With more than 55 million enrollees, Medicaid is larger in size and scope than CHIP. Working together, the two programs are coordinated to provide coverage to all low-income children up to 300% FPL threshold. Although the ACA has established minimum requirements across all health care programs, there are still some key differences in the way the Medicaid for children and CHIP are administered on a state level.
Matching Funds: The federal government matches state spending for both Medicaid and CHIP. To encourage more participation by states, the CHIP match rate is higher than the Medicaid match rate. On average, states receive 57% in matching funds for Medicaid spending, but they receive 70% for CHIP spending. However, under Medicaid, there are no pre-set limits or caps for federal matching funds. Under CHIP, matching funds are capped and states are limited to their specific allotment of funds.
Coverage Requirements: Although states are allowed a certain amount of flexibility in the design of coverage under Medicaid and CHIP, there are far fewer restrictions in the operation of separate CHIP programs. Medicaid has higher minimum comprehensive coverage requirements that include EPSDT services. States can design CHIP coverage around its minimum coverage requirements and choose to include benefits covered under Medicaid.
Cost sharing: Under Medicaid, states are not allowed to impose premiums and cost sharing for mandatory coverage. States that have established a separate CHIP program may impose premiums and cost sharing.