CHIPRA Mandated Evaluation of the Children's Health Insurance Program: Final Findings. II. Program Design



  • Despite the recent recession, which persisted during much of the study period, many states expanded children’s coverage, by either raising upper income eligibility limits, covering legally residing immigrant children and pregnant women—groups newly eligible because of CHIPRA—or covering dependents of state employees as permitted by the Affordable Care Act.
  • Simplifying rules and procedures for both enrollment and renewal continued to be a major priority for CHIP programs and CHIPRA played a direct role in spurring innovation. Similarly, CHIPRA’s outreach grants played an important role in supporting and supplementing state outreach efforts.
  • Important legacies of CHIPRA are the law’s mandatory requirements for comprehensive dental benefits coverage and mental health parity for all CHIP programs; while most states already offered generous coverage of these benefits, the mandate may have protected them from cuts during the economic downturn.
  • Federal Maintenance of Effort (MOE) rules, which prohibit states from cutting eligibility and enrollment policies for Medicaid and CHIP to levels more restrictive than those in place in March 2010, were viewed by some CHIP administrators as crucial protection for CHIP, especially given how the recent recession weakened state economies and pressured policymakers to look for places where they could cut state budgets.

This chapter draws findings about CHIP from two key data sources: (1) case studies in the 10 study states, conducted between February and September 2012; and (2) a national survey of CHIP state program administrators, conducted between January and April 2013. 20 Through both efforts, evaluators documented perceptions from state officials and other key informants about whether and how CHIP programs had changed in response to CHIPRA. The case studies included consumer focus groups that allowed parents to describe how well CHIP was meeting the needs of their children.

States have taken advantage of flexibility embedded in the CHIP statutes to design CHIP programs that emulate private insurance coverage.

From the outset, a fundamental feature of CHIP was the flexibility granted to states with regard to program design, and many states used that flexibility to create separate CHIP programs that were designed to feel more like private insurance to consumers. As early as 2001, 35 states operated separate CHIP programs—either alone or in combination with (typically smaller) Medicaid expansions—with attractive names (like Healthy Families in California and Child Health Plus in New York). These programs typically included cost sharing arrangements similar to (though typically lower than) private plans and service-delivery networks built around mainstream managed care plans. At its peak, the number of states with separate CHIP programs reached 43, but recently, at least partly in response to anticipated changes under the Affordable Care Act, six states have eliminated their separate CHIP programs. As of January 2014, 37 states operated a separate CHIP (either alone or in combination with a Medicaid expansion CHIP) and 13 states and the District of Columbia operated only a Medicaid expansion CHIP (Centers for Medicaid and CHIP Services 2013b).

States continued to extend broad coverage to children in working poor families through CHIP, while also simplifying both enrollment and renewal policies and procedures.

Since its inception, CHIP has been a fertile testing ground for state innovations related to eligibility policy and the simplification of enrollment and renewal procedures. The federal financial stability and administrative flexibility that CHIPRA provided, among other factors, led many states to further expand eligibility for children in working poor families and to adopt additional simplification strategies to facilitate enrollment and renewal.

  • CHIPRA allowed states to cover children in families with incomes above 250 percent of the federal poverty level; as of January 2014, 19 states had done so (Centers for Medicaid and CHIP Services 2013).
  • In addition, 24 states expanded CHIP coverage to legally residing immigrant children or pregnant women, as permitted by CHIPRA, while an additional three states used rules permitted by CHIPRA Section 111 to expand coverage for pregnant women.
  • Sixteen states extended CHIP coverage to children of state employees; half of these states completed this expansion because of an option in the Affordable Care Act to cover these children (the other eight states had previously covered these children in other ways, such as through a Section 1115 waiver).

Maintenance of effort (MOE) rules established by the American Recovery and Reinvestment Act of 2009 (and extended and broadened by the Affordable Care Act) protected these and other gains by prohibiting states from cutting eligibility and enrollment policies for Medicaid and CHIP to levels more restrictive than those in place in March 2010. In the survey of state CHIP administrators, officials from 30 states (of 46 responding to the question) reported that these rules were important in safeguarding CHIP and Medicaid from cuts in recent years, especially as state budgets came under pressure during the recent recession.

CHIPRA performance bonuses played a direct role in spurring states’ continued interest in pursuing enrollment and renewal simplification strategies.

