Health Insurance

MAGI (Modified Adjusted Gross Income)

MAGI is your adjusted gross income plus certain additions like tax-exempt interest and foreign income, used to assess marketplace and Medicaid subsidy eligibility.

Last reviewed: May 2026 · Editorial methodology

Definition

Modified Adjusted Gross Income (MAGI) is the income metric used by the ACA to determine eligibility for premium tax credits, cost-sharing reductions, and Medicaid in expansion states. MAGI starts with your IRS Adjusted Gross Income (AGI) and adds back specific items including tax-exempt Social Security benefits, tax-exempt interest income, and foreign earned income. Household MAGI includes the MAGI of all family members required to file a tax return, plus dependents who file a return. The resulting figure is compared against the Federal Poverty Level (FPL) to calculate subsidy amounts. For 2026 coverage, premium tax credit eligibility generally runs from 100% to 400% FPL ($15,650 to $62,600 for a single adult): the temporary enhanced subsidies that had removed the 400% FPL upper cap through 2025 expired at the end of 2025, so for 2026 the subsidy 'cliff' has returned — above 400% FPL there is generally no premium tax credit unless Congress acts (verify at healthcare.gov). Medicaid MAGI eligibility varies by state but typically applies to adults earning up to 138% FPL in expansion states. Income estimates submitted to the marketplace are reconciled against actual IRS-reported income at tax time, which can result in owing back advance credits if income was underestimated.

Where this term matters

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Tip

Glossary definitions are educational. Always check your own policy language — insurers can define common terms differently from one another. When in doubt, request a written explanation from your agent.

Related terms

Premium Tax CreditThe premium tax credit (PTC) makes marketplace coverage affordable by offsetting a portion of your monthly premium based on your income and the cost of the benchmark Silver plan.Cost-Sharing Reduction (CSR)CSRs reduce out-of-pocket costs for Silver plan enrollees with household incomes between 100% and 250% of the federal poverty level.ACA (Affordable Care Act)The ACA established consumer protections including guaranteed issue, coverage of preexisting conditions, and subsidized marketplace insurance for millions of Americans.Health Insurance MarketplaceThe marketplace, also called the exchange, is where most people shop for ACA plans and access premium tax credits to reduce their monthly premium.Family GlitchThe IRS fixed the family glitch in 2023, allowing family members to access marketplace premium tax credits when employer family coverage is unaffordable.

Related guides

Source: Cover Forge USA editorial team|Last verified: May 2026|Methodology
Definitions are educational and may be simplified. Always refer to your policy contract and consult a licensed agent for terms that affect coverage decisions.
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Cover Forge USA Editorial Team

Editorial Lead

This article was researched and written by the Cover Forge USA editorial team against federal sources (NAIC, CMS, FEMA, DOL, SSA, state DOIs) and standard policy forms. Bylines organize content by topic — they do not assert individual licensure. See our editorial-policy for details.

Reviewed June 2026

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