How CHIP and Medicaid Differ: Which Program Might Cover Your Family

The main difference: income limits and who runs the program

CHIP and Medicaid are both state-run health insurance programs for children and families with low income, but they serve different income ranges and operate under different rules. Medicaid covers the lowest-income households — the exact threshold depends on your state and family size. CHIP covers families who earn too much for Medicaid but still cannot afford private insurance. Think of it this way: Medicaid is the first safety net, and CHIP is the second one.

The programs are funded differently too. Medicaid is jointly funded by the federal government and your state. CHIP is also federal and state money, but the federal share is typically higher. This means CHIP programs can sometimes offer more generous benefits or lower out-of-pocket costs than Medicaid in the same state, though that varies widely.

Both programs are administered by your state, not by a single national office. That means the exact benefits, income limits, and enrollment process differ from state to state. A family that qualifies for CHIP in one state might may have access to for Medicaid in another, or might not may have access to for either.

Key Takeaways

• Medicaid covers the lowest-income families; CHIP covers families who earn more than the Medicaid limit but still have low income.
• Income thresholds for both programs vary by state and family size, so you need to check your specific state's rules.
• CHIP often has lower monthly premiums and out-of-pocket costs than Medicaid, though this depends on your state.
• Both programs cover children's doctor visits, hospital care, prescriptions, and dental and vision services, though the exact coverage differs by state.
• You apply through your state's Medicaid or CHIP office, and your state will tell you which program you may have access to for based on your income.

Income limits: where one program ends and the other begins

Every state sets its own Medicaid income limit for children. Some states cover children up to 130% of the federal poverty line; others go as high as 400%. Once your income exceeds your state's Medicaid limit, you move into the CHIP income range. CHIP typically covers families earning between 130% and 400% of the federal poverty line, though some states set their CHIP limit higher or lower.

The federal poverty line changes each year, so the dollar amount that qualifies also changes. For 2024, the federal poverty line for a family of four is around $31,200 per year, but your state's actual Medicaid and CHIP limits will be expressed as a percentage of that. Your state's Medicaid office publishes the exact income limits for your family size — you do not have to calculate it yourself.

Income is counted differently depending on the program and your state. Some states count only the child's income; others count the parent's income too. Some count gross income; others count net income after taxes. When you contact your state office or start an application, they will tell you exactly what counts.

Monthly costs: premiums, copays, and deductibles

Medicaid typically has no monthly premium for children in most states, though some states charge a small amount. CHIP almost always has a monthly premium — usually between $10 and $50 per child per month, depending on your state and income. Some states waive the premium for the lowest-income CHIP families.

When you use the services, both programs charge copays for doctor visits and prescriptions. Medicaid copays are usually lower or zero. CHIP copays are typically higher — often $3 to $10 per visit or prescription. Neither program charges a deductible for children in most states, which means you do not have to pay a large amount before coverage kicks in.

Out-of-pocket costs are capped in both programs, meaning once you spend a certain amount in a year, the program covers everything else. The cap is usually lower in Medicaid than in CHIP. Your state's program website will show you the exact copays and out-of-pocket limits for your state.

What services are covered under each program

Both Medicaid and CHIP cover the core services children need: doctor visits, hospital stays, emergency care, lab tests, X-rays, and prescription medications. Both also cover preventive care like vaccines and well-child checkups at no cost. Mental health services, including therapy and counseling, are covered by both programs.

Dental and vision care are where the programs sometimes differ. Medicaid is required by federal law to cover dental and vision services for children. CHIP programs must cover dental and vision too, but the scope varies by state — some states cover more extensive services than others. Your state's CHIP program information will specify what dental and vision services are included.

Specialty care like speech therapy, occupational therapy, or services for children with developmental delays are covered by both programs, though the process for getting a referral may differ. If your child needs ongoing specialty care, ask your state program whether prior approval is required before scheduling.

