“Stairstep” Children Moved from CHIP to Medicaid Receive Better, More Affordable Coverage

The Affordable Care Act (ACA) aligned coverage for more than half a million low-income, school-aged children in 22 states that were previously covered under different programs. Prior to 2014, state Medicaid programs were required to cover children of different age groups at different minimum income eligibility thresholds. Young children under age six with family incomes up to 138 percent of the Federal Poverty Level (FPL) were covered in Medicaid, whereas children ages 6-18 were only required to be covered up to 100 percent FPL. While states had the option to align Medicaid eligibility levels for children of all ages at 133 percent FPL or higher, many instead placed the older children above the poverty line in separate Children’s Health Insurance Programs (CHIP). This created a ‘stairstep’ coverage structure in many states, where young children were in Medicaid while school-aged children – often older siblings—received coverage in separate CHIP programs. The ACA required that all states align the minimum threshold for Medicaid eligibility for all children under the age of 18 to 138 percent of the FPL.