States that adopted at least five of eight approved simplification strategies (listed in Table II.1) and that met Medicaid enrollment growth targets qualified for performance bonuses that were quite substantial: over $1 billion has been awarded to states between 2009 and 2013 ( 2013). Administrators from 29 states interviewed as part of the survey of state program administrators—including states that did not receive a bonus—thought the CHIPRA performance bonuses were an effective incentive to adopt simplifications. Seven of the 10 case study states (Alabama, Louisiana, Michigan, New York, Ohio, Virginia, and Utah) qualified for CHIPRA performance bonuses between fiscal years 2009 and 2013, totaling over $243 million. As shown in Table II.1, some other case study states, such as California, have been leaders in simplifying enrollment and renewal, but did not achieve enrollment targets needed to qualify for the bonus.

Table II.1. CHIPRA Performance Bonus Simplification Strategies, by State, as of 2012

State 12-Month Continuous Eligibility No Asset Test No In- Person Interview Same Application and Renewal Forms in Medicaid and CHIP Administrative or Ex Parte Renewal Presumptive Eligibility Express Lane Eligibility Premium Assistance
Alabama X X X X X   Medicaid  
California X X X X   X    
Florida CHIP X X X X     CHIP
Louisiana X X X X X   Medicaid  
Michigan X X X X   X    
New York X X X X   X X  
Ohio X X X X   X    
Texas CHIP   X X        
Virginia CHIP X X X X     CHIP

Source: Case study reports prepared by the Urban Institute and Mathematica Policy Research for the CHIPRA-mandated evaluation of CHIP, 2012.

Notes: X denotes implementation in both Medicaid and CHIP. To qualify for a performance bonus, states had to implement at least five of these eight policies and increase children’s enrollment in Medicaid above a baseline established for each fiscal year. Administrative or ex parte renewal means states can access government or commercial databases to verify family income electronically to allow renewal in CHIP or Medicaid without any paperwork required from families.

The case studies identified numerous creative, multipronged strategies to streamline enrollment and renewal procedures and achieve high rates of participation among eligible children (Table II.2). All but one of the case study states offered online applications for their CHIP programs and most of the study states had designed more-integrated data systems—some capable of linking across public benefits programs and others with the ability to verify applicants’ income, employment, health insurance status, and citizenship.

  • Four of the case study states (Alabama, Louisiana, New York, and Utah) added Express Lane Eligibility (ELE) to their toolbox of simplification strategies, a new option permitted by CHIPRA that allows states to use the findings of other need-based programs to establish or renew eligibility for children in Medicaid and CHIP (see Hoag et al. 2013a for final findings from the evaluation of ELE).21
  • A majority of study states also used a range of community-based application-assistance models that bolstered traditional outreach by enabling staff of local agencies, providers, and health plans to provide application assistance to families with uninsured children. Key informants described these staff assistors, who often reflected the ethnicities of the communities in which they worked, as “trusted” and “culturally competent” and, therefore, particularly successful in helping “hard-to-reach” populations to access coverage. Families participating in the study’s focus groups widely praised the ease with which they were able to apply for and obtain health coverage for their children, and particularly noted how valuable the help of application assistors was in enrolling.

States also focused considerable attention on simplifying renewal processes, recognizing that high retention rates are crucial to reducing churn and maintaining gains in reducing the ranks of uninsured children.22 Generally, states applied many of the same types of strategies to renewal that they did to initial enrollment. In the study’s focus groups, parents described how easy most CHIP renewal processes were for them.

Table II.2. CHIP Enrollment and Renewal Strategies, by State, 2012

State Mail-In Enrollment and Renewal Online Enrollment and Renewal Community- Based Application Assistance Active or Administrative Renewal Preprinted Renewal Form Self-Declaration of Income
Alabama X X X Active X X
California X X X Active X  
Florida X X   Active X X
Louisiana X X X Administrative   X
Michigan X X X Active   X
New York X   X Active   X
Ohio X X X Active    
Texas X X X Active X X
Utah X X   Active X  
Virginia Enrollment Only X X Active X X

Source: Case study reports prepared by the Urban Institute and Mathematica Policy Research for the CHIPRA-mandated evaluation of CHIP, 2012.

Note: Active renewal means enrollees have to take steps to renew their coverage. Administrative renewal means families may maintain their coverage without providing another form or more income documentation as long as no family member’s income has changed.

Administrators’ concerns about substitution of CHIP for private group coverage have diminished over time.

During the initial development of CHIP, policymakers worried that the new coverage program would encourage families to substitute government-sponsored health insurance for existing employer-sponsored coverage for their children. Many were also concerned that employers might stop offering dependent health coverage if their employees’ children became eligible for CHIP. In response to these concerns, the original CHIP legislation mandated that all states have “reasonable procedures” in place to protect against these types of substitution. Most states devised a range of strategies to prevent or discourage substitution, but primarily relied on waiting periods during which children must be uninsured before they can enroll in CHIP.

