What Is the Children’s Health Insurance Program (CHIP)

The Children’s Health Insurance Program (CHIP) provides medical coverage for individuals under age 19 whose parents earn too much income to qualify for Medicaid, but not enough to pay for private coverage. Congress passed CHIP in 1997 during the Clinton administration.

Key Takeaways

  • The Children's Health Insurance Program (CHIP) is a federal healthcare program that provides medical coverage to those 19 or younger whose parents can't afford private insurance but make too much for Medicaid.
  • Typically a family of four earning up to $45,000 a year will qualify for CHIP but the limits vary on a state-by-state basis.
  • Many services covered by CHIP are free but some require a co-payment. Meanwhile, some states require a monthly premium that cannot exceed 5 percent of annual income.
  • There remains a lot of confusion over whether Medicare, CHIP, or the Affordable Care Act should be used by low-income families.

Understanding the Children’s Health Insurance Program (CHIP)

The Children’s Health Insurance Program (CHIP) is a U.S. federal healthcare program administered and named differently by each state. For example, the state of New York State calls its program the Child Health Plus while Arkansas calls its program ARKids. Similar to the way Medicaid works, the federal government provides matching funds to each state. Responsibility for managing CHIP programs falls under the state’s Medicaid administration.

Typically a family of four earning up to $45,000 a year will qualify for CHIP but the limits vary on a state-by-state basis. In many instances, these families are unable to gain health insurance coverage for their children through an employer. Families must apply for CHIP and many are unaware of the program’s existence. In 2009, Congress allocated federal funds to help raise visibility and also help more families enroll. Sometimes children will qualify for children’s Medicaid rather than CHIP. An adult who lives more than half the time with the child may apply for the child.

Many medical services covered by CHIP are free but some require a co-payment. Some states also require a monthly premium that cannot exceed 5 percent of the annual household income. CHIP typically covers annual check-ups, immunizations, doctor visits, hospital care, dental and vision care, prescriptions, laboratory services, X-rays and emergency services. Some states also extend coverage to parents and pregnant women.

CHIP coverage can begin at any time throughout the year with benefits becoming available immediately. Sometimes parents who qualify for Medicaid can enroll their child in CHIP so they don’t have to buy the coverage.

Special Considerations

When Congress passed the Affordable Care Act (ACA) in March 2010, many politicians and healthcare officials thought this new mandatory health insurance program would replace the need for CHIP, but that did not happen. Instead, we now have Medicaid, CHIP, and the ACA, so there is increased confusion among low-income families on which options are best for them.

Benefits and co-payments are not consistent among the various programs so it's important to fully explore the many options before choosing one. Given the uncertainty surrounding the ACA, it remains to be seen what additional options and changes may be coming to affordable healthcare options for low-income families.