Federal Poverty Level & Health Insurance Subsidies

What Is Federal Poverty Level?

There are lots of programs designed to help the poor, but determining who is poor and who isn’t poor can be tough. The federal government of the United States has a solution for this dilemma. Each January, the Department of Health and Human Services issues that year’s federal poverty guidelines to define just who, exactly, is poor. These guidelines are commonly referred to as the federal poverty level, and they're used to determine eligibility for health insurance subsidies as well as other programs.

Federal Poverty Level Changes With Family Size

Since it costs more to feed, house, and clothe a large family than a small family, the guidelines vary by family size. The bigger your family is, the higher an income you may have and still fall beneath the federal poverty level. The guideline tables list figures for family sizes of up to eight family members. What if you have more than eight people in your family? The guidelines include a simple formula to account for each additional family member.

Different Guidelines for Different Places

Since it’s more expensive to live in some places than others, HHS publishes three separate guidelines:

1. Alaska
2. Hawaii
3. The other 48 states and Washington DC

There are no specific guidelines for Puerto Rico, the U.S. Virgin Islands, American Samoa, Guam, the Marshall Islands, Micronesia, the Northern Mariana Islands, or Palau. If you live in one of these areas and are applying for assistance from a program that uses federal poverty guidelines to determine if you’re eligible, you’ll have to ask which guideline the program uses. It’s up to the agency administering the aid program to decide.