Officials interviewed in the 10 case study states reported that substitution of CHIP for private coverage was not a major concern; state officials generally expressed the belief that provisions to prevent substitution had effectively deterred families from dropping private coverage.23 This perception by state administrators echoed that of the first CHIP evaluation (Hill et al. 2003). When the case studies were conducted in 2012, 9 of the 10 study states imposed waiting periods (ranging from 3 to 12 months) and maintained a range of other provisions designed to discourage substitution of public for private coverage. Affordable Care Act regulations stipulate that states with separate CHIP programs cannot impose waiting periods longer than 3 months starting in 2014; this rule led numerous states to change their waiting period policies after the case studies were completed All of the case study states with separate CHIP programs have now done so, with Virginia eliminating its waiting period as of July 1, 2014.

  • During the study period, only Louisiana and New York increased the length of waiting periods under CHIP—and did so only when they significantly expanded eligibility to higher-income families (those with incomes up to 250 percent of the FPL in Louisiana and 400 percent of the FPL in New York).
  • More often, states relaxed their anti-substitution provisions by either decreasing the length of a waiting period (as in Florida) or adding more exceptions to the waiting period for families in need of coverage for their children (as in New York, which permits an exception to the waiting period for children in households with income between 251 and 400 percent of the FPL when the cost of dependent coverage is more than five percent of the gross household income).

In recent years, states cut CHIP outreach budgets and relied more heavily on grass roots and community-based outreach efforts.

Aggressive outreach was a hallmark of CHIP programs in the late 1990s and early 2000s, when states launched strategic efforts to market CHIP to eligible populations. States publicized the availability of health insurance coverage through initiatives that involved both broad, statewide marketing to create a strong brand identity for their programs and more targeted, community-based efforts to attract hard-to-reach families (Hill et al. 2003; Williams and Rosenbach 2007). Between 2006 and 2012, CHIP outreach efforts in the 10 study states evolved in response to state budget constraints and as the program became more established. States typically moved away from broad marketing campaigns and instead relied more on community-based efforts.

  • Although marketing budgets have dwindled or been eliminated over the years in most of the study states, three of the states—Texas, Utah, and Virginia—continued to dedicate some state funds to supporting outreach.
  • More commonly, outreach is supported through robust community-based outreach efforts, which have persisted in 9 of the 10 study states—all but Alabama, where all outreach was halted in late 2011 in an attempt to curtail enrollment as the program faced severe budget constraints. Many key informants acknowledged that the shift to community-based outreach was appropriate given that states had already enrolled a large proportion of eligible children; the remaining eligible but not enrolled children were likely harder-to-reach populations who would more apt to be identified by trusted community allies.
  • In states like New York, health plans have also played a major role in CHIP outreach and marketing, filling some of the void left as states reduced and/or eliminated outreach budgets.

CHIPRA also emphasized a focus on outreach through the authorization of new outreach grants—each lasting up to two years—designed to fund activities that support enrollment, renewal, and outreach.

Nationally, CHIPRA outreach grant funding amounts ranged from $70,000 to $2.5 million per awardee. In some cases, projects supported by CHIPRA outreach grants have coordinated with the states to ensure the most effective use of these additional resources. In some states, such as Louisiana, the state agency was a grantee, allowing them to directly support outreach efforts.

  • In the survey of state program administrators, CHIP administrators from 43 states (of 47 responding to the question) reported that organizations in their states—typically state and local governments and/or community-based and nonprofit organizations—received CHIPRA outreach grants.
  • In the evaluation’s case studies, officials reported that CHIPRA outreach grants had been particularly helpful in bolstering otherwise underfunded outreach efforts, and played a significant role in supporting and sustaining community-based groups involved in outreach.

Regardless of whether or not they received a grant, administrators from 30 states that participated in the survey of CHIP administrators thought that CHIPRA outreach grants should be continued past September 2013. Common reasons given by officials for continuing the grants included the lack of other sources for outreach funding and the ability to use grant money to fund grassroots campaigns and other efforts to target harder-to-reach populations within their states.24

CHIPRA required comprehensive dental benefits and mental health parity in CHIP programs; according to a survey of CHIP administrators, 12 states reported modifying their dental benefits and 19 reported modifying their mental health benefits in order to comply.

