Introduction

The Children's Health Insurance Program (CHIP) is considered as a program which are being

administered by US health department. It helps providing matching funds to all the states for
health insurance. It includes families having children. The US had designed this program for
covering families that have children, and earn modestly. Therefore, they become eligible in terms
of qualifying for Medicaid. The US has designed CHIP as a federal-state partnership which can
be considered quite similar to Medicaid. The individual states run programs as per set
requirements set by the federal Center for Medicaid and Medicare Services. The states are
permitted to design their own policies of CHIP within broader federal guidelines, which result in
variation with reference to benefits, eligibility, as well as administration in different states.
Private companies are contracted by many states in terms of administering few portions of their
benefits of CHIP. Authority has been received by some states for using CHIP funds in order to
cover certain people, incorporating pregnant women along with children’s parents that receive
benefits from both Medicaid and CHIP. 7.6 million Children are covered by CHIP amid 2010
federal fiscal policy. There is an approved plan of each and every state. Nonetheless, there was
found rise in the numbers of uninsured children after 1997, specifically those families which
didn’t qualify to CHIP. It was found out by a study that “ 68.7 percent of newly uninsured
children were in families whose incomes were 200 percent of the federal poverty level or higher
as more employers dropped dependents or dropped coverage altogether due to annual premiums
nearly doubling between 2000 and 2006.”

The Beneficiaries
As far as the beneficiaries of this program are concerned, health coverage is provided by the
CHIP to eligible children through both separate and Medicaid CHIP programs. The states
administer CHIP as per federal requirements. The federal government and states join fund this
program.
The benefits of Medicaid Expansion
“Medicaid Expansion CHIP programs” play its role in providing the similar package of
Medicaid benefit to children under Medicaid state plan of each and every state. With the help of
Medicaid Expansion CHIP, states are supposed to provide the benefits of Medicaid to
adolescents and children for periodic and early screening, treatment and diagnostic services as
well as EPSDT benefits.
Options for Separate Benefits of CHIP
States in a separate CHIP can play their role in providing benchmark, benchmark-equivalent or
Secretary-approved coverage. When it comes to Benchmark coverage, it covers health benefits
which are considered to be substantially equal to the coverage of health benefits in following
benefit plans:

Health Benefit Plans for Federal Employees: This Blue Cross preferred provider service is
offered to federal employees.
State Employee Plan. This plan is generally available to or offered to the state’s employees
within state.
“Health Maintenance Organization (HMO)” Plan. Through HMO, this plan is and has been
defined in the Public Health Service Act. It has the largest non-Medicaid enrollment and insured
commercial in the state.
Comprehensiveness of the services provided
When health insurance is provided to children, they are expected to be healthier as compared to
uninsured children for getting medical care. In addition to this, they are expected to bring
improved and effective outcomes which relates to economic and education security that can help
in terms of giving benefits to them in particular and society in general. In recent decades, there
has been a significant social achievement and that is health insurance coverage expansion for
children in US. For this group, the coverage rate in 2015 was 95 percent.

In 2015, private insurance plans covered majority of children (52%) in US were covered While
43% of children from low income families were covered by programs sponsored by the
government. The largest among with was CHIP. For children, Medicaid care is considered to be
a relative bargain. It has been said that “per-child costs are about three quarters of what they are
for non-disabled adults. In fact, children comprise about 40 percent of the Medicaid population,
but account for less than one fifth of all Medicaid expenditures.”
With health insurance, children are accurately covered for their health problems as compared to
those who don’t have such health insurance. For hospitalization, they are at low risk. However,
there is no guarantee given by insurance coverage that timely and appropriate care will be
received by children. While being based on their attitudes and knowledge, many decisions are
made by families with reference to form, where and when to seek formal medical care to their
own children. Access to care can be inhibited by multiple barriers which includes time
constraints, lost wages, out-of-pocket costs, the availability of transportation, the providers’
supply who accept the insurance plan of a child and perceived or actual prejudice/discrimination
(on the basis of ethnicity/race and income)

There is also found an evidence that when children are given proper health service, then it
doesn’t have a positive impact on their health only, it also affects other areas of their life in an
effective manners.

As said by “Medicaid coverage in childhood has been shown to have positive effects on a
number of adolescent health outcomes: decreased reports of mental health problems, reduced
likelihood of eating disorders, reduced BMI, lower likelihood of risky sexual activity, and less
smoking and marijuana and alcohol use.” If we take an example of Black children, it can be said
that Medicaid expansion which they had experienced amid their childhood was completely
linked with less mortality from different causes at 15 to 18 age. Among low-income, unmarried
as well as adolescent girls, those who received health insurance has less chances of becoming
teen parent as compared to those who didn’t receive it.

