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CHIP Insurance: Understanding the Children’s Health Insurance Program

Sept. 30, 2016
Finding Health Insurance, Health
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If you can’t afford health insurance for your entire family and you don’t qualify for Medicaid, you fall into a coverage gap, but your kids probably don’t have to go uninsured.

The Children’s Health Insurance Program is health insurance for uninsured kids whose parents make too much money to qualify for Medicaid. Together, CHIP and Medicaid provide health insurance for more than 35 million children in the U.S., according to the federal government. Here’s what to know about CHIP and Medicaid for children.

The difference between CHIP and children’s Medicaid

CHIP and Medicaid are closely aligned, and CHIP is often thought of as a part of Medicaid. While that’s true, states often design their CHIP programs a bit differently from Medicaid. States may:

  • Have a CHIP program separate from Medicaid.
  • Use CHIP funds to extend Medicaid coverage to CHIP-eligible children.
  • Provide a combination of these two options.

Most states have a combination program, according to the Children’s Hospital Association. However, states can restructure their programs as funds allow, so kids in CHIP one year may become Medicaid beneficiaries the next year, and vice versa.

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Who qualifies for CHIP

In general, the people who qualify for CHIP insurance have low incomes and are:

  • Children in households with incomes that are too high to qualify the entire family for Medicaid.
  • Children of state employees.
  • Pregnant women with low incomes.

Within those groups, CHIP eligibility varies from state to state and depends on annual household income compared with the federal poverty level. Here’s an idea of what those income levels might be, depending on your family size; in Alaska and Hawaii, the poverty levels are slightly higher.

Number of family membersPoverty level200% of poverty level300% of poverty level400% of poverty level
Add this amount for each additional person:$4,160$8,320$12,480$16,640

As of January 2016, Arizona had the lowest eligibility limit for children’s coverage, 152% of the poverty level, while New York had the highest, 405%, according to the Kaiser Family Foundation.

Hover over your state on the map below to see the income eligibility cutoff in your state for CHIP coverage. Some states have lower limits for infants and children under 5.

Five states let parents buy CHIP coverage for their uninsured children regardless of their income status, according to the foundation. While most CHIP and Medicaid benefits for children are free, higher-earning parents in the buy-in program pay premiums.

StateParents pay at-cost premiums if household income is more than:
Florida215% of poverty level
Maine213% of poverty level
New York405% of poverty level
North Carolina216% of poverty level
Pennsylvania319% of poverty level

Eligibility levels are different for pregnant women than they are for children. In 33 states, CHIP or Medicaid is available to pregnant women making more than 200% of the poverty level, according to the foundation. Hover over your state in the map below to see the eligibility level for pregnant women.

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What CHIP pays for

Kids’ benefits under Medicaid and CHIP are comprehensive, but the programs differ slightly depending on your state. Whether your state has a CHIP, Medicaid or combination program will determine the specific health plan for your child. However, all children can get any medically necessary treatment as well as dental, hearing and vision benefits.

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What CHIP costs

Some families pay premiums for CHIP. In 30 states, parents pay premiums for children in CHIP or Medicaid, depending on annual income, according to the foundation. Those who do pay premiums generally pay less than $50 per month per child, although some premiums are higher.

Families that have children with greater medical needs are likely to spend more out of pocket, but you won’t have to spend more than 5% of your family’s annual income on out-of-pocket expenses. Most families don’t reach this cap, according to the Children’s Hospital Association.

In 26 states, parents may have to pay some amount, called cost-sharing, for treatment or medicine for children in Medicaid or CHIP. Preventive services are covered free of charge, but other services that might require parents to pay a deductible or copay are:

  • Nonpreventive doctor visits, like a strep throat appointment.
  • Emergency room visits.
  • Nonemergency use of the ER, as determined by a doctor at the hospital.
  • Inpatient hospital care.
  • Prescription drugs.

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How to apply for CHIP

You don’t have to wait for any open enrollment period to apply for CHIP insurance, as you would with private health insurance — you can apply any time of year. What’s more, a Medicaid application doubles as a CHIP application if you have children, so you can just submit one application for the whole family.

You can apply in three main ways:

  • Over the phone, by calling Medicaid’s service line at 1-800-318-2596.
  • Online, by filling out an application on or your state’s Medicaid website.
  • By downloading and filling out an application from your state’s Medicaid website and mailing or bringing it to a local Medicaid office.

In many states, you’ll hear back in as little as 24 hours on whether your family qualifies for Medicaid or CHIP. If you aren’t eligible for Medicaid but your kids are eligible for CHIP, you can enroll them right away.

Lacie Glover is a staff writer at NerdWallet, a personal finance website. Email: [email protected]. Twitter: @LacieWrites.