Children’s Health Insurance Program Frequently Asked Questions

twitterThe Children’s Health Insurance Program (CHIP) was enacted in 1997 under Title XXI of the Social Security Act and has since provided critical health coverage to children in families with low to moderate income. In FY2016 more than 8.9 million children were enrolled in CHIP[1]. This fact sheet is intended to provide an overview of CHIP; for state specific information please see NASHP’s State CHIP Fact Sheets.

1. How is CHIP funded?

CHIP is jointly funded by states and the federal government. Federal CHIP allotments are capped through a block grant model and provided to states annually based on their recent CHIP spending. States draw down federal CHIP funds at an enhanced Federal Medicaid Assistance Percentage (E-FMAP) rate. The Affordable Care Act (ACA) increased this enhanced match rate by 23 percentage points (commonly referred to as the “23 percent bump”) beginning in October 2015 through September 2019. As a result of the increase, the CHIP matching rate currently ranges from 88-100 percent across states.

2. Who is eligible?

CHIP provides coverage to uninsured children up to the age of 19 in families with incomes that are too high to qualify for Medicaid (currently set at an eligibility floor of 138 percent federal poverty level (FPL) for children), but cannot afford private coverage. States have discretion to set income eligibility levels, so eligibility varies across states, however most cover children up to at least 200 percent FPL. Beginning in 2014, eligibility levels for CHIP were revised based on Modified Adjusted Gross Income (MAGI). For state-specific information on eligibility standards please see NASHP’s State Medicaid and CHIP Eligibility Standards.

Since 2002, states have been able to use CHIP funding to cover pregnant women through the “unborn child” option. Since this option technically covers the unborn child rather than the pregnant woman, some states have specifically used this option to provide critical prenatal care to woman regardless of their immigration status. State benefit packages under this option vary, however are typically limited and can only cover services related to the pregnancy or conditions that will impact the unborn child. In 2009, the Children’s Health Insurance Program Reauthorization Act (CHIPRA) created an option for states to use CHIP funding to explicitly cover pregnant women as a separate category if the state met certain criteria. For more information please see NASHP’s Eligibility Levels for Coverage of Pregnant Women in Medicaid and CHIP.

3. Do states have flexibility in administering their CHIP program?

States have the option to design their CHIP program in one of three ways:

  • Separate CHIP: state receives federal funding to provide child health assistance to uninsured low-income children
  • Medicaid expansion CHIP: state receives federal funding to expand Medicaid coverage to targeted low-income children
  • Combination CHIP: state receives federal funding to implement both a Medicaid expansion and separate CHIP program concurrently

4. Is there cost sharing in CHIP?

States with separate CHIP programs have the option of imposing limited enrollment fees, premiums, deductibles, coinsurance, or copayments, but in total these cannot exceed 5 percent of a family’s annual income and are prohibited for certain services and enrollees. As of January 2017, 22 states charge monthly or quarterly premiums, 24 states impose co-payments for certain services, and 4 states charge annual enrollment fees in their separate CHIP programs[2]. States with Medicaid expansion CHIP programs must adhere to Medicaid cost-sharing rules.

5. What is covered under CHIP?

CHIP provides pediatric-centered, comprehensive benefits; however coverage varies by state and type of program. Medicaid expansion CHIP programs must provide the standard Medicaid benefit package which includes Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) services and covers all medically necessary services, such as mental health and dental services. States with separate CHIP programs have more flexibility to determine the scope of benefits, but they must be based on a benchmark package or approved by the US Secretary of Health and Human Services. In addition, all separate CHIP programs must provide dental services, well-baby and well-child care services, emergency services, and coverage for age-appropriate immunizations.

6. What is the role of CHIP for states and in serving families?

Over the last two decades, states have invested time and resources to develop their CHIP programs. CHIP’s flexibility in terms of program design and administration has enabled states to build efficient enrollment systems and implement diverse health services including poison control centers and lead abatement activities. CHIP not only serves as a crucial funding source that states wouldn’t otherwise have to provide coverage for low to moderate income children, but also encourages states to foster pediatric-specific provider networks and development quality measures that address children’s unique health needs[3]. For children in low and moderate income families, CHIP provides a more affordable coverage option than employer sponsored insurance or marketplace coverage and typically offers more comprehensive benefit packages.

7. What will happen if CHIP funding is not extended?

Since its enactment, CHIP funding has been extended multiple times, most recently by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) which provides funding through FY2017. Without Congressional action, federal funding for CHIP will expire on September 30, 2017 and states will soon face fiscal challenges. According to a recent analysis by the Medicaid and CHIP Payment and Access Commission (MACPAC), based on current projections from states on their CHIP spending, if federal funding is not extended all states will exhaust federal CHIP funding sometime in FY2018. If states exhaust their federal CHIP funds, those with separate CHIP programs can take steps to cap enrollment or close their CHIP programs. States with Medicaid expansion CHIP programs however, due to the ACA’s maintenance of effort (MOE) requirement, must maintain until September 30, 2019 the CHIP eligibility levels they had in place when the ACA was enacted, but at the lower Medicaid match rate.

[1] Statistical Enrollment Data System. 2016 Number of Children Ever Enrolled Report. (Washington, DC: Center for Medicare & Medicaid Services, Feb. 2017). https://www.medicaid.gov/chip/downloads/fy-2016-childrens-enrollment-report.pdf

[2] Tricia Brooks, et al., Medicaid and CHIP Eligibility, Enrollment, Renewal, and Cost Sharing Policies as of January 2017: Findings from a 50-State Survey (Washington, DC: Kaiser Family Foundation, Jan. 2017). http://kff.org/report-section/medicaid-and-chip-eligibility-enrollment-renewal-and-cost-sharing-policies-as-of-january-2017-premiums-and-cost-sharing/

[3] Center for Medicare &Medicaid Services “CHIPRA Initial Core Set of Children’s Health Care Quality Measures” Retrieved April 19, 2017. https://www.medicaid.gov/medicaid/quality-of-care/performance-measurement/child-core-set/index.html

 

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