What is CHIP? Your Guide to Low-Cost Health Insurance for Children

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The Children’s Health Insurance Program (CHIP) provides free or low-cost health insurance for eligible children and, in some states, pregnant women. CHIP serves as a bridge for families who earn too much to qualify for Medicaid but cannot afford private health insurance.

CHIP ensures children have access to essential healthcare services including check-ups, immunizations, doctor visits, dental care, and more. This coverage helps families provide their children with the medical care they need without financial strain.

CHIP operates as a partnership between the federal government and individual states. While the federal government provides funding and guidelines, each state manages its own CHIP program. This structure explains why eligibility rules, benefits, and costs vary significantly depending on where you live.

You can apply for CHIP coverage any time of the year—there’s no need to wait for a special enrollment period.

Who is Eligible for CHIP?

Several factors determine if your child qualifies for CHIP, including age, insurance status, family income, citizenship or immigration status, and state residency.

Age Requirements

CHIP generally covers children and teens up to age 19.

Insurance Status

To qualify for CHIP, your child must be uninsured. This means they cannot be eligible for Medicaid and cannot currently have coverage through a private health insurance plan or a group health plan that is considered “creditable” coverage.

If your child is eligible for health coverage through a family member’s state government job, they might not qualify for CHIP. However, states can grant exceptions if the state employee plan costs more than 5% of family income or if the state meets specific contribution requirements.

Income Guidelines

CHIP targets families with incomes that exceed Medicaid limits but aren’t high enough to afford private insurance. Eligibility is based on household income compared to the Federal Poverty Level (FPL).

State Variation is Key: Income limits vary significantly from state to state. CHIP eligibility levels can range from 170% FPL up to 400% FPL depending on the state. This means a family might qualify in one state but not another, even with identical income.

MAGI Calculation: States use Modified Adjusted Gross Income (MAGI) to calculate income for CHIP and Medicaid eligibility. MAGI rules, introduced by the Affordable Care Act, were intended to simplify eligibility across different health programs. MAGI calculations often include a 5% FPL disregard, effectively raising the income limit slightly for some families.

Example Income Variations: The table below shows how dramatically income limits can differ across states (as of December 2023).

Note: California’s Separate CHIP covers children up to age 2 at 317% FPL statewide, and children up to age 19 at 317% FPL in only three counties. N/A indicates the state primarily uses Medicaid expansion for CHIP children in the specified age group or does not have a separate program listed in the source table.

Citizenship and Immigration Status

Generally, children must be U.S. citizens or “qualified non-citizens” to be eligible for CHIP.

Qualified Non-Citizens (QNCs): This category includes immigrants with certain statuses, such as Lawful Permanent Residents (Green Card holders), refugees, asylees, individuals paroled into the U.S. for at least a year, and others.

The Five-Year Bar: Federal law typically requires many QNCs, like Green Card holders, to wait five years after obtaining their qualifying immigration status before they can enroll in CHIP or Medicaid. This waiting period starts from the date the qualifying status is granted, not the date the person first entered the U.S.

Exceptions to the Bar: The five-year wait does not apply to all immigrants. Refugees, asylees, Cuban/Haitian entrants, victims of trafficking, certain Amerasian immigrants, Iraqi and Afghan special immigrants, veterans and active-duty military members (and their eligible family members with QNC status), and Compact of Free Association (COFA) migrants are exempt from the waiting period.

State Option for Coverage: Federal law gives states the option to eliminate the five-year waiting period for lawfully residing children and/or pregnant women. As of May 2023, 36 states plus DC and some territories have adopted this option, significantly expanding access for immigrant families. This creates an uneven landscape; access for otherwise eligible immigrant children during their first five years depends heavily on their state of residence.

Applying for Eligible Children: Families that include non-U.S. citizens can apply for eligible children. Applying for CHIP or Medicaid for a child will not impact the immigration status of other family members or affect their chances of becoming permanent residents or citizens.

State Residency

The child must live in the state where the family is applying for CHIP coverage.

What Health Services Does CHIP Cover?

CHIP provides comprehensive health coverage tailored to children’s needs. While benefits can vary slightly between states, all offer a robust package of services.

Commonly Covered Services

CHIP typically covers:

• Routine check-ups: Regular well-baby and well-child visits to monitor growth and development
• Immunizations: Vaccines to protect against childhood diseases
• Doctor visits: Appointments with primary care doctors and specialists
• Prescription drugs: Coverage for necessary medications
• Dental care: Check-ups, cleanings, fillings, and more
• Vision care: Eye exams and often eyeglasses
• Hospital care: Both inpatient stays and outpatient services
• Laboratory and X-ray services: Diagnostic tests ordered by a doctor
• Emergency services: Care for medical emergencies
• Mental health and substance use disorder services: Behavioral health care, including therapy and treatment

Benefit Requirements

States that run separate CHIP programs (distinct from their Medicaid programs) must cover certain benefits, including:

Dental Coverage: Separate CHIP dental benefits must be comprehensive, covering services “necessary to prevent disease and promote oral health, restore oral structures to health and function, and treat emergency conditions.” States can meet this requirement using a federally approved package or a benchmark package based on popular commercial or federal employee plans. You can find participating dental providers on your state’s CHIP website or InsureKidsNow.gov.

