What is CHIP?

Individuals and families who can't afford health insurance may qualify for state Medicaid coverage as long as their income is below a certain level. Some states have expanded Medicaid coverage in order to serve low-income people whose income isn't otherwise low enough to qualify. But what about children who are in the coverage gap (also called the "donut hole")?

The Children's Health Insurance Program, or "CHIP," was established to address this discrepancy by expanding coverage options for children. The program is closely linked to Medicaid and also covers pregnant women in a handful of states.

What is CHIP? The Basics

Similar to Medicaid, CHIP (formerly known as "SCHIP") is a federally mandated program administered through the states. Eligibility requirements and coverage vary by state, as long as they conform to broad federal guidelines, but plans in all states provide some level of comprehensive health care coverage.

CHIP, the largest expansion of children's public health care coverage since the establishment of Medicaid in 1965, was created through legislation and signed into law by President Clinton in 1997.

CHIP Eligibility

Eligibility for the CHIP program varies by state, but participants must be under the age of 18. However, the federal Health Insurance Marketplace will automatically send your information to your state agency if anyone in your household qualifies (after applying through the Marketplace). Alternatively, you may call the Marketplace at 1-800-318-2596 (TTY: 1-855-889-4325) and speak with a representative.

Generally, eligibility is determined by your household income (based on modified adjusted gross income, or MAGI) as it relates to federal poverty guidelines. MAGI is adjusted gross income plus any untaxed foreign income, Social Security benefits, or tax-exempt interest. Federal poverty guidelines change frequently, but are based on the number of people in a given household. Eligibility is expressed as a percentage of the poverty level.

For example, the 2018 federal poverty level for a family of four is $25,100. In Illinois, a family of four earning no more than 142 percent of the poverty level -- or $35,642 -- would be eligible for Medicaid. But if they earn more than that, their children may be eligible for CHIP if the household earns less than 313 percent of the poverty level (or $78,563).

New York State offers the greatest coverage for CHIP, at 400 percent of the poverty level, while North Dakota offers the least at just 170 percent. However, it's important to consider how the cost of living greatly differs around the country relative to the federal poverty guidelines.

The following states (as of 2016) offer CHIP coverage to pregnant women: Colorado, Missouri, New Jersey, Rhode Island, and Virginia.

What CHIP Covers

As noted earlier, CHIP coverage varies by state, within certain federal guidelines. Coverage also depends on whether your child has CHIP coverage through Medicaid expansion or separate CHIP coverage.

Medicaid Expansion CHIP Benefits

If benefits are provided through state Medicaid expansion, then they'll conform to the standard Medicaid benefit package provided by the state. This includes early and periodic screening, diagnostic, and treatment (EPSDT) services, consisting of medically necessary services.

Separate CHIP Benefits

If your child has separate (non-Medicaid) CHIP benefits, coverage will depend on whether your state provides benchmark, benchmark-equivalent, or Secretary-approved coverage:

• Benchmark Coverage is based on either: (1) the Blue Cross/Blue Shield preferred provider option plan offer to federal employees; (2) the state employee's coverage plan; or (3) the HMO plan with the state's largest commercial, non-Medicaid enrollment.
• Benchmark-Equivalent Coverage must be actuarially equivalent (i.e. same value as benchmark coverage) and include inpatient/outpatient hospital services; physician's services; surgical and medical services; lab and x-ray services; and well-baby and well-child care (including immunizations).
• Secretary-Approved Coverage is any other type of health care coverage approved by the U.S. Health and Human Services Secretary.

CHIP Dental Benefits

Medicaid expansion CHIP coverage must include dental services "necessary to prevent disease and promote oral health, restore oral structures to health and function, and treat emergency conditions." But states offering separate CHIP benefits may choose between two options:

1. Dental benefits meeting CHIP dental care guidelines (i.e. those required by Medicaid Expansion CHIP); or
2. A benchmark dental benefit package that is substantially equal to either the most popular federal plan for dependents, the most popular state employee plan for dependents, or dental coverage offered through the most popular commercial insurer in the state.

Need Legal Help Securing CHIP Benefits? Contact a Local Attorney

Depending on your household income and the policies of your state, your children may be eligible for CHIP benefits. While it's typically not necessary to consult with an attorney in order to secure these benefits, every situation is unique. If in doubt, reach out to an experienced health care attorney near you.