Children's Health Insurance Program (CHIP)

What is the Children's Health Insurance Program (CHIP)?

Officiated in 1997 with the Balanced Budget Act, the Children’s Health Insurance Program (CHIP) was implemented to reduce the number of uninsured children across the United States. CHIP expands coverage for children from low- and moderate-income working families who are ineligible for Medicaid and cannot afford private coverage. CHIP is a joint-funded program administered on a state level, so each state sets its own requirements for eligibility based on federal guidelines.

The Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA) was signed into law on February 4, 2009 — extending CHIP and expanding the program to cover an addition 4 million children and pregnant women. This legislation provided states with new funding, programmatic options, and a range of new incentives for covering children through Medicaid and CHIP. A major goal of this legislation was to better support states in developing strategies that improve health care coverage for children in need.

The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) extended CHIP funding for an additional two years. This extra funding expired on September 30, 2017, and many states’ reserves depleted in response. Congress delivered some short-term funding for early 2018 to help alleviate strain, but fund exhaustion remained imminent for many states.

On January 22, 2018, Congress passed a six-year extension to CHIP — ensuring state funding through 2023. Congress then again extended CHIP funding through September 30, 2027 with the Healthy Kids and Access Acts on October 5, 2018.

Why is CHIP important?

CHIP acts as an expansion to Medicaid. Children who are too far above the federal poverty line to qualify for Medicaid but still lack the family income to purchase private healthcare coverage can be protected and supported by CHIP. Together, the two programs have significantly reduced the rate of uninsured children in America. From the enactment date of CHIP (1997) to 2012, the rate of uninsured children decreased from 14 percent to 7 percent.