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Children's Health Insurance Program

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Last Update: October 24, 2022.


In 1997, a significant milestone was established in health care delivery for children in the United States of America. The United States Congress made a special provision in the Balanced Budget Act of 1997. The Act established the State Children Health Insurance Program (CHIP), which is Title XXI of the Social Security Act.[1]

This legislation was deemed at the time as the single most important investment in children’s health care. The Children Health Insurance Program (CHIP) does not provide universal health coverage for every child, but rather it opened up insurance coverage for a large pool of uninsured children.[1][2] It was seen as the single largest taxpayer-funded expansion of health care insurance coverage for children since President Lyndon Johnson established Medicaid in 1965.

The program by Title XXI of the Social Security Act provides over forty billion dollars available as federal grants to states over ten years.[2] The fund is to provide health insurance coverage, including Medicaid.

To be eligible to get the federal fund, individual states must contribute a specified amount to the fund.

The State Children's Health Insurance Program SCHIP sets forth methodologies and rules on funding for individual states, commonwealths, and territories for each federal fiscal year (FFY) under title XXI of the Social Security Act.

The rule specifies that the process grant application, allotment, and payment by the Federal Government for expenditures under the State Children's Health Insurance Program (SCHIP) and other Medicaid program individual state allotment has as its basis a statutory formula that divides the total available appropriation among all states who have approved child health plans.[3]

The program was established after the comprehensive health care reform proposed by the then president Bill Clinton failed. The late Massachusetts Senator Ted Kennedy and Senator Orin Grant Hatch were co-sponsors of the bill with significant support from Hillary Clinton.

President George Bush vetoed two attempts to expand the program further. He argued that effort at expansion would "steer the program away from its core purpose of providing insurance for poor children and toward covering children from middle-class families."

In Nov 2008, Barak Obama was elected as the 44th President of the United States. In 2009, he signed the Children's Health Insurance Reauthorization Act of 2009 into law. This law provided health care coverage for an additional 4 million children and pregnant women, including ‘lawfully residing immigrant’ pregnant with no waiting period. It received further extensions under provisions within the Patient Protection and Affordable Care Act of 2010.

The provisions of the Patient Protection and Affordable Care Act of 2010 provided:

  • Review the key features of CHIP as it has evolved over 15 years
  • Summarize the effect of CHIP on participants in terms[2]:
  1. Coverage
  2. Access
  3. Disparity
  4. Health status
  5. Identified the challenges still faced in providing coverage for uninsured children
  6. Offer recommendations on ways to expand and strengthen the program to provide health insurance coverage to vulnerable children regardless of the means to pay

As of February 2018, the CHIP has been authorized to continue until 2027.

Issues of Concern

The CHIP was created to provide “child health assistance to uninsured, low-income children effectively and efficiently that is coordinated with other sources of health benefits coverage for children.”

For the State Children Health Insurance Program (SCHIP), low-income children are defined as those whose family income is above the eligibility for Medicaid but below the 200% poverty level, which is approximately $32,000 for a family of four.

The SCHIP fulfills the following functions:


The 24 billion dollars allocated by the federal government demonstrates strong accountability and represents a significant national interest in the provision of health care coverage for uninsured or underinsured children.

Accountability represents a process by which an individual or organization takes ownership of and accepts responsibility for a particular activity or activities and provides information regarding its progress and development with the ultimate goal of meeting requirements and expectations.

New Opportunities

The CHIP opens avenues for

  • New opportunities and innovations in child health management
  • Flexibility in insurance expansion and making existing programs better
  • Increasing access to children’ s health care
  • Development of children-specific performance improvement measures
  • Sustenance

Although the program will provide insurance coverage for uninsured children through federal funding, millions of children will still not have insurance coverage or be underinsured. The future expansion and sustenance of the program and a careful evaluation of how the funds disbursed to the individual States are managed under SCIP are essential.

There are severe issues of concern since the establishment of CHIP. Initially, there was a significant drop in the percentage of uninsured children from 2008 to 2016, a drop of 9.8 % to 4.7 %. However, recent data show an increase of approximately 276000 uninsured children from 2016 to 2017. Only the District of Columbia experienced a decline in the number of uninsured children in 2017.

About three-quarters of children who lost coverage live in states which did not expand their Medicaid coverage for low-income adults.

The rate of uninsured children in states that did not implement an expansion of the Medicaid program almost thrice the cost compared to States with expanded Medicaid programs.

The number of children without health insurance increased nationally from 4.7 percent in 2016 to 5 percent in 2017. Nine states experienced a statistically significant elevation in their rate of uninsured children (SD, UT, TX, GA, SC, FL, OH, TN, MA).

Texas is the state with the highest number of children without health coverage. Close to one in five uninsured children in the U.S. reside in the state of Texas.

States with a higher number of Native Americans and Alaskan natives tend to have a higher number of uninsured children when compared to the national average.

Based on the 2017 Statistical Enrollment Report, about 9.4 million children are enrolled in CHIP.

Clinical Significance

Healthcare access is vital for children and their families, as well as to society in general. The provision of health care has a significant impact on children's physical and emotional health. Affordable health care for children can impact their growth and development, affecting their ability to achieve their full potentials as adults. If there is no provision for appropriate care, children are at an increased risk of developing preventable conditions when they are sick or injured. Failure to receive necessary health care can affect the lives of children and their families.[4]

Nursing, Allied Health, and Interprofessional Team Interventions

The impact of CHIP in enhancing clinical outcomes cannot be overemphasized.  A widely-cited study gives a breakdown of factors that affect mortality and estimates that the lack of access to medical care alone only explains about  10 percent of early mortality in the population as a whole.  Other factors that contribute to mortality are genetics (30 percent), social circumstances (15 percent), environmental exposure (5 percent), and behavioral factors (40 percent).[5][6]

Relative to its effect on overall mortality, medical care may be an important determinant of children’s health. The role of medical care is also dependent on place, time, as well as context. For example, the routine screening of children for lead exposure may be of more value in an environment with older buildings.

Access to medical care for both underinsured or uninsured might also be an important determinant of morbidity and mortality in infectious disease outbreaks.

Review Questions


Implementation principles and strategies for Title XXI (State Children's Health Insurance Program). Academy of Pediatrics. Committee on Child Health Financing. Pediatrics. 1998 May;101(5):944-8. [PubMed: 9565433]
Racine AD, Long TF, Helm ME, Hudak M, Racine AD, Shenkin BN, Snider IG, White PH, Droge M, Harbaugh N., Committee on Child Health Financing. Children's Health Insurance Program (CHIP): accomplishments, challenges, and policy recommendations. Pediatrics. 2014 Mar;133(3):e784-93. [PubMed: 24470647]
State child health; State Children's Health Insurance Program allotments and payments to states. Health Care Financing Administration (HCFA), HHS. Final rule. Fed Regist. 2000 May 24;65(101):33615-33. [PubMed: 11010713]
National Research Council (US) and Institute of Medicine (US) Committee on Children, Health Insurance, and Access to Care. America's Children: Health Insurance and Access to Care. Edmunds M, Coye MJ, editors. National Academies Press (US); Washington (DC): 1998. [PubMed: 25101405]
McGinnis JM, Foege WH. Actual causes of death in the United States. JAMA. 1993 Nov 10;270(18):2207-12. [PubMed: 8411605]
Leininger L, Levy H. Child Health and Access to Medical Care. Future Child. 2015 Spring;25(1):65-90. [PMC free article: PMC4978135] [PubMed: 27516723]
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Bookshelf ID: NBK539903PMID: 30969725


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