CHIP stands for the Children’s Health Insurance Program. It’s a government health insurance program specifically designed for children in families that earn too much to qualify for Medicaid but not enough to comfortably afford private health coverage. Created in 1997 and expanded significantly over the years since, CHIP covers approximately 7 to 8 million children at any given time. It’s one of the most successful health coverage programs the U.S. government has ever run, and yet a substantial number of children who are eligible aren’t enrolled, often because their families don’t know the program exists or assume they earn too much to qualify.
Like Medicaid, CHIP is a joint federal and state program. The federal government provides matching funds and sets minimum requirements, and each state administers its own program with flexibility to expand eligibility, add benefits, and set modest premiums and copays within federal limits. That flexibility means CHIP programs look different from state to state. The income thresholds vary. The specific benefits may differ. The program might go by a different name entirely. In California it’s part of Medi-Cal. In New York it’s Child Health Plus. But the fundamental purpose is the same everywhere: make sure kids have health coverage.
Who CHIP Is Designed to Cover
CHIP was created to address a specific gap. Medicaid has income limits, and children above those limits didn’t qualify. Private insurance through the marketplace or an employer was often unaffordable for working families with moderate incomes. CHIP fills that space. It’s for families who are working, paying taxes, and earning a living but still struggling to afford private health insurance premiums for their kids.
The program covers children under 19 in most states, though some states extend coverage to age 21 through state-funded programs. To qualify, a child must be uninsured or not have access to affordable coverage through an employer plan. Income eligibility thresholds are set by each state and are typically between 200% and 300% of the federal poverty level, though some states go higher. In New York, Child Health Plus covers children in families earning up to 400% of FPL. In Texas, CHIP covers children in families up to 201% of FPL. Checking your specific state’s threshold is the only way to know for sure whether your children qualify.
What income percentage of FPL means in real dollars for 2025: 200% of FPL for a family of four is approximately $62,400 per year. 300% of FPL for that same family is about $93,600. That’s solidly middle-class income territory. CHIP isn’t just for very low-income families. Many two-income working households with children fall within CHIP eligibility and don’t realize it because they assume the program is only for people much further down the income scale.
How CHIP Differs From Medicaid
Medicaid and CHIP serve overlapping populations but they’re distinct programs with different funding structures and sometimes different benefit designs. Children who qualify for Medicaid based on income are enrolled in Medicaid, not CHIP. CHIP is for the income range above Medicaid eligibility. In most states, children qualify for Medicaid up to 133% of FPL, and CHIP covers the income range from there up to the state’s CHIP ceiling, which might be 250%, 300%, or 400% of FPL depending on the state.
In some states, the programs are administratively integrated and families don’t need to know which program their child is in. The state processes the application and enrolls the child in whichever program applies based on income. In other states, Medicaid and CHIP are more separately administered with different plan options and sometimes different provider networks. Either way, the application process is the same for families, and the eligibility determination is handled by the state agency.
Medicaid is funded with a federal matching rate that varies by state. CHIP has an enhanced federal matching rate, meaning the federal government pays an even larger share of CHIP costs, making it financially attractive for states to run robust CHIP programs.
What CHIP Covers
Federal law requires CHIP programs to cover a comprehensive set of benefits for children. Required benefits include routine well-child visits and preventive care, immunizations, sick care visits, dental services, vision care and eyeglasses, hearing services, hospital care both inpatient and outpatient, emergency services, laboratory and x-ray services, mental health and substance use disorder services, and prescription medications. The dental and vision coverage alone represents substantial value that many private insurance plans exclude or limit significantly.
CHIP programs are required to provide the Early and Periodic Screening, Diagnostic, and Treatment benefit, or EPSDT, which is a comprehensive preventive and developmental care standard mandated by federal law for all Medicaid and CHIP enrollees. EPSDT requires states to screen children for health, developmental, behavioral, and mental health issues at scheduled intervals, and then provide or arrange for all medically necessary treatment to address any conditions identified. This is one of the most thorough benefit mandates in American health insurance and means that CHIP children are entitled to care that might not be covered under a typical private plan’s benefit limits.
In most states, dental coverage through CHIP includes annual exams, cleanings, x-rays, fluoride treatments, fillings, and in many cases orthodontia when medically necessary. Vision coverage typically includes annual eye exams and corrective lenses. For a family where a child needs glasses or dental work, CHIP’s coverage can mean saving hundreds or thousands of dollars compared to paying out of pocket or purchasing limited supplemental dental and vision coverage through private insurance.
Mental health coverage in CHIP is provided on parity with medical benefits, meaning the plan can’t impose more restrictive limits on mental health care than it does on other medical services. For children dealing with anxiety, depression, ADHD, behavioral issues, or more serious mental health conditions, CHIP’s parity requirement means access to therapy, psychiatric services, and other mental health care without the benefit caps or higher cost-sharing that private plans sometimes impose on these services.
What CHIP Costs for Families
CHIP premiums, when they exist at all, are modest. Federal law sets a cap: a family’s CHIP premiums and cost-sharing combined cannot exceed 5% of household income. For families at the lower end of the CHIP income range, premiums are often $0. For families higher in the income eligibility range, premiums might be $30 to $50 per child per month. Compare that to what it costs to add a child to private family coverage through an employer plan, which can easily run $150 to $300 or more per month per child depending on the plan, and CHIP’s financial advantage becomes obvious.
