From one state to the next, children’s health insurance costs can vary greatly. The federal Children’s Health Insurance Program (CHIP) offers free or low-cost health coverage to low-income families. Many individuals do not meet income limits to qualify for Medicaid. As such, the CHIP program is an additional source of assistance for families with children under 19 years of age.
With CHIP, there are two costs that states may require participants to: children’s health insurance premiums and copayments. Some states may not have premiums while others have cost-sharing prices for both. In some states, there are no costs at all. As such, it is important that applicants understand the program eligibility requirements for their state prior to applying for the program. For an in-depth look at what the costs are for this program in various states, review the sections below.
Defining CHIP Cost Sharing Structure
Once you decide that CHIP is the right program for you, it is important to understand the CHIP cost sharing price structures in your state. In government-sponsored and private health insurance coverage plans, families will generally have to pay a percentage of the cost of the medical services they receive. The following are some of the costs you may have to pay if you participate in CHIP:
- Cost sharing: The percentage of costs that the beneficiary pays including copayments, premiums and in some cases, deductibles.
- Copayments: This reflects a fixed price that someone in a health coverage plan will pay after the deductible is paid. Not every service requires a copay. In some states, basic services, such as immunizations, are free, while doctor visits may have small copayments. Copayments often vary in price for prescription medications. For instance, a generic medication will likely have a lower copayment than one for a brand name medication.
- Premiums: In some states, CHIP recipients must pay health insurance premiums every month, quarter or year to receive continuous access to medical services. In some states, it may be as low as $15 while it may go up to several hundred dollars in others.
It is important to note that while copayments and premiums can range in price, they cannot be over 5 percent of the family’s household income.
By law, CHIP recipients must have cost-sharing prices that are below a certain amount to ensure they are affordable. As such, copayments are generally no more than $50 in most states for regular office visits and higher for special services, such as inpatient hospital care.
Download our comprehensive guide for detailed information about CHIP in your state.
How much does CHIP cost?
The children’s health insurance program serves low-income families and provides a series of health coverage benefits. CHIP is federally funded but operates at the state level. States can choose to operate their programs in one of three ways:
- As a Medicaid expansion program
- As a separate CHIP program
- As a combination of both
This means that every state sets their own regulations on CHIP application processes, coverage benefits and other aspects of the program. This is also true when it comes to costs. CHIP recipients have access to many services, including routine check-ups, access to mental health services and immunizations.
Some states offer more services than others, depending on what their residents may need. Some of these services are free, while there are some that incur some level of cost-sharing. The following states do not charge CHIP beneficiaries anything to participate in the program including:
- South Dakota
There are also some states that divide their CHIP program in subcategories based on income. As such, one category may have lower cost-sharing requirements than another. In Alabama, for example, annual premiums are divided into several groups. For the low-fee group, the premium is $52, whereas participants qualifying for the regular fee group pay $104 per year. Family size and income play a big role in what a family can pay for copayments and premiums. Some states have a wide range of payment options depending on the family’s federal poverty level (FPL).
It is also important to note that not all medical services incur copayments in states, even in states where recipients are required to pay CHIP copayments. For example, CHIP beneficiaries in Florida may pay small copayments up to $10 for chiropractor visits, rehabilitative services and prescription drugs. In states like Idaho, copayments are only up to $4 for services like occupational therapy and primary care doctor visits.
There are also certain populations that are exempt from copayments and CHIP premiums. For instance, CHIP recipients in Louisiana who are members of a federally-recognized Native American tribe or recognized Alaskan natives do not have to pay monthly premiums.
Copayments are often necessary for prescription medications, emergency visits, inpatient hospital care and visits to specialists. In Georgia, foster children and those who are younger than six years of age are also exempt from premium payments and copayments. With this in mind, it is important to know what the required contributions are in every state before applying for the program.
For a comprehensive look at how each state in the U.S. operates for CHIP coverage, download our informative guide.
Are there consequences for not paying health insurance premiums?
Not every state with CHIP coverage has cost-sharing requirements. Some states provide health insurance to low-income communities at no cost. However, those that do have cost-sharing requirements vary in their regulations regarding late payments for health insurance premiums.
Georgia CHIP, for instance, continues to provide health insurance coverage for up to two months after a beneficiary defaults on his or her on premium payment. Indiana has the same regulations.
However, beneficiaries in Louisiana only have 10 days to make a payment after its due date. Failing to do so can result in a termination of benefits. Moreover, recipients may also be required to pay penalty fees. Utah’s program charges a $15 fee for late premium payments. If the local CHIP office does not receive the payment after a certain period of time, it will remove the family from the coverage plan.
It is important to note that while some states allow beneficiaries to reinstate their coverage, they will generally have to pay the past-due costs.