Medicaid and Children’s Health Insurance Program (CHIP) both play a critical role in ensuring that children of dependent families have sufficient health care coverage. Together, the two programs provide health care coverage to one in three children. Although they are both federal programs largely implemented through the states, with joint financing, the two programs differ in many respects. How Medicaid Works for Children Medicaid was enacted in 1965 as part of the Social Security Act, to provide health coverage to families with dependent children living below the federal poverty line (FPL). Originally, Medicaid required states to provide coverage for children through age 5 up to 133% of FPL and 100% of FPL for school-age children. Medicaid coverage for children was expanded under the Affordable Care Act to cover all children up to 138% of FPL. Medicaid requires states to cover a broad range of services, including check-ups, physician and hospital visits, and vision and dental care. It also requires coverage for Early and Periodic Screening, Diagnosis and Treatment (EPSDT), long-term care, and services provided at Federally Qualified Health Centers (FQHCs). How CHIP Works for Children CHIP was created as part of the Balanced Budget Act of 1997 to build on Medicaid coverage for low-income children. States are able to utilize federal funds for CHIP to expand their Medicaid program or create a standalone program, or a combination of both. The primary goal of CHIP is to expand the reach of government-funded health care coverage to more low-income children. As part of CHIP, the states have simplified the enrollment process, making it easier for children to obtain coverage. Although CHIP covers more children, its coverage options are more limited than Medicaid. CHIP doesn’t offer coverage for EPSDT services. Key Differences Between Medicaid and CHIP With more than 55 million enrollees, Medicaid is larger in size and scope than CHIP. Working together, the two programs are coordinated to provide coverage to all low-income children up to 300% FPL threshold. Although the ACA has established minimum requirements across all health care programs, there are still some key differences in the way the Medicaid for children and CHIP are administered on a state level. Matching Funds: The federal government matches state spending for both Medicaid and CHIP. To encourage more participation by states, the CHIP match rate is higher than the Medicaid match rate. On average, states receive 57% in matching funds for Medicaid spending, but they receive 70% for CHIP spending. However, under Medicaid, there are no pre-set limits or caps for federal matching funds. Under CHIP, matching funds are capped and states are limited to their specific allotment of funds. Coverage Requirements: Although states are allowed a certain amount of flexibility in the design of coverage under Medicaid and CHIP, there are far fewer restrictions in the operation of separate CHIP programs. Medicaid has higher minimum comprehensive coverage requirements that include EPSDT services. States can design CHIP coverage around its minimum coverage requirements and choose to include benefits covered under Medicaid. Cost sharing: Under Medicaid, states are not allowed to impose premiums and cost sharing for mandatory coverage. States that have established a separate CHIP program may impose premiums and cost sharing. Under the ACA, efforts are being made to better coordinate Medicaid and CHIP in both their coverage options and their administration by the states. The ACA seeks to create a continuum of coverage from the cradle to the grave with the goal of reducing the number of uninsured individuals. Efforts are underway to provide a more streamlined and coordinated enrollment process for the states, using the two programs as a way to increase enrollment, especially among children.