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The Children’s Health Insurance Program (CHIP)

Summary

The Children’s Health Insurance Program (CHIP) is a federal-state financed program that provides health insurance to about 9 million children in families who are ineligible for Medicaid and unable to purchase private coverage.  Since its inception in 1997, CHIP, together with Medicaid, has helped to reduce the number of uninsured children by a remarkable 68 percent. CHIP has a proven track record of providing high-quality, cost-effective coverage for low-income children and pregnant women in working families. 

CHIP is funded jointly by the federal government and states through a formula based on the Medicaid Federal Medical Assistance Percentage (FMAP). As an incentive for states to expand their coverage programs for children, Congress created an “enhanced” federal matching rate for CHIP that is generally about 15 percentage points higher than the Medicaid rate — averaging 71 percent nationally. For example, if a state has a 50 percent match rate for Medicaid, they may have a 65 percent match rate for CHIP. Get more information on FMAP rates for Medicaid by state.

On September 30, 2017, federal funding for CHIP expired for a period of months because Congress did not intervene and pass legislation to extend funding for the program.  This caused great instability for states administering the program and for families who relied on CHIP coverage and, in some instances; states began taking measures to shutter their CHIP programs due to lack of funds.  Fortunately, as part of a continuing resolution to fund the federal government, legislation was enacted on Jan. 22, 2018 to reinstate funding for CHIP for five years until 2023. Legislation was later enacted in February 2018, the Bipartisan Budget Act of 2018, that provided an additional four years of funding for CHIP giving the program a 10-year combined reauthorization.

ACP has been a staunch supporter of CHIP over the years and has advocated for a long-term extension (at least five years) of funding for the program.  ACP also joined forces in 2017 with a coalition of five other front-line physician organizations to advocate for continued funding for CHIP and other key federal workforce programs that support primary care.

Resources