The Children’s Health Insurance Program (CHIP) is a joint federal and state program that provides health coverage to uninsured children in families with incomes too high to qualify for Medicaid, but too low to afford private coverage. Please see the Children’s Annual Enrollment Reports for more information on current and historical enrollment. The upper eligibility levels in separate CHIPs range from as low as 170 percent of the Federal poverty level (FPL) up to 400 percent of the FPL, and vary by state. CHIP and Medicaid eligibility levels can be viewed on the Medicaid and CHIP Eligibility Levels page.
CHIP was originally passed into law under the Balanced Budget Act of 1997, and most recently extended through federal fiscal year 2027 under the Helping Ensure Access for Little Ones, Toddlers, and Hopeful Youth by Keeping Insurance Delivery Stable Act (HEALTHY KIDS Act) and the Advancing Chronic Care, Extenders and Social Services Act (ACCESS Act).
The Affordable Care Act established a consistent methodology for determining income eligibility, which is based on Modified Adjusted Gross Income (MAGI). MAGI is used to determine financial eligibility for CHIP, Medicaid, and the health insurance marketplace. Using one set of income counting rules and a single application across programs, is intended to make it easier for people to apply and enroll in the appropriate program.
The MAGI-based methodology considers taxable income and tax filing relationships to determine financial eligibility for CHIP. This methodology does not allow for income disregards that vary by state or by eligibility group and does not allow for an asset or resource test. Additional information on the MAGI-based methodology.
Federal law provides states with the option to cover targeted low-income children and targeted low-income pregnant women under a separate CHIP. In addition, states can provide coverage to certain groups that were historically excluded from CHIP, such as children or pregnant women that are lawfully residing, or have access to public employee coverage. Descriptions of these options are provided below.
Targeted Low-Income Children
In order to be eligible for CHIP, a child must be:
- Under 19 years of age,
- Uninsured (determined ineligible for Medicaid, and not covered through a group health plan or creditable health insurance),
- A citizen or meet immigration requirements,
- A resident of the state, and
- Eligible within the state’s CHIP income range, based on family income, and any other state specified rules in the CHIP state plan.
The following children cannot be eligible for CHIP:
- Inmates of a public institution,
- Patients in an institution for mental diseases, and
- Children who are eligible for health benefits coverage under a State health benefits plan due to a family member’s employment with a public agency (unless a state qualifies for either the maintenance of agency contribution, or hardship exception described below).
Within these guidelines, states have the flexibility to adopt their own eligibility standards. For example, some states have designed programs for specific geographic areas, or for children with a disability status. However, states are precluded from establishing certain types of eligibility criteria, such as discriminating on the basis of diagnosis.
The eligibility criteria for a targeted low-income child is described in Section 2110(b) of the Social Security Act.
Targeted Low-Income Pregnant Women
States have the option to provide coverage, such as prenatal, delivery, and postpartum care, to targeted low-income uninsured pregnant women under the CHIP state plan. States must adhere to several types of conditions in order to cover pregnant women, such as:
- Cover children under 19 years of age under Medicaid or CHIP, up to at least 200 percent of the FPL, and
- Cover pregnant women under Medicaid up to at least 185 percent of the FPL.
This is not an exhaustive list of the conditions that states must meet in order to cover pregnant women in CHIP.
Infants born to pregnant women in CHIP are required to be automatically deemed eligible for Medicaid or CHIP, without an application or further determination of eligibility. These infants are covered until the child turns one year of age. States also have the option to provide deemed eligibility to a child born to a mother who, on the date of the child’s birth, is covered as a targeted low income child under CHIP.
For guidance in this area, please see Section 2112 of the Social Security Act and State Health Official (SHO) letter # 09-006.
Lawfully Residing Targeted Low-Income Children and Pregnant Women
States have the option to provide CHIP and Medicaid coverage to children and pregnant women who are lawfully residing in the United States and are otherwise eligible for coverage, including those within their first five years of having certain legal status. If states do not adopt this option, federal law requires a 5-year waiting period before many legal immigrants are permitted to enroll in Medicaid and CHIP. Learn more about providing health coverage to lawfully residing children and pregnant women at 2107(e)(1)(N) of the Social Security Act, and in SHO# 10-006. A list of states providing Medicaid and CHIP coverage to lawfully residing children and/or pregnant women.
Targeted Low-Income Children with Access to Public Employee Coverage
States have the option to cover children of state employees if the state can demonstrate that it meets one of the two following conditions:
- Maintenance of Agency Contribution Condition: For this condition to be met, states must demonstrate that they have been consistently contributing to the cost of employee coverage, with increases for inflation, since 1997.
