Children's Health Insurance Program (CHIP)
The Children's Health Insurance Program (CHIP) provides health coverage to nearly eight million children in families with incomes too high to qualify for Medicaid, but can't afford private coverage. Signed into law in 1997, CHIP provides federal matching funds to states to provide this coverage.
State and Federal Funding for CHIP
Like Medicaid, CHIP is administered by the states, but is jointly funded by the federal government and states. The Federal matching rate for state CHIP programs is typically about 15 percentage points higher than the Medicaid matching rate for that state (i.e., a State with a 50% Medicaid FMAP has an "enhanced" CHIP matching rate of 65%). Every state administers its own CHIP program with broad guidance from CMS.
State Options for Designing the CHIP Program
States can design their CHIP program in one of three ways:
- Medicaid expansion (seven states, DC and five territories)
- Separate Child Health Insurance Program (17 states)
- Combination of the two approaches (26 states)
CHIPRA Reauthorized and Improved CHIP in 2009
The Children's Health Insurance Program Reauthorization Act (CHIPRA) was signed in 2009. CHIPRA reauthorized the program, provided additional funding for CHIP, and made many improvements to the Medicaid and CHIP programs.
CHIPRA also authorized new federal funding for outreach to children who are eligible for Medicaid or CHIP, but are not enrolled. This included $100 million in funding to be made available between FY 2009 and FY 2013:
- $10 million for a national outreach campaign
- $10 million in grants to Indian Tribes, Indian health service providers, and other tribal health care providers
- $80 million in grants to promote enrollment and retention in Medicaid and CHIP
The Affordable Care Act Extends CHIP and Enhances Federal Funding
The Affordable Care Act of 2010 maintains the CHIP eligibility standards in place as of enactment through 2019. The law extends CHIP funding until October 1, 2015, when the already enhanced CHIP federal matching rate will be increased by 23 percentage points, bringing the average federal matching rate for CHIP to 93%. The Affordable Care Act also provided an additional $40 million in federal funding to continue efforts to promote enrollment in Medicaid and CHIP.