NCPA - National Center for Policy Analysis

Fewer In Medicaid, More In Children's Health Insurance Program

September 17, 1999

A program to provide health insurance to children in low-income families that don't qualify for Medicaid appears to be working. However, some analysts are concerned that enrollment in Medicaid, the federal-state health program for the poorest families, appears to be declining, and they wonder if the greater financial incentives states get under the new program is to blame.

The Children's Health Insurance Program (CHIP) enacted in 1997 allows states to develop new health insurance programs or expand Medicaid coverage to serve 2.6 million uninsured children in low- income families that earn too much to qualify for traditional Medicaid.

  • In less than two years states have signed up 1.3 million children for CHIP -- half of all the children eligible, according to some estimates.
  • But Medicaid coverage peaked in 1995, at 21.6 million children, with another five million children eligible but not enrolled.
  • And from 1995 through 1997, the enrollment of children in Medicaid dropped 1.4 percent to 21 million, the Urban Institute estimates.

Many CHIP programs are run through Medicaid but the federal government picks up a larger share of the cost for CHIP.

  • States with the highest per capita incomes, for example, generally get a federal match of 50 percent for Medicaid, but a 65 percent match for CHIP.
  • States with the lowest per capita income, such as Mississippi, get a 77 percent match for Medicaid and an 84 percent match for CHIP.

Furthermore, some states aren't applying simple CHIP enrollment procedures to their Medicaid programs. For example, four of the 25 states with separate CHIP programs have mail-in applications for CHIP, but not Medicaid. Seven of those states cover families continuously for 12 months under CHIP, but not Medicaid.

Source: Marilyn Werber Serafini, "Medicaid's Problem with Children," National Journal, September 4, 1999.


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