Structure

CHIP builds off Medicaid and the child health coverage that was in place through the program immediately before CHIP was created. More specifically, states can use their federal CHIP funds to finance coverage for children whose family incomes are too high to qualify for Medicaid under the rules the state had in place as of June 1997. States can use their CHIP funds to expand Medicaid beyond the June 1997 levels, cover children through a separate program, or combine the two approaches.

As of April 2009, 11 states (including the District of Columbia) opted to use CHIP funds to expand their Medicaid programs. In 40 states, CHIP funds are used to run a combination or separate health insurance program (Kaiser Commission on Medicaid and the Uninsured, January 2009).