Overview of the Children's Health Insurance Program

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The Children's Health Insurance Program (CHIP) is a partnership between the states and the federal government that provides health insurance coverage to several million children in the United States and to thousands of pregnant women. Eligibility guidelines, coverage, and costs vary from state to state.

CHIP is similar to Medicaid, which also operates as a partnership between the state and the federal government, but differs from Medicare, which is solely operated by the federal government. Some states have different names for their CHIP programs—for instance, in Arizona CHIP is called KidsCare, in Colorado, it's Child Health Plan Plus, and in Iowa, it's Healthy and Well Kids in Iowa.

The federally-run website Insure Kids Now lets you select your state and directs you to the applicable Medicaid and/or CHIP program.

Coverage

Total enrollment figures vary depending on what time of year you look at the number of kids enrolled in CHIP. Since eligibility is based on income, families cycle in and out of CHIP depending on employment circumstances.

During the 2017 fiscal year, there were a total of 9.46 million children covered by CHIP at some point during the fiscal year. As of August 2018, there were 6.5 million individuals enrolled in CHIP coverage.

States have the option to either create a separate CHIP program, use CHIP funding to expand Medicaid coverage for kids, or use a combination of the two approaches. As of 2018, there are 36 states with separate CHIP programs, but most of them have also used CHIP funding to expand Medicaid for kids.

Eligibility

Income

General eligibility for CHIP is based on income. Nearly all children covered by CHIP are in households with income that doesn't exceed 250 percent of the poverty level (in 2018, that amounts to $62,750 for a family of four). But eligibility varies from state to state (each state's income cap for CHIP eligibility is listed on the Medicaid website).

CHIP covers kids in households with income that is too high for Medicaid eligibility, but low enough that affording private health insurance might be a struggle.

About half of the states charge premiums or enrollment fees for CHIP, although total premiums and cost-sharing can't be more than 5 percent of household income.

North Dakota has the lowest income cap for CHIP eligibility, with coverage only extending to households with income up to 170 percent of the poverty level (in 2018, that's $42,670 for a family of four). Idaho, which limits CHIP eligibility to a household with income up to 185 percent of the poverty level, is the only other state that caps CHIP eligibility below 200 percent of the poverty level.

On the high end, New York provides CHIP to kids in households with income up to 400 percent of the poverty level ($100,400 for a family of four in 2018), and New Jersey's limit is 350 percent of the poverty level.

As illustrated in the eligibility guidelines, children's Medicaid eligibility in some states varies based on the child's age, with higher income limits for younger kids (infants, and kids up to age five). So, depending on the state, a child might be eligible for Medicaid for a year or several years—then transition to CHIP as they get older, even without a change in the family's income.

Pregnant Women

The vast majority of CHIP enrollees are children, but some states extended coverage to pregnant women as well. Colorado, Missouri, New Jersey, Rhode Island, and Virginia all have CHIP coverage for pregnant women with modest income. There are 16 states that use CHIP funding to cover unborn children, too, which means that pregnant women with eligible incomes receive pregnancy-related coverage regardless of immigration status.

This provides an important safety net when a pregnant woman is ineligible for Medicaid due to her immigration status; however, CHIP-funded unborn child coverage does not have to provide comprehensive coverage to the mother for non-pregnancy-related care.

Application

Families can either apply for CHIP directly through the state's Medicaid/CHIP program or can submit an application via the state's health insurance exchange. In some states, the exchange performs a cursory eligibility determination and then sends the data to the state's Medicaid/CHIP office, which makes the official eligibility determination.

In other states, the exchange conducts the entire eligibility determination process and then transmits the enrollment data to the state's Medicaid/CHIP office. The approaches taken by each state are detailed on the Centers for Medicare and Medicaid Services.

Costs

States have more flexibility to charge premiums and cost-sharing under CHIP than they do for Medicaid. This is because CHIP covers kids in households that tend to be more affluent than Medicaid-eligible households. However, total enrollment fees, premiums, and cost-sharing can't exceed 5 percent of the family's income.

In states that have premiums for CHIP, average premiums are about $18 per child in households with income at 151 percent of the poverty level and about $25 per child in households with income at 201 percent of the poverty level. These are just averages, and there's wide variation from one state to another.

In addition to premiums, many states have cost-sharing for their CHIP programs, with modest copayments when a child needs non-preventive medical care.

Other Coverage

CHIP is available based on household income, regardless of whether the kids have access to a parent's employer-sponsored plan. But there are 37 states where the Medicaid and/or CHIP program can provide funding to help eligible families offset the cost of enrolling kids in employer-sponsored insurance.

If the family is purchasing individual market health insurance in the exchange, premium subsidies to offset the cost of private insurance are not available for the kids if they're eligible for CHIP.

For example, Colorado provides CHIP for kids in families with household income up to 260 percent of the poverty level (that's $65,260 for a family of four in 2018). So if a family of four with a household income of $65,000 applies for a health plan in Colorado's exchange, they'll see premium subsidies are available for the parents, but not for the kids—this is because the kids are eligible for CHIP instead.

The family would still be allowed to purchase private coverage for the kids if they wanted to, but they'd have to pay full price for the kids' portion of the premiums.

In New York, CHIP eligibility extends all the way to 400 percent of the poverty level, which is also the cut-off for premium subsidy eligibility under the Affordable Care Act (ACA). Kids in New York never qualify for premium subsidies in the exchange if the family is eligible for premium subsidies—this is because the kids are eligible for CHIP.

Funding

The vast majority of CHIP funding comes from the federal government. In fiscal year 2016, CHIP spending amounted to $15.6 billion, and 92.5 percent of that was funded by the federal government. States paid the other 7.5 percent.

CHIP must be reauthorized periodically by Congress. Current funding extends through fiscal year 2027.

CHIP was created by the Balanced Budget Act of 1997 and has been in effect ever since it had to be reauthorized by Congress several times. Most recently, in the fall of 1997, federal CHIP funding actually expired because Congress hadn't agreed on an extension—2017 was a contentious year for health care debates in Congress, with ACA repeal taking center stage for much of the year.

The funding ran out on September 30, 2017, leaving states only with funds they had remaining from previous years—although, this was only enough to last a few months in most states.

In December 2017, Congress authorized short-term funding for CHIP and a six-year reauthorization bill was enacted in January 2018. This provides federal CHIP funding through fiscal year 2023. A few weeks later, a budget agreement was adopted that added four more years of CHIP funding. Currently, federal CHIP funding is secured through fiscal year 2027.

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