Originally created in 1997, the Children’s Health Insurance Program (CHIP) is a state and federal partnership that provides low-cost health insurance coverage for children in families who earn too much income to qualify for Medicaid but cannot afford to purchase private health insurance coverage. States have considerable flexibility to establish income eligibility rules for CHIP, but children enrolling in the program must be otherwise uninsured.

Within federal guidelines, each state determines the design of its individual CHIP program, including eligibility parameters, benefit packages, payment levels for coverage, and administrative procedures. States have flexibility in designing the benefit package for CHIP, but states are required to cover routine check-ups, immunizations, dental, inpatient and outpatient hospital care, and laboratory and x-ray services. Preventive care must be provided at no cost to the family; but premiums and other cost-sharing may be required for other services, within certain limits.

On February 4, 2009, President Obama signed the Children’s Health Insurance Program Reauthorization Act (CHIPRA), which provided funding to renew and expand CHIP coverage. This new legislation preserves health coverage for millions of children who already rely on CHIP, and provides resources for states to offer CHIP coverage to millions more uninsured kids.

CHIP served more than 7.3 million children in fiscal year 2008. The Congressional Budget Office estimates that, by 2013, states will be able to provide coverage to an additional 4 million children who would otherwise be uninsured.

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