How it Works States receive federal matching funds for children s health insurance with great flexibility in how to implement the program. 15 states and the District of Columbia have implemented CHIP by expanding existing Medicaid programs. Separate state plan. 16 states have kept their Medicaid programs the same while either creating new state programs with CHIP funds or expanding already existing, separate, state-run programs. 19 states have changed their Medicaid programs by either expanding income eligibility or eligible age groups and also have created or expanded separate state-run programs.
States have many choices for designing the package of benefits offered to children.
In general, the Medicaid benefit package is the most comprehensive and covers the most services because it was designed to cover the needs of children, including children with chronic conditions and special health care needs. For lower-income families making choices about how to stretch their monthly budgets, the cost of health insurance must compete with housing, utility bills, child care, transportation, food, and other monthly expenses. For these families, even small premiums or co-payments could make CHIP unaffordable. With declining welfare rolls, states failed to ensure that Medicaid coverage continued for children in families no longer receiving welfare. More than 400,000 of these children became uninsured as a result.