CHIP

The Children’s Health Insurance Program (CHIP) is an insurance program that is jointly financed by federal and state dollars and is administered by each state. CHIP provides health care coverage to uninsured children up to age 19 whose family income is too high for Medicaid, but less than state-specific income eligibility limits. The child must also not have access to other insurance, such as through a parent’s employer. The federal government provides a higher match rate for CHIP compared to Medicaid. For fiscal year 2023, the average CHIP match rate among states is 69%, compared to the average Medicaid match rate of 56%. The maximum eligibility level that states can set and still receive the higher federal matching rate that CHIP provides is 300 percent of the federal poverty level (FPL). In 2019, the median allowed income for CHIP eligibility was 255% FPL.

Within broad federal guidelines, each state determines the design of its program, eligibility groups, benefit packages, reimbursement rates, and administrative and operating procedures. Federal law allows states to choose from three different program designs for their CHIP programs:

1. Separate CHIP – States design their programs within the statutes of the CHIP program.
2. Medicaid Expansion CHIP – States cover CHIP-eligible children through their Medicaid program.
3. Combination CHIP – States use elements of the separate CHIP and Medicaid expansion models.

If a state chooses to operate CHIP as an expansion of Medicaid, the program will follow the same federal guidelines as Medicaid; whereas if CHIP is implemented separately, states have more flexibility in determining the program’s structure. Medicaid expansion CHIP programs generally offer robust benefits, as enrollees are entitled to EPSDT coverage and the same cost-sharing limits as those in Medicaid.¹ Most states choose to use a combination of Medicaid expansion and separate CHIP programs to cover eligible children.

To learn more about CHIP eligibility and benefits, read the Catalyst Center’s resource, Medicaid and CHIP: A Tutorial on Coverage for Children and Youth with Special Health Care Needs (CYSHCN).

¹ MACPAC. Key CHIP Design Features. https://www.macpac.gov/subtopic/key-design-features/