It has been found by another study that Medicaid coverage was associated with health
improvements in early childhood from 25 to 54 age. Such improved outcomes incorporated low
likelihood of high BP, heart attack/ heart disease, adult diabetes, along with obesity.

Financing Methods
As mentioned above, states and the federal government jointly fund CHIP via a formula which is
based upon the “Medicaid Federal Medical Assistance Percentage (FMAP)”. An “enhanced”
federal matching rate was created by congress for states in order to expand their children health
coverage programs. CHIP is considered to be 15 % higher than the rate of Medicaid that is 71%
nationally. For instance, 65% match rate is possessed by CHIP when a state has no less than 50%
match rate for Medicaid.

Allotments of CHIP Funding

Because of the reason that CHIP is considered to be a capped program, annual CHIP allotment is
provided to each and every state. CMS determines the share of every state each year. Matching
funds need to be provided by states for getting their allotment of federal funding.

Federal CHIP Funding is enhanced by Affordable Care Act

Through 2020, this act extends CHIP while enhancing CHIP federal matching rate, which will be
increased by 23%. For CHIP, it brings federal matching rate to 93%.  This matching rate
continues till September 30, 2021. 

CHIP Expenditure Forms

CHIP can be operated by states as a program that can also be regarded separate from Medicaid,
as Medicaid program’s expansion or the combination of both types of program. CHIP forms 
CMS-21 and CMS-64 are submitted by states to CMS for making sure that federal payments are
appropriate for state expenditures under CHIP and Medicaid are appropriate, also to track those
children who have been served under these programs.

CHIP as Medicaid Expansion

Forms CMS-64 and CMS-37 are used by states which have operated their CHIP as Medicaid
expansion. Administrative costs which are linked with CHIP programs operate as Medicaid
expansion program of a state which can also include form CMS-21 if any states decide to claim
“Federal Financial Participation (FFP)”.

CHIP as Separate Program

CHIP can also be operated by states as a separate program. It uses “Quarterly CHIP Statement of
Expenditures” for submitting their recorded expenditures and federal funds’ disposition of each
and every quarter. Estimated costs are entered by states for CHIP program on form CMS-21B,
while entering data of spending cost on form CMS-21.
Health Services’ Initiatives

There is an option for states to use allotment of CHIP within 10% administrative cap for
developing Health Services ‘Initiatives (state designed) in terms of improving low-income
children’s health.

Problems and Challenges faced by CHIP

Whereas it is important to acknowledge the signal achievements of the ACA in extending health
insurance coverage, reforming practices in the health insurance market, and incentivizing
opportunities to moderate health care costs, it is equally necessary to be alert to aspects of the new
law that raise concerns regarding the future of CHIP.

Enrollment and Retention

In addition to the concerns regarding future funding, the current program has yet to address other
issues of enrollment and retention. There are now estimated to be 7.7 million children enrolled in the
CHIP program, of whom 70% are in stand-alone programs. 3 Despite the remarkable success of
Medicaid and CHIP at reducing uninsurance among children from low-income families, an estimated
7.5 million children in the United States still remain uninsured, of whom 60% to 70% are thought to
be eligible for public insurance of some kind.12 Identifying those children and increasing the rate at
which they enroll in CHIP is an ongoing challenge for the program. For children who do enroll, the
rate of retention in the program is also lower than it might be. It was estimated in 2008 that 26.8% of
uninsured children had been enrolled in public insurance the previous year, with 21.7% formerly
enrolled in Medicaid and 5.1% enrolled in CHIP.40 Understanding the reasons for and consequences
of these dropouts, whether they result from barriers associated with state enrollment and
reenrollment policies, documentation and related concerns among immigrant parents of children
born in the United States, changes in employment status, or other factors, should be a priority for the
program.

Physician Participation
The rates at which pediatricians have been willing to accept children covered by public health
insurance programs have declined in recent years as the payment rates in these programs have
generally deteriorated relative to rates associated with commercial plans. A recent report by the
Government Accountability Office summarizing a national survey of pediatricians indicated that
although 47% of those surveyed reported that they would accept all new Medicaid or CHIP patients,
the comparable figure for privately insured patients was 79%.