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What is the difference between CHIP and Medicaid?

Information You Can Find in Our Guide:

Our free guide will help you understand the steps you have to take and how to obtain the benefits you are looking for.

What is the difference between CHIP and Medicaid?

Millions of low-income Americans across the country receive health insurance from Medicaid and CHIP insurance funded by states and the federal government. CHIP, which is short for the Children’s Health Insurance Program, often joins Medicaid to provide coverage to over a quarter of children and youth with special health care needs in the United States.

Both programs are managed on an individual state level where eligibility requirements, benefit amounts and coverage options are established. However, both programs work in unison to allow Americans to access preventive care and other health care services that can help them maintain their health and avoid expensive medical costs. Medicaid is the single largest source of health care for citizens of the United States. In short, the program aims to provide health care coverage to low-income individuals and families, while CHIP targets low-income children and sometimes extends to pregnant women.

Information You Can Find in Our Guide:

Our free guide will help you understand the steps you have to take and how to obtain the benefits you are looking for.

Overview of CHIP and Medicaid

CHIP is an extension of Medicaid for Children. States are responsible for establishing their CHIP and Medicaid programs, and they can set up their program in one of three ways. CHIP can operate either as a separate program, as an extension of Medicaid or as a combination of both options. Depending on which method a state chooses to implement, there may be some additional differences between the two programs. There are numerous similarities between these programs, but in some cases there are some differences in the eligibility and benefits in each of these health care options.

Information About the Requirements for Each Program

Both Medicaid and CHIP insurance offer numerous benefits to participating individuals. The coverage offered by Medicaid and CHIP provides health insurance to millions of Americans. Financial eligibility is determined using a Modified Adjusted Gross Income (MAGI). In fact, MAGI has been used to calculate financial eligibility since the passing of the Affordable Care Act (ACA). Using a universal measurement has made it easier for applicants to understand the requirements to participate in government-funded health care programs.

Since these programs each have specific goals, the requirements for each differ slightly. Individual states are in charge of implementing and managing these programs for their residents. However, there are federal guidelines that must be followed in order for states to receive funding. Applicants can visit a Medicaid office to inquire about the particular MAGI limits in their area.

Learn About CHIP Requirements

The Children’s Health Insurance Program (CHIP) is intended to provide health care for uninsured children up to age 19, although young adults can also sometimes get coverage through the program. Families with incomes that are too high to qualify for Medicaid may still be eligible for coverage with CHIP. This ensures that children are adequately insured and are capable of getting the health care that they need. States have control over the eligibility limits for CHIP based on the Federal Poverty Level (FPL). They also have the option to provide continuous coverage to children who remain eligible for CHIP. Unfortunately, states receive limited funding for CHIP, and some states have waiting periods for health care coverage.

The minimum requirement to participate in CHIP is that children must live in a household with an income that is within a certain percentage of the Federal Poverty Level (FPL). Naturally, this income limit is extended beyond the income limits of Medicaid coverage. Occasionally, CHIP insurance can even be offered to families with incomes at 300 percent of the FPL. Some states choose to expand their income limit to the maximum of 300 percent, and these states receive federal funding at the Medicaid Matching rate. With access to more funding, states can provide residents with higher-quality health care.

Learn About Medicaid Requirements

States have the authority to set up and administer both Medicaid and CHIP however they see fit, as long as they meet all the established federal guidelines. Since Medicaid is generally meant to cover eligible low-income families who may be having trouble purchasing their own insurance coverage, the eligibility requirements are slightly different than those of CHIP. Eligibility for Medicaid is determined using both financial and non-financial requirements. The passing of the Affordable Care Act (ACA) has recently expanded Medicaid coverage to even more Americans than ever before.

Financially, taxable incomes and tax filing relationships are used to determine eligibility for Medicaid. The finances for a household are measured using the Modified Adjusted Gross Income (MAGI) system. Now, nearly all low-income Americans who are 65 years or younger qualify for Medicaid coverage. The eligibility limits for children has also been extended to a higher percentage of the FPL in each state (not including states that manage CHIP insurance as a Medicaid expansion). Each state was also given the option to extend the eligibility levels for adults. Medicaid has also established mandatory eligibility for certain groups of people. These mandatory eligibility groups usually consist of:

  • Some low-income families.
  • Qualified pregnant women and children.
  • Individual receiving Supplementary Security Income (SSI).

There are also a few non-financial circumstances that would make an individual or family eligible to receive Medicaid. Additionally, certain applicants are exempt from having their income counted toward MAGI limits. Candidates who are living with blindness or a disability, as well as those who are 65 years or older, have the same eligibility requirements as beneficiaries of Supplemental Security Income (SSI).

Note: Any children engaged in an adoption assistance agreement or young adults who are former foster care recipients can be eligible for CHIP and Medicaid at any income level.

Learn About the Benefits of CHIP vs. Medicaid

Together, Medicaid and CHIP Insurance provide health care benefits for millions of Americans across the country, especially children and youth with special health care needs. Similarly to most aspects of CHIP and Medicaid, states have control over the type, amount, duration and scope of covered services that will be provided to residents. However, the federal government has established a list of mandatory coverage that must be provided to beneficiaries. Some of this coverage includes:

  • Inpatient and outpatient services.
  • Physician services.
  • Laboratory services.
  • X-ray services.
  • Home Health services.
  • Well-baby and well-child care such as immunizations (for CHIP insurance).

Additionally, states have the choice to provide a wide range of optional benefits. These benefits include services like physical and occupational therapy for patients. Prescription drugs may also be covered by Medicaid and CHIP in certain states. Typically, states that have additional funds will offer optional benefits as a part of their health care programs.

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