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CHIP Cost Sharing

States can choose to impose cost sharing for children enrolled in CHIP. Cost-sharing can include enrollment fees, premiums, deductibles, coinsurance, and copayments.

States must make the following information available to enrollees, applicants, providers, and the general public:

  • Current cost-sharing charges
  • Enrollee groups subject to the charges
  • Cumulative cost-sharing maximums
  • Mechanisms for making payments for required charges
  • The consequences for an applicant or an enrollee who does not pay a charge, including the disenrollment protections

Separate CHIP Program Cost Sharing

Changes to Cost Sharing

States have the ability to periodically change their CHIP cost-sharing amounts through a state plan amendment (SPA). Prior to implementing increases in cost sharing, states must provide prior public notice of the proposed change. SPAs that increase cost sharing cannot be in effect for longer than 60 days, unless the amendment is submitted to CMS for approval during the 60-day period.

Cost-Sharing Maximums

For families with incomes at or below 150% of the Federal poverty level (FPL), premiums cannot exceed the amount permitted in Medicaid.

For families with incomes above 150% of the FPL, cumulative state cost sharing requirements can’t exceed 5% of family income.

Cost-Sharing Prohibitions

States are prohibited from imposing cost-sharing on certain individuals and in certain situations. For instance, states may not impose cost-sharing on American Indian/Alaskan Native children, or impose cost-sharing in any way that favors children from higher-income families over children from lower-income families. States are also prohibited from imposing cost-sharing, in any form, for the well-baby and well-child care services covered under the state plan. Finally, states may not impose more than one form of cost-sharing per service.

Disenrollment Protections

States are required to grant individuals enrolled in separate child health programs a 30-day grace period, from the beginning of a new coverage period, to pay any required premium before enrollment may be terminated. The new coverage period will begin the month following the last period for which a premium was paid. For example, if a state requires a monthly premium which is due on September 30 for coverage in October, the state could not terminate coverage until October 30. If the premium payment for October is received by October 30, coverage would continue for November. If payment is not received by October 30, the enrollee can be terminated from coverage. States are required to inform CHIP beneficiaries that failure to pay any required premium within at least 30 days after the beginning of a new coverage period will result in termination of coverage. Additional information about the premium grace period is available in SHO# 10-001.

Prior to disenrollment, families must receive reasonable notice and an opportunity to pay past due cost sharing. The disenrollment process must also provide families an opportunity to show that household income has declined, and if the income decline causes the child to be eligible for Medicaid or a lower level of cost sharing in CHIP, the state must enroll the child in Medicaid or adjust the child’s cost-sharing level as appropriate.

In the event that a family is disenrolled as a result of past due cost sharing, the state cannot establish a premium lock-out period that exceeds 90 days, continue to impose a premium lock-out period after the past due premiums have been paid, or require the collection of past due premiums or enrollment fees as a condition of eligibility for reenrollment once the lock-out period has expired.

Medicaid Expansion Cost Sharing

States with Medicaid expansion programs must follow the Medicaid cost sharing rules.