Medicaid and CHIP

Medicaid is the primary public health insurance program for low-income individuals and families in the United States. It is jointly funded by the federal government and individual states, and each state administers its own program within federal guidelines. The Children’s Health Insurance Program (CHIP) is a related program that covers children in families who earn too much to qualify for Medicaid but cannot afford private insurance. Together, these programs cover a large share of the US population, including many immigrants, pregnant women, children with disabilities, elderly adults, and low-income working families.

How Medicaid is administered

Unlike Medicare, which is a uniform federal program, Medicaid looks different from state to state. Federal law sets minimum requirements — the populations that states must cover, the services that must be included — but states have broad discretion to expand coverage, add benefits, and design delivery systems.

States can also choose to expand Medicaid to cover all adults below a defined income threshold, as permitted by the ACA. Most states have done so; others have not. In states that expanded Medicaid, many low-income adults who would not otherwise qualify have coverage available. In non-expansion states, eligibility for non-disabled adults without children may be extremely limited or nonexistent.

Delivery models also vary: some states use traditional fee-for-service Medicaid, where the state pays providers directly; many states contract with private managed care organizations (MCOs) that coordinate care for enrolled members.

Who qualifies for Medicaid

Federal law requires states to cover certain mandatory groups, including low-income children, pregnant women, parents and caretaker relatives in families below a threshold, individuals receiving Supplemental Security Income (SSI), and people who are aged or have disabilities. Beyond these groups, states may choose to extend coverage to other populations.

For most working-age adults without disabilities, eligibility is income-based and determined using a methodology called Modified Adjusted Gross Income (MAGI). Income limits are expressed as a percentage of the federal poverty level (FPL) and are updated annually by the federal government.

Immigration status is also a factor. Qualified non-citizens (including lawful permanent residents) are generally subject to a waiting period before becoming eligible for federal Medicaid, with exceptions for emergency Medicaid and certain categories such as refugees, asylees, and trafficking victims. Undocumented individuals are generally limited to emergency Medicaid. Some states use state-only funds to provide broader coverage to certain immigrant groups — rules vary significantly by state.

The Children’s Health Insurance Program (CHIP)

CHIP was created to cover children whose families earn too much to qualify for Medicaid but cannot afford private insurance. It fills the gap between Medicaid and private market coverage for children. Income thresholds for CHIP are higher than for Medicaid and are set separately by each state, within federal parameters.

In many states, CHIP is administered as an extension of Medicaid. In others, it operates as a distinct program with different cost-sharing or benefit structures. Many states also use CHIP funds to cover pregnant women who do not qualify for Medicaid pregnancy coverage.

Children enrolled in CHIP receive comprehensive coverage including physician visits, preventive care, dental, vision, and mental health services. Cost-sharing is generally limited and may be waived for very low-income families.

Applying for Medicaid or CHIP

You can apply for Medicaid or CHIP at any time of year — there is no open enrollment period for these programs. Applications can be submitted through your state’s Medicaid agency, through a state Marketplace website, or through healthcare.gov (which screens for both Marketplace and Medicaid eligibility simultaneously).

When you apply, you will need to provide information about household size, income, residency, and immigration or citizenship status. States must determine eligibility within a defined timeframe and must notify applicants in writing of the decision, including appeal rights.

Coverage can sometimes be retroactive. Depending on state rules, Medicaid may cover medical costs incurred before the application date — sometimes going back to the beginning of the month of application or even earlier months. This is called retroactive eligibility and can be important for people who received emergency or hospital care before applying.

Spend-down programs

In some states, individuals whose income exceeds the Medicaid limit may still qualify through a spend-down process. This works similarly to a deductible: you must incur and report medical expenses that reduce your countable income to the Medicaid eligibility level. Once you have spent down to that level, the state pays for remaining covered medical costs for the rest of the benefit period.

Not all states offer spend-down programs. Those that do have different rules about the benefit period and which expenses count toward the spend-down. Contact your state Medicaid agency for information about whether spend-down is available and how it works in your state.