Created has part of the Balanced Budget Act of 1997, CHIP provides federal matching funds to states to provide health insurance to children in families who income is too high to qualify for medicaid, but too low to be able to afford private coverage.
Under CHIP every state has expanded their health insurance coverage of children, which almost all states providing access to families living up to 200% of the Federal Poverty Line (FPL). 1
CHIP’s major components: 2
CHIP federal matching funds, sent to states a block grants, can be used to provide health insurance to children in the coverage gap through new health insurance programs or through extending medicaid.
Funded at a higher federal matching rate than Medicaid (65 to 82% depending on the state), although funding is capped.
A statutory formula accounts for actual use of CHIP funds and is adjusted for health care inflation and child population growth to determine state by state allotments.
Eligible populations are children and pregnant women, parents and other adults do not qualify.
States have broad discretion in terms of income eligibility requirements. Most states prided coverage to 200% of the FPL while some provided coverage up to 300% of the FPL.
Since CHIP was enacted, the number of children without health insurance has greatly decreased. 3
For more on the full text of the Balanced Budget Act of 1997, see here.
Endnotes
1. https://www.medicaid.gov/about-us/program-history/index.html
2. https://ccf.georgetown.edu/2017/02/06/about-chip/
3. https://www.macpac.gov/subtopic/history-and-impact-of-chip/