also look into whether your employer offers health insurance or whether you are may be able to access for other coverage like Medicare or TRICARE.

Frequently Asked Questions

Does my income have to be exactly below the limit, or is there a grace period?

Your income must be at or below the limit your state sets. There is no grace period. If the limit is $1,500 per month for your household size and you earn $1,501, you are over the limit. Some states round or use monthly averages, so ask your state agency how they measure income in your specific case.

If I get a raise at work, will I lose Medicaid when ready?

Not when ready. Most states check income once a year or when you report a change. If you report a raise, your coverage may end on a specific date your state sets—often the first of the following month. Some states have a small income buffer or allow you to keep coverage for a few months after you go over the limit. Contact your state Medicaid agency to learn when they check income and when coverage would end if yours increases.

Does my spouse's income count if we are married but file taxes separately?

In most states, yes—your spouse's income counts toward your household income for Medicaid even if you file taxes separately. A few states have different rules for specific situations. Ask your state Medicaid agency whether filing separately changes how they count household income in your case.

What if my income varies month to month because I work irregular hours?

Most states average your income over a period of time—often the past three months or the past year—rather than looking at a single month. If you have irregular income, ask your state agency how they calculate your average. Bring recent pay stubs or tax returns to show the variation.

Can I reduce my countable income by claiming dependents or deductions?

Medicaid does not use tax deductions to reduce your countable income. However, some states do subtract certain expenses—like child care costs, medical expenses, or work-related costs—before they compare your income to the limit. The rules vary widely by state. Ask your state Medicaid agency whether any deductions or expense subtractions explore to your situation.