Medicaid vs CHIP: Understanding the Differences in Detail

Jul 20, 2022 By Susan Kelly

Medicaid vs. CHIP: Understanding the Differences? Medicaid is broader in size and breadth than CHIP, with over 76 million enrollees compared to 6 million in CHIP. All low-income kids up to 300 percent of the FPL criteria are covered by the two programmes when they work together. The administration of CHIP and Medicaid for children on a state-by-state basis still differs significantly from Medicaid for children, even though the ACA has mandated basic standards for all healthcare programmes.

Describe Medicaid

To offer health insurance to households with dependent kids living under the federal poverty level, Medicaid was introduced as a component of the SSA in 1965. (FPL). Medicaid's original requirements stated that states have to cover up to age 5 down to 133 percent of FPL and kids in school up to 100 percent of FPL. Under the ACA, all children are eligible for Medicaid coverage up to 138 percent of FPL.

Medicaid mandates that states provide various benefits, such as checkups, doctor and hospital visits, and vision and dental treatment. Additionally, it requires that services delivered at FQH Centers, long-term care, and EPSDT be covered (FQHCs).

Children's Medicaid Eligibility

Medicaid is available to kids whose families annually make 133 percent or lower of the main poverty level. Before the ACA was passed in 2010, child qualification was also an age profile; the older a kid was, the less probable they would qualify. The ACA established standard income eligibility for children between 6 and 19.

Describe CHIP

The BBA of 1997 included CHIP to expand low-income children's access to Medicaid coverage. States can use CHIP funding from the federal government to expand Medicaid, start a new programme, or do both at once. The main objective of CHIP is to increase the number of low-income children who have access to government-funded health care. The states have streamlined the CHIP enrollment procedure to make it simpler for kids to enrol in coverage.

Compared to Medicaid, CHIP offers fewer options for coverage, even if it covers more children. EPSDT services are not covered by CHIP. Children who are not eligible for Medicaid but who would otherwise be unable to obtain insurance through family insurance are covered by CHIP. With the help of this initiative, more kids are now qualified for health insurance. Though it offers vastly different levels of insurance than Medicaid, CHIP is not subject to the same laws.

Eligibility For Children Under Chip

The final determination of chip eligibility is made at the state level, but several states set the minimum for children at 200 percent or greater of federal poverty. CHIP can assist pregnant mothers in a variety of situations. Medicaid covers fewer children than CHIP, but CHIP also has fewer options for coverage.

Important Distinctions Between Chip and Medicaid

Adding Money

For both Medicaid and CHIP, the central government matches state spending. The CHIP matching rate is greater than the Medicaid matching rate to promote greater state participation. For Medicaid spending, states typically get 56 percent in matching payments, but for CHIP spending, they get 71 percent. However, there are no ceilings or predetermined thresholds for federal matching money under Medicaid. State allotments of funding are constrained under CHIP, and matching payments are capped.

Requirements for Coverage

Although Medicaid and CHIP provide some freedom in creating coverage, the administration of standalone CHIP programmes is subject to significantly fewer limitations. Medicaid has stricter minimum requirements for comprehensive coverage, which also apply to EPSDT treatments. States may decide to incorporate Medicaid-covered benefits into CHIP coverage while still adhering to the federal program's minimal coverage standards.

Shared Costs

States are prohibited from imposing charges and cost-sharing for required care under Medicaid. States with distinct CHIP programmes can charge premiums and require cost-sharing. In accordance with the ACA, attempts are being undertaken to integrate better Medicaid and CHIP coverage options and state-level administration. To lower the number of uninsured people, the ACA aims to establish a continuity of coverage from birth to death. The two initiatives are being used to boost participation, particularly among youngsters, and efforts are being made to offer the states a more standardized and unified enrollment process.


Children from low-income homes should have access to high-quality healthcare like their peers from higher-income families. While CHIP provides coverage to more kids, Medicaid delivers treatment to the poorest households. Although Medicaid may give more comprehensive care, the CHIP programme offers a vast range. Making the great majority of the child's healthcare requires that you know the distinctions between these two programmes.

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