Since CHIP began, states with separate CHIP programs have had a degree of flexibility in designing their benefit packages, whereas states that implement Medicaid expansions must extend the full Medicaid benefit package to enrollees. To help ensure that separate programs offered adequate benefits, however, Title XXI requires that states meet certain minimum benchmark standards. Despite not being required to achieve parity with Medicaid, most states with separate programs went beyond benchmark minimums to add broad coverage of dental care and mental health benefits, seeking to closely align benefits between separate CHIP programs and Medicaid. Key informants and parents participating in the study’s focus groups consistently praised the generosity of the CHIP benefit packages, although a few deficiencies were noted, such as the lack of nonemergency transportation and EPSDT protections.25 Many child health advocates believe the lack of an EPSDT requirement is a weakness of many separate CHIP programs because EPSDT requires states to cover any service a child needs that is identified during an EPSDT screen. However, some separate states have elected to offer EPSDT protections.

CHIPRA introduced two new mandatory benefits in CHIP: comprehensive dental benefits and mental health parity.

  • In the survey of CHIP administrators, a dozen states reported having to remove limits on preexisting dental benefits or increase their coverage of particular dental benefits; the addition of medically necessary orthodontia was the most frequently reported benefit increase, by administrators from 7 states.
  • Meanwhile, administrators from 28 states reported that they did not need to make any changes to conform to CHIPRA’s mental health parity provisions; if federal regulations are issued, this could change. Among the 19 states that made some changes, 14 reduced or eliminated limits previously imposed on mental health and substance abuse services, and 2 implemented a limit on physical health services to comply with parity rules.

States have continued to offer generous benefits in CHIP despite increased budget pressures in recent years. This is notable given that, in light of MOE restrictions, benefits were one of the few program areas where policymakers had the ability to enact cuts. CHIPRA may have had a protective effect on these benefits, as without the CHIPRA benefit mandates, dental and mental health might have been cut in response to state budget constraints.

CHIP programs continued to utilize managed care service delivery networks, viewing the model as one that offers good access to care.

Earlier CHIP evaluations found mandatory enrollment in risk-based managed care plans to be the dominant form of service delivery for separate CHIP programs, more so than for Medicaid (Hill et al. 2003). This trend continued during the current study period (although Medicaid programs have generally increased their reliance on risk-based managed care over the last decade). CHIP program officials reported various reasons for choosing risk-based managed care, but primarily they viewed the delivery model as one that helps to ensure good access to care through provider networks that resemble commercial insurance networks. Among the 10 study states, only Alabama used discounted fee-for-service reimbursement with a single insurer—Blue Cross/Blue Shield of Alabama—for its separate CHIP program. The remaining states all used risk-based managed care statewide by 2012.

CHIPRA required that CHIP beneficiaries be offered a choice of at least two health plans when risk-based managed care is mandatory (a requirement that also exists for Medicaid managed care). This created challenges for states such as Florida and New York that previously contracted with single plans in certain rural areas. Both of these states complied with the new requirement, but not without considerable effort, as it can be difficult to develop networks in sparsely populated areas.

Most CHIP (and Medicaid) managed care programs in the study states carved out behavioral health and dental care and delivered these services through other arrangements. The exceptions were New York, where health plans were responsible for all care, including behavioral health and dental services; Utah, where plans were responsible for behavioral health care but not dental care; and Ohio, where plans must provide dental care but not behavioral health services.

  • Key informants generally agreed that carve-outs for dental care work well, because specially designed dental plans have wider networks than traditional FFS programs and are more experienced with managing the provision of dental services compared to health plans.
  • Key informants had mixed opinions of behavioral health carve-outs: some thought that they resulted in more effective, specialized service provision for people with mental health and substance abuse needs, but others were concerned that they fragmented care across physical health and behavioral health systems.

Key informants and parents expressed broad satisfaction with access to care in separate CHIP programs. Access to primary care was viewed as particularly strong, because of high levels of participation by pediatricians. These generally positive comments about access were less frequently made by key informants and parents in reference to Medicaid expansion programs. Provider reimbursement rates were reportedly lower, on average, in Medicaid expansions than in separate CHIP programs, and key informants suggested that, as a consequence, provider participation and access to care were generally more limited, particularly in the case of dental care.

Cost-sharing remained a prominent feature of CHIP programs, in part because CHIP was intended to mirror private coverage.