How enrollment works in each program

You apply for both Medicaid and CHIP through your state's Medicaid office or health department — there is one application process, not two separate ones. When you submit your application, your state determines which program your family qualifies for based on your income. You do not choose between them; the state assigns you based on the rules.

If your income is below your state's Medicaid limit, you are placed in Medicaid. If your income is above the Medicaid limit but below the CHIP limit, you are placed in CHIP. If your income exceeds both limits, you do not may have access to for either program. Some states have simplified enrollment so that if you are denied for Medicaid, you are automatically considered for CHIP without filling out another form.

Coverage usually begins on the first day of the month after you are approved, though some states backdate coverage to the date you applied. You will receive a card or letter with your member ID and information about how to find doctors and schedule appointments. Your state program will also tell you how to renew your coverage — most programs require annual renewal, though some have extended renewal periods.

Differences in how the programs handle changes in income

Both programs allow you to report changes in income during the year, but they handle those changes differently. If your income increases and you move from Medicaid to CHIP, your coverage typically continues without a gap. If your income increases above both programs' limits, your coverage ends, usually at the end of the month in which you reported the change.

If your income decreases, you can request to move from CHIP to Medicaid at any time. Some states process this quickly; others may take a few weeks. It is worth reporting a decrease in income because Medicaid usually has lower out-of-pocket costs than CHIP.

Both programs allow you to keep coverage for a set period even if your income temporarily exceeds the limit — for example, if you get a one-time bonus or inheritance. This is called a "grace period" or "income disregard," and the length varies by state. Ask your state program whether this applies to your situation.

When to choose CHIP over Medicaid if both are available

In most cases, your state assigns you to one program or the other based on income, so you do not have a choice. However, in a few states, families whose income falls in an overlap range can choose between the two programs. If you have that choice, consider the monthly premium, copays, and out-of-pocket limits in your state — sometimes CHIP is cheaper overall despite the premium, and sometimes Medicaid is.

Also consider which doctors and hospitals accept each program in your area. Some providers accept Medicaid but not CHIP, or vice versa. If your child has a doctor you want to keep, check whether that doctor accepts both programs before deciding.

If your state allows a choice, your state's Medicaid office can show you a side-by-side comparison of costs and benefits for both programs. This takes the guesswork out of the decision.

Frequently Asked Questions

Can my child be on CHIP if I have private insurance?

Yes. CHIP is for families who cannot afford private insurance, but it does not matter whether you have coverage yourself. Your child can be on CHIP even if you have employer insurance. Some states require you to decline employer coverage for your child before enrolling in CHIP; others do not. Your state's program will tell you the rule.

What happens to my child's coverage if I get a job and my income goes up?

Your coverage does not end immediately. Both programs allow a grace period — usually 30 to 90 days — during which your child stays covered even though your income has increased. This gives you time to get employer insurance. After the grace period ends, your child's CHIP or Medicaid coverage stops. Your state program will send you a notice before coverage ends.

Can I switch from Medicaid to CHIP if I want lower copays?

Not usually. Your state assigns you based on income, and you cannot switch programs just because you prefer one. However, if your income decreases, you can request to move from CHIP to Medicaid. If your state allows a choice between programs (which is rare), you can switch during the annual enrollment period.

Do I have to pay back Medicaid or CHIP if my income was higher than I reported?

Medicaid and CHIP are not loans, so you do not have to repay benefits. However, if you knowingly reported false income to get coverage you did not may have access to for, your state may investigate. If you made an honest mistake, report the correct income to your state program, and they will adjust your coverage going forward.

What if my state's Medicaid limit is very low and I do not may have access to for either program?

Some states have low Medicaid limits, which means families fall into a gap where they earn too much for Medicaid but too little for CHIP. If this is your situation, look into whether your state has other programs for uninsured children, or whether your child qualifies for coverage through a parent's employer. You can also contact your state's health department or 211 to learn about other resources.