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Definition of SCHIP

SCHIP is an acronym for the State Children's Health Insurance Program, first created in 1997. After passage of the 2009 Children's Healthcare Reform Reauthorization Act, CHIPRA, the program name changed to the Children's Health Insurance Program (CHIP). CHIP includes federal subsidies to the states to provide health insurance for children with low-income parents. Features of CHIP include flexible plan implementation, matching of state healthcare costs, the ability to cancel the plan in a state, care for legal resident children and treatment for American Indian tribe members.

  1. Matching Funds

    • CHIP includes subsidies to state programs. The California program called Healthy Families is a CHIP organization. Healthy Families includes state matching of health care costs, as each state pays for 35 percent of children's health insurance bills and the federal government pays for 65 percent of the bills, according to the State of California. Ohio also offers a children's health insurance program as a member of CHIP.

    State Options

    • States have flexibility in implementing CHIP plans. According to the State of Ohio, states have three options. They may elect to raise the income cap for residents eligible for Medicare subsidies, they can create a separate state program or they can create a mixed program with Medicare and state elements. A percentage of family income compared to the federal poverty level determines income threshold for eligibility. The federal poverty level determines eligibility as it is lower than the state poverty level in states with a higher cost of living.

    CHIP Cancellation

    • States may cancel their CHIP plan. The State of Arizona shut down its CHIP program, KidsCare, to deal with its budget deficit. Canceling the CHIP program means that the State of Arizona no longer receives matching funds from the federal government, so the cut to children's health insurance coverage is larger than the amount of money saved in the state budget. Since CHIP covers preventive care, canceling the program increases the likelihood of children receiving treatment for medical emergencies at hospitals. This increases the costs to the Arizona government and to Arizona hospitals as federal regulations prohibit hospitals from turning away patients..

    CHIP Expansion

    • Passage of the Children's Health Insurance Program Reauthorization Act of 2009 (CHIPRA) authorized program expansion. This reauthorization includes several features. The CHIP program now applies to pregnant women, providing them with prenatal treatment, and to legal immigrants. Additionally, legal resident children who have not been long-term residents of the United States also get subsidized health care treatment with CHIPRA.

    American Indian Benefits

    • CHIP includes features that apply to American Indians, providing subsidized health care to children in federally recognized tribes, including tribes with membership across borders in Mexico and Canada. The program allows American Indian tribal members to use documents provided by tribal authorities to establish eligibility for children's health care. Since each state establishes its own CHIP program, the American Indian tribal members receive treatment from the states that contain their tribe's territory.

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