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Medicaid and the Children's Health Insurance Program (CHIP) provide comprehensive and health coverage to millions of people in America—including more than 44 million children in 2011—who would otherwise have been unable to afford health insurance. In 2012, Medicaid and CHIP provided health coverage to more than half of all children at some point during the year.
A child’s eligibility for these programs is primarily based on family income and assets. Each state sets its own eligibility standards within broad federal guidelines. The result is wide variety in coverage from state to state, from a few that meet minimum federal requirements to others that go far beyond to cover more children.
While the recent recession has hit American families hard, Medicaid and CHIP have worked: thanks to several recent legislative victories, the number of uninsured children has dropped even as the rate of uninsurance among adults has grown. Today, 8.9% of children are uninsured, compared to 21.4% of adults.
Established in 1965, Medicaid is a joint federal-state entitlement program that finances health care coverage for certain low-income families, children, pregnant women, and individuals who are aged, blind or disabled. Any state that elects to provide a Medicaid program (and currently all of them do) must cover a number of “mandatory” categories of people, including children under age 6 and pregnant women who are just above the poverty level—at 133 percent of the federal poverty level or “FPL” ($31,321 for a family of four), and children 6-19 who are at or below the FPL ($23,550 for a family of four). In addition, many states cover children above those income levels as “optional” populations. This “categorical” type of eligibility will change dramatically in 2014, when – thanks to the Affordable Care Act – state Medicaid programs must cover all Americans age 19-64 with incomes below 133 percent of FPL.
Medicaid’s comprehensive benefits package, known as Early and Preventive Services Diagnostic and Treatment (EPSDT) was specifically designed to meet the unique developmental needs of children. EPSDT recognizes the importance for children of all ages to get regular and periodic screenings and assessments at various intervals through their lives and all the medically necessary health and mental health care they need without arbitrary limits on scope and duration. When functioning as intended, EPSDT is widely considered to be the best benefit standard for quality age-appropriate child health coverage.
Today, Medicaid is the nation’s single largest health insurer for children, providing health coverage to more than 36 million low income children and children with disabilities. Children constitute more than half of all Medicaid beneficiaries, but represent only 20 percent of Medicaid expenditures. It costs almost twice as much to cover an adult and nearly five times as much to cover an elderly adult in Medicaid as it does a child without disabilities.
Despite the existence of the Medicaid program, millions of children in lower income families remain uninsured due in large part to the high cost of health coverage. Therefore, in 1997, Congress created the Children’s Health Insurance Program (CHIP) to sit on the shoulders of Medicaid for children in families with slightly higher income levels. As with Medicaid, each state was given the flexibility to design its CHIP program within broad federal parameters on income eligibility, benefits, and enrollment procedures. Additionally, they could choose from one of three models: a stand-alone program, a Medicaid expansion, or a combination approach.
In 2009, Congress reauthorized CHIP and expanded the program to cover more uninsured children. This renewal also included some important improvements for children, including eliminating the 5 year waiting period for legal immigrant children eligible for the program and grants for outreach and enrollment activities to help enroll eligible but uninsured children. Subsequently, Congress passed the landmark health reform legislation in 2010, the Patient Protection and Affordable Care Act (the Affordable Care Act), which will maintain CHIP through 2019, with fully funding the program through 2015 – doubling the number of eligible children who can be served from 7 to 14 million.
CHIP benefits for children differ by state, but in general, enrolled children are eligible for a fairly comprehensive set of services, including routine doctor visits, immunizations, dental and vision care, hospitalizations, and laboratory and x-ray services, but not the full set of medically necessary services that children in Medicaid and Medicaid-expansion CHIP programs are entitled to.