Figure 1 : State Initiatives to Expand Health Insurance for Children

provides $24 billion in federal funds over the next five years for children’s health.1 The State Children’s Health Insurance Program (CHIP) accounts for over $20 billion of these funds. Established as Title XXI of the Social Security Act, this program entitles states to grants to help create and expand insurance programs for low-income children. Funds are allocated to each state based on its share of the nation’s uninsured children with family incomes below 200 percent of the federal poverty level, with adjustments for differences in health care costs across states. States must supply matching funds, but the required matching rates are lower than Medicaid matching rates. States choosing to participate in CHIP may expand Medicaid, create or expand a nonMedicaid program, or use a combination of both approaches. While CHIP rules specify that states may only cover uninsured children in families with incomes up to 200 percent of poverty, there are important exceptions. In states that had expanded Medicaid eligibility for children beyond 150 percent of poverty prior to CHIP, CHIP eligibility limits can be raised up to 50 percentage points above their existing Medicaid eligibility thresholds.2 States will receive the enhanced matching rate only for children above these existing eligibility thresholds. In addition, the Health Care Financing Administration (HCFA) will allow states to disregard income under the rules outlined in Section 1902(r)(2) of the Social Security Act. The 1902(r)(2) provision essentially allows states to cover uninsured children at any income level under CHIP. This brief first examines the variation in states’ provision of health insurance coverage to children under both the Medicaid program and separate state initiatives prior to CHIP. The brief then summarizes states’ CHIP plans, including those submitted to HCFA for approval and those proposed by governors, legislatures, or committees but still under consideration at the state level. We find that variety is, was, and will continue to be a dominant feature of children’s health insurance programs. Children’s Health Insurance Programs: Where States Are, Where They Are Headed THE URBAN INSTITUTE