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The Income Dividing Line
In states that expanded Medicaid under the ACA, the income threshold is 138% of the Federal Poverty Level (approximately $20,120 for an individual in 2026). Below this threshold → Medicaid. Above it → Marketplace subsidies.
Which States Expanded Medicaid?
40 states plus Washington D.C. have expanded Medicaid. The 10 states that have not expanded Medicaid leave a “coverage gap” for people earning between the state’s Medicaid threshold and 100% FPL — these individuals may not qualify for either program.
Key Differences
- Cost: Medicaid is free or nearly free. ACA plans have premiums (subsidized) and deductibles.
- Provider network: Medicaid networks are often more limited. ACA plans vary by insurer.
- Coverage: Both cover essential health benefits. Medicaid also covers long-term care in many states.
- Eligibility: Medicaid is income-based. ACA subsidies are income-based with no asset test.
What Happens When Your Income Changes?
If you’re on Medicaid and your income rises above the threshold, you must transition to a Marketplace plan. Conversely, if your income drops while on a Marketplace plan, you may become Medicaid-eligible. Report income changes promptly to avoid gaps in coverage.
See also: Full ACA Guide • Subsidy Calculator