Children’s Health Insurance Program (CHIP)

DEFINITION of 'Children’s Health Insurance Program (CHIP)'

A medical coverage source for individuals under age 19 whose parents earn too much income to qualify for Medicaid, but not enough to pay for private coverage. Children’s Health Insurance Program coverage varies from state to state, but all states’ CHIP plans cover routine check-ups, immunizations, doctor visits, prescriptions, dental care, vision care, hospital care, laboratory services, X-rays and emergency services. Some states also cover parents and pregnant women.

BREAKING DOWN 'Children’s Health Insurance Program (CHIP)'

The Children’s Health Insurance Program is a U.S. federal program implemented in 1997 and administered by the states. Each state names its own program; for example, New York’s is called “Child Health Plus.” The federal government matches funding the states provide, similar to Medicaid. A 2009 program update also made federal funds available to help locate and enroll eligible children not currently served by the program. Many parents whose children would qualify have not applied because they think the enrollment process will be difficult or they won't qualify financially.

In most states, a family of four earning up to $45,000 a year will qualify for CHIP; the limit is higher in some states. It is necessary to apply and be accepted into CHIP to receive coverage. In some cases, children will qualify for children’s Medicaid rather than CHIP. Any adult who lives more than half the time with the child may apply on the child’s behalf.

While some medical services, such as regular check-ups, are free under CHIP, others require a co-payment. In addition, members must pay a monthly premium in some states. However, the premium can’t exceed 5% of annual household income. Enrollment fees and co-pays, if any, may be based on ability to pay.

CHIP helps parents whose employers don’t provide health coverage to obtain coverage for their children. The program makes it more likely that children have a doctor regularly watching over their health.