In its 25-year history, the Children’s Health Insurance Program (CHIP) has established itself as a critical piece of the federal-state response to children’s health care needs. CHIP, signed into law on August 5, 1997, was created to build on the success of Medicaid by giving states the opportunity to receive enhanced federal matching funds to expand affordable health coverage to children in families that earn too much to qualify for Medicaid but too little to afford private health insurance. In addition to covering over 6 million children directly, CHIP has spurred outreach and enrollment simplification efforts that have resulted in more eligible children receiving Medicaid.
Health coverage is essential to a healthy childhood. Research finds public health coverage is associated with improved health, reduced disability, greater educational attainment, and better financial outcomes when children reach adulthood. State and federal policymakers can do more to help children thrive by removing barriers to enrollment in Medicaid and CHIP and making other improvements.
To commemorate CHIP’s 25th birthday, we take a closer look at how CHIP works with Medicaid to improve children’s health coverage and offer recommendations for state and federal leaders to make CHIP work even better for children.
#1 CHIP and Medicaid Successfully Work Together to Reduce Child Uninsured Rate
Over the past 25 years, CHIP and Medicaid have sharply reduced the rate of uninsured children in the U.S. Together, they have successfully kept children connected to health coverage and played an especially important role during economic downturns and public health emergencies.
#2 States Set CHIP Income Eligibility
States have considerable flexibility in designing their CHIP programs – including establishing income eligibility guidelines for children. The federal median guideline is 255%FPL or $58,727 for a family of 3. Eligibility levels vary substantially from state to state. Access to CHIP in some states is limited due to restrictive income eligibility levels that don't align with family needs.
#3 States Choose CHIP Program Design
States can choose whether to accept funding and provide coverage to children through their Medicaid program or by establishing a separate CHIP program, or a combination of both. One-third of states cover all CHIP children in Medicaid, while most states have combination programs that enroll some children in Medicaid and some in separate CHIP coverage (see map below). As a result, the majority of children covered by CHIP are now enrolled in CHIP-funded Medicaid programs. CHIP-funded Medicaid programs are generally more administratively efficient for states and provide better coverage and financial security protection for children and families.
#4 States Have Options Available to Streamline Enrollment and Remove Barriers to Coverage
Following are some of the key policy options available to states to keep more eligible children connected with their Medicaid or CHIP health coverage:
- Guarantee 12 Month Continuous Eligibility
Continuous eligibility ensures children stay enrolled, even if their family experiences fluctuations in income, which are often modest and temporary. Consistent access to health care, including management of chronic conditions and care coordination, improves children’s health status and well-being and drives more efficient health care spending. Importantly, continuous eligibility mitigates the negative effects of income volatility that disproportionately impact low-income families and essential workers.
- Remove Premiums
Research shows that charging premiums creates financial and administrative barriers to enrolling children in CHIP and hits those earning under 200%FPL the hardest. Many states have eliminated premiums and some that still charge premiums have paused them during the COVID-19 public health emergency. At least one state that paused premiums during the PHE has announced it will not reinstate them when the emergency ends.
- End Waiting Periods
Waiting periods create unnecessary barriers between children and the health coverage they need. Originally conceived of as a measure to prevent the dropping of employer-sponsored coverage, states are currently permitted to establish waiting periods of up to 90 days before children can be enrolled in CHIP coverage. Many states have dropped their waiting periods over the years, but 12 states still have waiting periods—10 of which are for the maximum permissible length of 90 days. This provision amounts to a forced period of uninsurance for children during which they may miss needed preventive or acute care and families may incur large medical bills. There is no evidence that these policies are preventing the dropping of employer-sponsored coverage and they should be eliminated so that eligible children don’t have to wait to get the care they need.
- Expand Coverage for Immigrant Children
CHIP covers citizens and certain immigrants, including refugees and other humanitarian immigrants. When CHIP was reauthorized in 2009, states were granted the opportunity to waive the 5-year waiting period before covering lawfully residing immigrant children in both Medicaid and CHIP. A majority of states have adopted this option for children. Federal funds may not be used to cover undocumented children (except for emergency or pregnancy-related services), however, a growing number of states cover immigrant children who do not qualify for federal funding with state-only funds.
- Adopt Presumptive Eligibility
Through the use of presumptive eligibility (PE), states can train qualified entities to assess Medicaid and/or CHIP eligibility and temporarily enroll children while the regular application is being processed. States have a choice of qualified entities but health care providers top the list since they are most likely to encounter eligible children who are uninsured and in need of care. Getting eligible children access to care as quickly as possible can help prevent health problems from getting worse and becoming more expensive and difficult to treat. Presumptive eligibility will be a helpful tool for states to connect children to care quickly if the state is experiencing delays in processing applications when the public health emergency continuous coverage protection lifts. Children who are disenrolled during the unwinding of the public health emergency may submit missing information or paperwork and have their eligibility reconsidered without completing a new application. But with delays in processing, they too may need temporary access to care through presumptive eligibility.
Looking to the Future
The nation has made enormous progress in reducing the number of uninsured children thanks to Medicaid and CHIP; however, millions are at risk of a disruption or loss of coverage when the public health emergency continuous coverage protections are lifted. Children who face additional barriers to good health as a consequence of income, geography, race, language barriers, or all of the above, are most likely to suffer the consequences if states don’t take the time to get it right when they lift the continuous coverage protection.
Removing barriers to enrolling and keeping children enrolled in public coverage, making CHIP funding permanent, and providing all children with continuous coverage through CHIP and Medicaid would benefit children and society as a whole as research shows access to public coverage is associated with health and educational gains that provide a strong return on investment.
For more on our vision for the future of CHIP, see "Future of Children's Coverage: Next Steps for CHIP."