Lawfully present and under 100% of the poverty level: the subsidy rule that already changed on January 1, 2026

The short answer

Marketplace subsidies normally require household income of at least 100% of the federal poverty level, because below that line people are expected to be covered by Medicaid. For lawfully present immigrants that assumption often failed: their immigration status blocked them from Medicaid, so a special rule let them receive subsidies anyway.

Section 71302 of the 2025 budget law removed that special rule, effective for tax years beginning after December 31, 2025 — that is, from January 1, 2026. It is already in force. A lawfully present person with income under 100% of the poverty level who cannot get Medicaid because of their immigration status now falls between the two programs: no Medicaid because of status, no subsidy because of income. The plan is still purchasable, at full price.

What is NOT happening

• This is not the January 1, 2027 change. That one is about immigration status categories. This one is about an income floor, and it took effect a full year earlier. A household can be caught by both, or by only one.
• This does not touch anyone with income at or above 100% of the poverty level. The ordinary subsidy rules continue for them.
• This does not spare green card holders. A lawful permanent resident in the five-year Medicaid waiting period, with income under the poverty line, is inside this change — even though green card holders keep their subsidy eligibility under the separate 2027 rule.
• This does not remove emergency Medicaid, which remains available regardless of immigration status, or state-funded programs where a state runs one.

Who the removed rule covered

The rule that was removed applied to people who met all three conditions at once:

If any one of the three did not apply, the special rule was never in play. This is why the change is narrow in description and heavy in effect: it lands on people who were already at the lowest incomes and had the fewest alternatives.

✓ Public Law 119-21, §71302 (statute text) · 2025 — reviewed 2026-08-10

Where the gap sits now

• Below 100% FPL, blocked from Medicaid by status: no Medicaid, no subsidy. A Marketplace plan can still be bought at full price.
• Between 100% and 400% FPL: the ordinary premium tax credit rules apply, including for people who cannot get Medicaid because of status. In Medicaid expansion states this is where many people in the five-year wait land.
• Emergency Medicaid remains available regardless of status for qualifying emergency care.
• State-funded coverage exists in some states and is decided entirely by the state; federal rules neither create nor prevent it.

The dates that matter

• January 1, 2026 — the removal took effect for tax years beginning after December 31, 2025. Already in force; this is not a future event.
• October 1, 2026 — a separate change narrows federal matching funds for full Medicaid and CHIP by immigration status.
• November 1, 2026 – January 15, 2027 — open enrollment for 2027 plans on HealthCare.gov; several state marketplaces run longer. Enrolling by December 15, 2026 is what starts coverage January 1, 2027.
• January 1, 2027 — the separate, status-based subsidy restriction takes effect, covered on its own page here.

✓ Public Law 119-21, §71302 (statute text) · 2025 — reviewed 2026-08-10

What people typically look at

• Whether their situation is about income, about status, or about both, since the two changes have different dates and different remedies.
• Where their household income actually falls against the poverty level for their household size and state, since the line is what decides this.
• What a Marketplace plan costs at full price — prices vary by state, age, and plan, and typically run as ranges, not one number.
• Whether their state runs a state-funded program that does not depend on the federal rules.
• What remains available with no plan — community health centers, hospital financial assistance, and emergency Medicaid exist regardless of coverage status. (Note: under a July 2025 federal notice, community health centers in some states may apply immigration-status restrictions; the notice is being challenged in court and applies differently by state — check with the center directly.)

You can see how these options map to your own situation, without entering your name or immigration details: [Open the Health Coverage Map →]

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This page explains federal rules in plain language. It is education, not a recommendation, and not legal or immigration advice.