The Children’s Health Insurance Program

Introduction

In 1997, the Children’s Health Insurance Program (CHIP) was created with strong bipartisan support. CHIP gives states financial support to expand publicly funded coverage to uninsured children who are not eligible for Medicaid. As a block grant, CHIP provides states with a set amount of funding that must be matched with state dollars.

The Children’s Health Insurance Program Reauthorization Act (CHIPRA) reauthorized CHIP in April 2009 and the 2010 Affordable Care Act (ACA) contained provisions to strengthen the program. The ACA extended CHIP funding until September 30, 2015 and requires states to maintain eligibility standards through September 30, 2019. The Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 extended CHIP funding with no programmatic changes through September 30, 2017. Legislative action will be required to extend federal funding past September 2017.

Structure

CHIP builds on Medicaid’s success providing health coverage to children since 1965. States can use their federal CHIP funds to finance coverage for children whose family incomes are too high to qualify for Medicaid under the rules the state had in place as of June 1997. States may opt to use CHIP funds to expand Medicaid for children beyond the June 1997 levels, cover children through a separate CHIP program, or combine the two approaches. As of January 1 2017, 15 states (including the District of Columbia) opted to use CHIP funds to expand their Medicaid programs.

During FY 2016, 8.9 million children were ever enrolled in coverage funded by CHIP while 37.1 million children were ever enrolled in Medicaid-financed coverage. In 2015, more than half (56%) of children with CHIP are actually enrolled in expanded Medicaid coverage financed by CHIP. Also in 2015, CHIP spending reached over $13.5 billion, compared to a total of $524 billion in Medicaid.

Financing

Federal and state governments jointly finance CHIP, although the federal government assumes a larger share of the financing with an enhanced federal matching rate ranging from 65 to 82 percent, an average of 15 percentage points higher than Medicaid’s matching rate. The ACA (2010) established, and MACRA (2015) funded, a boost to the CHIP enhanced matching rate of an additional 23 percentage points up to a 100 percent maximum through 2017. Unlike Medicaid, CHIP funds are capped overall and for each state. This capped funding is distributed through state-specific allotments established by a statutory formula that accounts for the state’s actual use of CHIP funds and is adjusted for health care inflation and child population growth. States facing funding shortfalls can obtain additional funding through a child enrollment contingency fund and allotment increases are available for states with approved plans to expand eligibility or benefits.

CHIP funds generally must be used to provide coverage to uninsured, low‐income children who do not qualify for Medicaid. States also can use a limited amount of funds for administrative costs and other non‐coverage activities, such as outreach.

Insurance Status

Children must be uninsured to qualify for chip health insurance in pa . Some states impose waiting periods, which require children to be uninsured for a certain period of time before they can enroll, but this is not a federal requirement. As of January 2017, 15 states imposed waiting periods.

Citizenship/Immigration Status

CHIP covers citizens and certain legal immigrants. Under CHIPRA, states gained the option to cover lawfully residing immigrant children who have not been in the country for five years (with exceptions for refugees). As of July 2017, 32 states and D.C. have taken this option for children. Federal funds may not be used to cover undocumented children (except for emergency or pregnancy‐related services). Some states use state funding to cover children regardless of immigration status. 

Application and Enrollment

Coordination

States with separate CHIP programs must coordinate their enrollment procedures with Medicaid to prevent children from “falling through the cracks” and remaining uninsured, as well as to ensure enrollment in the appropriate program. These coordination rules require state CHIP programs to screen CHIP applicants for both Medicaid and CHIP eligibility to assure that Medicaid‐eligible children are enrolled into Medicaid, and not simply turned away from CHIP. This “screen and enroll” requirement also applies to Medicaid and the ACA marketplaces to assure they screen for CHIP eligibility, in accordance with the ACA’s “No Wrong Door” requirement.

Streamlining and Enrollment

States are provided with several policy options for streamlining enrollment. Express lane eligibility allows states to rely on eligibility determinations made by other public programs (e.g., State Nutrition Assistance Program, or SNAP, School Lunch, Temporary Assistance to Needy Families, or TANF) to determine whether a child is eligible for Medicaid or CHIP. This approach provides administrative efficiencies while simultaneously preventing families from having to provide the same information to multiple agencies. Presumptive eligibility (PE) allows qualified entities (e.g., physicians, hospitals, schools) to make a preliminary eligibility decision. PE allows eligible individuals to get immediate coverage of health services while the regular application process is completed. PE is open to pregnant women, children, and adults.

Verification and Documentation

As of 2014, states are expected to rely on trusted electronic data sources rather than paper documentation to verify eligibility. Only when information cannot be obtained through an electronic data source or is not ‘‘reasonably compatible’’ with information provided by the consumer can additional information, including paper documentation, be requested. States must verify income electronically; however, this can be done post-enrollment after the state determines eligibility based on the individual’s self-attestation. The only eligibility criterion that federal law requires families to document is immigration and citizenship status.