What Is CHIP? Children's Health Insurance Program

Millions of American children are covered by a program that many parents don't fully understand: the Children's Health Insurance Program, or CHIP. Created in 1997, CHIP fills a critical gap — providing coverage for children whose families earn above the Medicaid threshold but still can't afford private health insurance. Here's what CHIP is, who it covers, and what to do when coverage is denied.

What Is CHIP?

The Children's Health Insurance Program is a federal-state partnership that provides health coverage to children in families with incomes too high for Medicaid but too low for private insurance. Like Medicaid, CHIP is jointly funded by the federal government and each state, and each state administers its own program within federal guidelines.

CHIP covers children up to age 19. In many states, CHIP also covers pregnant women. Some states have extended coverage to parents and caretaker relatives through waivers.

The program is known by different names in different states: Healthy Kids (Florida), Peach Care (Georgia), HAWK-I (Iowa), and others. But they all operate under the CHIP framework.

CHIP Eligibility: The Income Window

CHIP is designed for families who fall between Medicaid eligibility and affordable private coverage. Income eligibility varies significantly by state, but most states cover children with family incomes between 133% and 200% of the Federal Poverty Level (FPL), with many states going much higher.

Examples of upper income limits (2025 estimates):

• Texas: 201% FPL
• California: 266% FPL
• New York: 400% FPL
• New Jersey: 355% FPL

Some states have higher limits specifically for newborns and young children. A family of four in New York with an income of $90,000 may still qualify for CHIP — something many middle-income families don't realize.

Children who qualify for Medicaid are enrolled in Medicaid, not CHIP, even if they apply through CHIP channels. The two programs are administered together in most states, and families generally don't need to know which program they're applying to.

How CHIP Is Structured in Different States

States have two options for structuring CHIP:

1. Medicaid expansion CHIP: The state expands Medicaid eligibility to cover CHIP-eligible children. These children receive the same benefits and protections as Medicaid beneficiaries.

2. Separate CHIP program: The state runs a standalone CHIP program, distinct from Medicaid. Benefits may differ from Medicaid, and different rules may apply.

Some states use a combination approach. Knowing which type your state uses matters when understanding your appeal rights.

What CHIP Covers

Federal law requires CHIP to provide "benchmark" coverage, comparable to the Federal Employees Health Benefits Plan, Blue Cross Blue Shield Standard Plan, or the state's largest commercial HMO. In practice, most CHIP programs cover:

• Routine well-child visits and immunizations
• Doctor and specialist visits
• Inpatient and outpatient hospital care
• Emergency care
• Prescriptions
• Dental care
• Vision care
• Mental health and substance use services
• Laboratory and X-ray services
• Durable medical equipment

CHIP generally provides more comprehensive coverage than most private plans, particularly for dental and vision — which are often excluded or limited in adult commercial plans.

Premium and Cost-Sharing

For families at the lowest income levels, CHIP is free. For higher-income CHIP families, there may be modest premiums (capped at 5% of family income annually), small copays, and deductibles. The exact amounts vary by state.

Federal law prohibits cost-sharing for preventive and well-child services, emergency care, and for families below 100% FPL.

Common CHIP Denial Reasons

1. Income exceeds state threshold. The most frequent eligibility denial. Income limits vary by state; verify your state's limit on your state's Medicaid/CHIP website.

2. Child's age. CHIP covers children through age 18 (in some states, up to the end of the calendar year they turn 19, or 19th birthday). An older teenager may age out and need individual coverage.

3. Access to employer-sponsored coverage. Many states have a waiting period or limit CHIP to children without access to affordable employer coverage. The definition of "affordable" varies.

4. Immigration status. CHIP generally covers children who are US citizens or certain lawfully residing immigrants. Undocumented children are not eligible for federally funded CHIP, though some states use state funds to cover them.

5. Service not covered. Like any insurance program, CHIP has defined benefits. A service outside the covered benefit package will be denied regardless of medical need.

6. Prior Authorization Denied: How to Appeal" class="auto-link">Prior authorization not obtained. CHIP managed care plans often require prior authorization for specialty care, imaging, surgeries, and certain medications.

Your Right to a CHIP Fair Hearing

If CHIP denies or terminates your child's coverage, or denies a claim for a covered service, you have the right to appeal. The appeal process varies by state structure:

For Medicaid expansion CHIP: You have full Medicaid fair hearing rights — request a hearing before a state hearing officer, typically within 90 days of the denial.

For separate CHIP programs: Federal law requires an appeals process, but the specifics vary more by state. Most require an internal appeal to the managed care plan first, followed by a state appeal.

Continuing benefits during appeal: In Medicaid expansion CHIP programs, you may have the right to continue receiving benefits during your appeal ("aid paid pending"). Check your state's rules.

How to Appeal a CHIP Denial

Step 1: Read the denial notice. The specific reason and your appeal rights must be stated.

Step 2: Gather supporting documentation — income verification, birth certificate, residency proof, or clinical records depending on the denial type.

Step 3: File an appeal with the CHIP or managed care plan within the stated deadline. For medical service denials, include a letter of medical necessity from your child's physician.

Step 4: If the plan upholds the denial, escalate to a state fair hearing.

Step 5: Contact your state's Medicaid/CHIP office or a legal aid organization if you need help with the process. Many states have CHIP navigators or enrollment assistors who can help.

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Related Reading:

• How to Write an Insurance Appeal Letter
• What Is Medical Necessity?
• Internal vs External Insurance Appeal