Behavioral Health Coverage: Separate CHIP programs must cover mental health and substance use disorder services. Federal “parity” rules require that limitations on these benefits are no more restrictive than limitations on medical or surgical benefits.

Vaccine Coverage: Separate CHIP programs must cover age-appropriate vaccines. This is different from Medicaid, which uses the federal Vaccines for Children (VFC) program.

State Flexibility

States have flexibility in designing their separate CHIP benefit packages. They can base coverage on specific benchmark plans (like the standard Blue Cross/Blue Shield federal employee plan), create a package that is “benchmark-equivalent,” or offer a package approved by the U.S. Department of Health and Human Services.

CHIP vs. Medicaid Benefits

Children enrolled in Medicaid (including those in Medicaid-expansion CHIP programs) receive benefits through the Early and Periodic Screening, Diagnostic, and Treatment (EPSDT) program. EPSDT is generally considered the most comprehensive benefit package, requiring states to cover any medically necessary service to correct or improve a child’s condition, even if that service isn’t typically covered under the state’s Medicaid plan.

Separate CHIP programs are not required to offer the full EPSDT benefit package, although some states choose to include it.

What Does CHIP Cost Families?

While CHIP provides low-cost health coverage, it may involve some out-of-pocket expenses, unlike Medicaid which is typically free for children. Your costs depend on your state’s specific CHIP program and your family’s income.

Free Preventive Services

Many essential preventive services come at no cost. Routine “well-child” doctor visits and dental check-ups are typically free, encouraging families to access important preventive care. States cannot impose cost-sharing for any well-baby and well-child care services.

Potential Costs

For other services in separate CHIP programs, these costs might apply:

Premiums: Some states charge a monthly premium (like a membership fee). For families with incomes at or below 150% of the FPL, premiums cannot exceed what is allowed under Medicaid rules (usually zero or very low).

Copayments/Coinsurance/Deductibles: You might pay a fixed amount (copayment) or a percentage (coinsurance) when receiving certain services, like non-preventive doctor visits or prescriptions. Some plans might have a deductible you pay before the plan starts sharing costs.

Cost Protections

The 5% Out-of-Pocket Maximum: A critical protection for families enrolled in CHIP is the federal limit on total costs. Your family’s total out-of-pocket expenses for CHIP coverage—including premiums, deductibles, copayments, and other charges—cannot exceed 5% of your annual household income.

Other Cost Protections:

• States cannot impose cost-sharing on American Indian or Alaska Native children enrolled in CHIP
• Rules prevent states from structuring cost-sharing to favor higher-income families over lower-income families
• States cannot charge more than one type of cost-sharing for the same service

Grace Periods and Disenrollment: If your state’s CHIP program charges premiums, you have important protections if you miss a payment:

• States must provide at least a 30-day grace period before terminating coverage
• Before disenrollment, families must receive proper notice and an opportunity to pay what’s owed
• The process must allow families to report decreased income; if lower income makes the child eligible for Medicaid or a lower CHIP cost-sharing level, the state must adjust coverage rather than disenroll
• If a child is disenrolled for non-payment, states cannot impose a “lock-out” period longer than 90 days
• States cannot require payment of past-due premiums as a condition of re-enrolling after the lock-out period

If your children are eligible for CHIP, they generally won’t qualify for Marketplace premium tax credits. CHIP is usually the most affordable option for eligible children. However, other adult family members might still qualify for savings on a Marketplace plan.

How to Apply for CHIP Coverage

You can apply for CHIP any time during the year—there’s no limited enrollment period like with some private insurance plans. If your child is found eligible, coverage can often start right away.

Two Main Ways to Apply

1. Through the Health Insurance Marketplace® (Healthcare.gov)

• Applying online at Healthcare.gov is often quickest. You’ll need to create an account (or log in) and complete a single application for your household.
• A major advantage of this pathway is that the Marketplace application checks eligibility for CHIP, Medicaid, and private health plans, including potential savings like premium tax credits.
• If anyone in your household might qualify for Medicaid or CHIP, the Marketplace securely forwards your application to your state’s Medicaid/CHIP agency.
• Your state agency will contact you regarding enrollment or if they need more information to confirm eligibility.
• You can also apply by phone: 1-800-318-2596 (TTY: 1-855-889-4325).

