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Fact Sheet: The Children’s Health Insurance Program (CHIP) and Children with Special Health Care Needs: An Overview

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The Children’s Health Insurance Program (CHIP) provides publicly sponsored health coverage for children, birth to 19 years old:

  • Who are uninsured and whose families do not have access to affordable private insurance
  • Whose family income exceeds their state’s income eligibility for Medicaid but is less than the state’s upper income limit for CHIP

Since it began in 1997, CHIP has helped millions of uninsured children get access to free or low-cost health coverage. CHIP is especially important for children with special health care needs who are uninsured and who are not eligible for Medicaid because their family’s household income is too high. This public benefit program provides affordable and comprehensive health care coverage with minimal premiums and cost sharing. It helps ensure families do not have to delay or miss out on health care for their children because they cannot pay the full cost themselves.

Funding

A combination of state and federal matching dollars funds CHIP in each state and in the District of Columbia (DC). The federal match, called eFMAP (Enhanced Federal Medical Assistance Percentage), varies by state. It is based on state income compared to the national average. Find the Enhanced Federal Medical Assistance Percentage for the Children’s Health Insurance Program in each state and DC. Unlike Medicaid, where federal matching dollars are provided for each state dollar spent, the federal dollars available to each state’s CHIP program are capped.

Administration

CHIP is a state-federal partnership. The Centers for Medicare and Medicaid Services (CMS) oversees CHIP, but within broad federal guidelines, each state administers its own program. This is why the population served, upper income eligibility limit and covered services vary from state to state.

CHIP Eligibility

The CHIP program in each state and DC must cover uninsured children, birth through age 18, who are U.S. citizens, and whose household income is within a state’s established eligibility limits. States have the option to also include uninsured pregnant women and/or unborn children whose income is too high for Medicaid. Additionally, states may choose to include children and pregnant women who are not citizens but have been lawfully present in the U.S. for less than five years.

Benefits

States have three options for structuring their CHIP program. They can implement CHIP as a Medicaid expansion; they can implement CHIP as a separate program; or they can do a combination of both.

  1. Medicaid Expansion

    States that use CHIP dollars to expand their Medicaid programs must follow Medicaid rules. The eligible population, mandatory covered services and any optional services must be the same as its Medicaid program. (See a chart of mandated and optional covered services.) This means enrolled children will receive the Early and Periodic Screening, Diagnosis and Treatment (EPSDT) benefit, which is especially important for children with special health care needs. Medicaid expansion programs cannot have waiting lists.

  2. Separate CHIP Programs

    States that implement separate CHIP programs may close their programs for enrollment and maintain waiting lists. States have three options for defining covered services:

    • They may choose the benefits in the federal BlueCross/BlueShield plan, the state’s employee plan, or the largest commercial non- Medicaid HMO (Health Maintenance Organization) as the benchmark to define covered services.
    • They may choose a plan that provides benchmark-equivalent services as long as it includes inpatient and outpatient care, physician services, surgical, medical, lab, and x-ray services, and well-baby and well-child care, including immunizations.
    • With approval from the Secretary of the U.S. Department of Health and Human Services (HHS), a state may choose another health coverage option.

  3. Combination

    Some states use a combination of these implementation options. They use CHIP dollars to expand Medicaid income eligibility up to a certain limit and maintain separate CHIP programs above that limit. They can close enrollment and have waiting lists for the separate CHIP program, but not for the expansion program.

See each state’s CHIP program design.

For additional resources on public health insurance programs as they relate to children with special health care needs, please visit our Medicaid and Children with Special Health Care Needs page.

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