Copays in CHIP programs are limited by federal rules and are generally small. You might pay $5 for a primary care visit or $3 for a generic prescription. Emergency room copays may be higher but are still capped. The out-of-pocket maximum for the year, including premiums and all cost-sharing, cannot exceed 5% of household income. That ceiling means that no matter how much your child needs care in a given year, your total spending through CHIP won’t become financially catastrophic.
Many families eligible for CHIP are currently paying significantly more for private insurance than they need to. If you’re covering your children through an employer plan by adding them to a family or employee-plus-children tier, and your family income is below the CHIP threshold in your state, you may be able to enroll your children in CHIP and pay little or nothing compared to what you’re currently contributing. The private coverage isn’t necessarily better. It’s just more expensive. Checking CHIP eligibility and comparing it to your current situation is worth the time.
How CHIP Enrollment Works With the ACA Marketplace
When you apply for coverage through HealthCare.gov for a family that includes children, the marketplace automatically evaluates those children for Medicaid and CHIP eligibility. If they qualify, the marketplace tells you and routes their enrollment to your state’s program. You don’t need to apply separately to Medicaid or CHIP in most states. The marketplace application handles it all.
A common arrangement for families with moderate incomes is that the adults enroll in a marketplace plan using their premium tax credit while the children are enrolled in CHIP. This split-family coverage situation is perfectly normal and is exactly what the system is designed to accommodate. Your household size, including the CHIP-enrolled children, still counts toward your premium tax credit calculation for the adults’ marketplace coverage. The children being in CHIP doesn’t reduce the household size you use when calculating your subsidy.
If you apply for marketplace coverage and the application determines your children are CHIP-eligible, you’ll be directed to complete the CHIP enrollment through your state’s process. In some states this happens seamlessly within the marketplace application. In others there’s a handoff to the state CHIP agency. Either way, the coordination between the marketplace and state programs is designed to minimize gaps and confusion for families navigating both systems at once.
Applying for CHIP Directly
Unlike marketplace coverage, CHIP has no annual open enrollment window. You can apply at any time throughout the year. If your child becomes uninsured, if your income drops to within the CHIP eligibility range, or if your child loses coverage through another plan, you can apply immediately. Coverage typically begins within a few weeks of a completed application in most states, and some states offer presumptive eligibility that can start coverage more quickly while the full application is being processed.
Applications can be submitted through your state’s Medicaid and CHIP agency website, by phone through the state’s enrollment hotline, through HealthCare.gov, or in person at certain community locations including hospitals, Federally Qualified Health Centers, and social service offices. Documentation requirements vary by state but typically include proof of the child’s age, proof of income for the household, proof of residency in the state, and proof of the child’s citizenship or eligible immigration status. Many states have simplified the application process for working families who may not have extensive records readily available.
If you apply and your child is approved, coverage is generally retroactive to the date of the application or the date the child became eligible, depending on state rules. That can matter if your child needs care while the application is being processed. Don’t delay applying because you’re waiting to see if you qualify. Apply first. If you qualify, you’re covered. If you don’t, you haven’t lost anything by applying.
Common Reasons Eligible Children Aren’t Enrolled
The primary reason eligible children aren’t in CHIP is that their parents don’t know they qualify. Working families with household incomes of $60,000 or $70,000 often don’t think of themselves as being in a government health program income range. But at 250% or 300% of FPL in most states, their children qualify. The income thresholds are higher than most people expect.
Another common barrier is the assumption that CHIP is inferior to private coverage. That’s not accurate. CHIP’s benefit package for children is comprehensive. The dental and vision coverage is often better than what private plans include. The out-of-pocket protection is strong. The providers in CHIP managed care networks are the same hospitals, pediatricians, and specialists who serve privately insured children in most markets. Choosing to pay $250 per month to keep a child on a private plan when CHIP covers the same child for $30 or nothing is spending money you don’t need to spend.
A third barrier is the stigma some families attach to public programs. The instinct to avoid government assistance is understandable but misapplied here. CHIP is health insurance for working families with children. It’s funded by federal and state tax dollars. Your family has almost certainly paid into the tax base that funds it. If your children qualify, enrolling them is exactly what the program was created for. There’s no asset test, no work requirement for this benefit, and no application burden beyond basic documentation. You fill out a form, show your income, and your children get covered. That’s it.
When Your Child Ages Out of CHIP
CHIP covers children up to age 19 in most states, and some states extend it to 21. When a child ages out of CHIP, they need to transition to another form of coverage. If they’re still a dependent on your taxes and you have marketplace coverage, they can be added to your marketplace plan. They may also be eligible for their own marketplace coverage with their own premium tax credit if they’re filing their own taxes. Young adults under 26 can remain on a parent’s employer-sponsored plan under the ACA’s dependent coverage rule, which applies regardless of CHIP history. If they’re uninsured, they can apply for marketplace coverage during the special enrollment period triggered by losing CHIP coverage.
States are required to send families notice before a child’s CHIP coverage ends due to aging out, and the notice should explain transition options. Don’t wait for the notice if you know your child is approaching the eligibility age limit. Plan the transition ahead of time so there’s no gap in coverage. An uninsured period at 18 or 19 is a real risk, particularly for young people who may be starting college, taking on new activities with injury risk, or dealing with emerging health conditions that need continued treatment.