- Hardship Condition: For this condition to be met, states must demonstrate that the coverage currently available through the public employee system poses a financial hardship for families. In making a hardship determination, states would assess whether the annual aggregate premiums and cost-sharing imposed by the state health benefits plan would exceed 5 percent of a family’s income during the year the child would be enrolled in CHIP.
For more information on this provision, please see section 2110(b)(6) of the Social Security Act.
Federal law provides states with the option to implement a variety of enrollment strategies, including express lane eligibility, continuous eligibility, and presumptive eligibility in CHIP. These provisions are described below.
Express Lane Eligibility
States have the option to implement express lane eligibility (ELE), which is a simplified process for determining and re-determining eligibility for CHIP and Medicaid. States that use ELE can rely on findings for income, household size, or other factors of eligibility from another program designated as an express lane agency to facilitate enrollment in these programs. Express lane agencies may include: Supplemental Nutrition Assistance Program, Temporary Assistance for Needy Families, Head Start, National School Lunch Program, and Women, Infants, and Children. ELE has been extended through FY 2027 under the Helping Ensure Access for Little Ones, Toddlers and Hopeful Youth by Keeping Insurance Delivery Stable Act (HEALTHY KIDS Act) and the Advancing Chronic Care, Extenders and Social Services Act (ACCESS Act). More information about the extension of ELE through the HEALTHY KIDS and ACCESS Acts is available in SHO# 18-010. For additional information on this provision, please see section 2107(e)(1)(H) of the Social Security Act, and SHO# 10-003.
States have the option to provide children with 12 months of continuous coverage under CHIP and Medicaid even if the family experiences a change in income during the year. Continuous eligibility is a valuable tool that helps states ensure that children stay enrolled in the health coverage for which they are eligible and have consistent access to needed health care services. For more information on this provision, please see section 2105(a)(4)(A) of the Social Security Act. A list of states providing continuous eligibility in Medicaid and CHIP.
States have the option to implement presumptive eligibility under CHIP or Medicaid. Under this option, states may use title XXI funds to pay costs of CHIP coverage during a period of presumptive eligibility pending the screening process and a final eligibility determination. For more information on this provision, please see section 2107(e)(1)(P) of the Social Security Act. A list of states providing presumptive eligibility in Medicaid and CHIP.
Maintenance of Effort
States must maintain Medicaid and CHIP eligibility standards, methodologies, and procedures for children that are no more restrictive than those in effect on March 23, 2010 as a condition of receiving federal funding for Medicaid. This maintenance of effort (MOE) provision is applicable to states with eligibility levels that do not exceed 300 percent of the FPL. States with eligibility levels above 300 percent of the FPL have the option of maintaining coverage levels or reducing them to 300 percent FPL. The MOE provisions in Medicaid and CHIP have been extended through Federal Fiscal Year 2027 under the HEALTHY KIDS and ACCESS Acts, and can be found at sections 2105(d)(3), 1902(a)(74), and 1902(gg)(2) of the Social Security Act. For more information about the extension of MOE, please see SHO# 18-010.
Monitoring Substitution of Coverage in CHIP
States are required to include in their state plan a description of procedures used to ensure that CHIP coverage does not substitute for coverage under group health plans. States use various procedures to prevent substitution of coverage, such as monitoring survey data or private insurance databases, or applying a waiting period for individuals who are no longer enrolled in private coverage. This requirement can be found at section 2102(b)(3)(C) of the Social Security Act. Additional information on states’ specific CHIP waiting period policies.
Waivers and Demonstrations
States may apply to CMS for section 1115 demonstration authority if interested in waiving title XXI rules that are applicable for a population in the CHIP state plan.
Third Party Liability (TPL)
States are required to take all reasonable measures to ascertain the legal liability of third parties both in CHIP and Medicaid. Although children must be uninsured to qualify for CHIP, there may be situations where other types of third parties may be liable for some health expenses, such as auto insurance following an automobile accident. States must identify potentially liable third parties, determine the liability of third parties, avoid payment of third party claims, and recover reimbursement from third parties as appropriate. In states that have continuous eligibility, obtaining other health insurance coverage post the initial eligibility determination will not impact eligibility until annual renewal, however, states are obligated to implement TPL policies.
The application of TPL to CHIP became effective February 9, 2018. Section 53102(d) of the Balanced Budget Act (BBA) of 2018 amended section 2107(e)(1)(B) of the Social Security Act to apply Medicaid TPL requirements at section 1902(a)(25) of the Act to CHIP. More information is available in CMCS Informational Bulletin-June 1, 2018.