2. Directly Through Your State Medicaid/CHIP Agency

• You can always apply directly with your state’s agency responsible for Medicaid and CHIP.
• To find your state agency’s contact information and application procedures, use the state finder tool on Healthcare.gov or visit the state agency directory on Medicaid.gov.
• Another excellent resource is InsureKidsNow.gov, which provides state-specific program information and a helpline at 1-877-KIDS-NOW (1-877-543-7669).

Information Needed for Application

When applying, be prepared to provide:

• Names and dates of birth for everyone in your household
• Social Security numbers for those who have them
• Income information (pay stubs, W-2 forms, tax returns)
• Citizenship or immigration status information (birth certificates, immigration documents)
• Proof of state residency (driver’s license, utility bill)
• Details about any health insurance currently available to the family
• Information about other government benefits your family might receive

CHIP vs. Medicaid: Key Differences

CHIP and Medicaid together provide health coverage for nearly half of all U.S. children. While they share the goal of covering children, there are important differences between them.

Program Structure Options

States can set up their CHIP coverage in one of three ways:

1. Medicaid Expansion CHIP: The state uses federal CHIP funds to expand Medicaid to cover children at higher income levels. Children receive the full Medicaid benefit package and follow standard Medicaid rules.
2. Separate CHIP Program: The state creates a CHIP program entirely separate from Medicaid. These programs have more flexibility regarding benefit design and cost-sharing.
3. Combination Approach: The state uses both models, enrolling some CHIP-eligible children into Medicaid and others into a separate CHIP program, often based on income levels.

Key Differences

These structural choices lead to important differences:

Target Income Levels: CHIP covers children in families with incomes higher than the state’s Medicaid limits but generally too low to afford private insurance. Medicaid typically covers children in families with lower incomes.

Funding: Both programs receive federal and state matching funds. However, Medicaid is an entitlement program, meaning federal funding automatically adjusts to meet enrollment needs without caps. CHIP funding, while provided at a higher federal match rate, is capped annually for each state.

Entitlement to Coverage: Eligible individuals are legally entitled to Medicaid coverage; states cannot cap enrollment or create waiting lists. Separate CHIP programs do not provide a federal entitlement. In the past, some states with separate CHIP programs have implemented waiting lists or enrollment freezes when funding was limited.

Benefits: Medicaid provides comprehensive benefits for children through the EPSDT benefit, ensuring access to any medically necessary service. Separate CHIP programs offer states more flexibility in designing benefit packages. While required to cover core services, they aren’t mandated to include the full scope of EPSDT.

Cost-Sharing: States generally cannot charge premiums or copayments for children covered by Medicaid. States operating separate CHIP programs can charge premiums and other cost-sharing, although these costs are capped by federal law.

These differences mean that even within the same state using a combination approach, a child’s experience might change if their family income shifts them between Medicaid and separate CHIP eligibility.

Finding Your State’s CHIP Program

Because CHIP operates as a federal-state partnership, each state has significant flexibility in designing and running its program. While the core goal of covering children is the same everywhere, specific details vary depending on where you live.

Key State Variations

Program Name: States often give their CHIP and Medicaid programs unique names. For example, CHIP is known as “PeachCare for Kids” in Georgia or “NJ FamilyCare” in New Jersey. California combines both programs under the name “Medi-Cal.”

Income Eligibility Rules: The exact income levels required to qualify for CHIP differ significantly across states.

Covered Benefits: While all states offer comprehensive coverage and must meet federal minimums, the exact list of optional services covered can vary.

Costs: The amount families pay in monthly premiums or copayments for CHIP varies widely by state and income level.

Application Procedures: While the main application pathways are consistent, specific state processes might differ slightly.

Finding State-Specific Information

Given these variations, it’s essential to get information directly relevant to your state:

• InsureKidsNow.gov: This federal government website is dedicated to CHIP and children’s Medicaid. It features a state program finder where you can select your state to get detailed information about eligibility, benefits, and how to apply locally. You can also call their helpline at 1-877-KIDS-NOW (1-877-543-7669) for assistance. The site also helps families find local dentists who accept CHIP.
• Healthcare.gov: The Health Insurance Marketplace website provides links to state Medicaid and CHIP agencies.
• Medicaid.gov: For direct contact information for your state’s Medicaid and CHIP agency (phone numbers, websites), use the official directory.

Don’t hesitate to use these resources to check if your children might be eligible for CHIP or Medicaid. Applying is the best way to find out for sure, and these programs help ensure your children get the healthcare they need to grow up healthy and strong.

Our articles make government information more accessible. Please consult a qualified professional for financial, legal, or health advice specific to your circumstances.