Federal law permits states to impose various forms of cost-sharing on families enrolled in CHIP—including premiums, copayments, deductibles, and coinsurance—as long as total cost-sharing remains under 5 percent of a family’s income. Cost-sharing for children with family incomes below 150 percent of the FPL is limited. The first CHIP evaluation found that separate CHIP programs established premiums and copayments at levels that both administrators and families viewed as fair and affordable. At that time, many key informants believed that such cost-sharing had a beneficial effect in that it made CHIP feel more like private insurance, instilling a sense of pride and responsibility in families that contributed to the cost of their children’s coverage (Hill et al. 2003). Most key informants interviewed for this evaluation continued to view cost-sharing as a positive component of CHIP; the vast majority of parents participating in the study’s focus groups saw CHIP cost-sharing as both fair and affordable, and much less expensive than private insurance. CHIPRA’s requirement that states allow a 30-day grace period before disenrolling children for nonpayment of premiums was cited as an important new protection for families.

When the case studies were conducted in 2012, Ohio (a Medicaid expansion-only state) was the only case study state without some form of cost sharing. Cost-sharing policies varied from state to state and included annual enrollment fees (in two of the study states), monthly or quarterly premiums (six states), copayments (seven states), and deductibles and coinsurance (two states). Six of the 10 study states increased premiums between 2006 and 2010, mostly in response to worsening state budget conditions. Of the nine states with cost sharing, seven required copayments (Table II.3).

  • Copayments were tied to income level and varied depending on the type of service. For example, copayments for medical office visits ranged from $2 in Virginia for families between 101 and 150 percent of FPL, to $25 in Utah and Texas for families with higher incomes.
  • Prescription drug copays also varied greatly, as states charge different amounts for generic and brand name medications. In Texas, for instance, families with incomes up to 150 percent of FPL receive free generic prescriptions, while families in California in the same income bracket pay $10 per generic prescription.
  • Emergency room visit copayments were generally the most expensive across the seven states, particularly for non-emergency use: families between 151 and 200 percent of FPL pay between $25 in Virginia to $300 in Utah for a visit to the emergency room.

Table II.3. Copayment and Deductible Amounts for Selected Services, Case Study States, 2012

State Program % FPL Medical Office Visits Amount (Non-Preventive) Generic Prescription Drug Brand Prescription Drug ER Deductible
Alabama ALL Kids 101-150% 151-300% $3 $13 $1 $5 $5 $25 $6 $60 NA NA
California Healthy Families all eligible $10 $10 $15 $15 NA
Florida Healthy Kids all eligible $5 $5 $5 $10 (if inappropriate) NA
Louisiana LaCHIP Affordable Plan all eligible Enrollees pay 10% of the fee- for-service rate in- network and 30% out-of-network Enrollees pay 50% of costs or a maximum of $50 for a 30 day supply Enrollees pay 50% of costs or a maximum of $50 for a 30 day supply $150 (waived if admitted) $200 for mental health/substance abuse services
Texas CHIP 0-100% $3 $0 generic $3 $3 nonemergency NA
Texas CHIP 101-150% $5 $0 generic $5 $5 nonemergency NA
Texas CHIP 151-185% $20 $10 generic $35 $75 nonemergency NA
Texas CHIP 186-200% $25 $10 generic $35 $75 nonemergency NA
Utah CHIP Plan A <100% $3 $1 generic $1 $3 None
Utah CHIP Plan B 101-150% $5 $5 generic 5% of approved amount $5 $10 nonemergency $40/family
Utah CHIP Plan C 151-200% $25 $15 generic 25% of approved amount $300 after deductible $500/child; $1500/family max
Virginia FAMIS 134-150%; ages 6-1 8 $2 $2 $2 $2 ($10 nonemergency) NA
Virginia FAMIS 151-200%; ages 6-1 8 $5 $5 $5 $5 ($25 nonemergency) NA

Source: Case Study Reports prepared by the Urban Institute and Mathematica Policy Research for the CHIPRA-mandated evaluation of CHIP, 2012

Although some states increased beneficiary cost-sharing during the study period, cost-sharing generally was perceived as affordable.

Given weak state budget environments in recent years, states increasingly looked to increase enrollee cost-sharing as a lever to address budget pressures as well as to discourage inappropriate utilization. Cost-sharing increases have not come without some controversy. State legislators in some of the study states expressed the belief that increasing cost-sharing was the “last, best option” for preserving CHIP, whereas advocates and other policymakers expressed concern that such increases could deter families from enrolling their children in CHIP, maintaining coverage in the program, or utilizing services when needed.

  • Though no hard data were available, informants in Louisiana, for example, blamed high premiums for low enrollment in LaCHIP Affordable Plan and advocates in Utah believed that “expensive” premiums for higher-income families had led to adverse selection.
  • Similarly, in Texas, CHIP copayments have risen substantially in recent years reportedly to offset the increased costs of implementing the CHIPRA mental health parity and expanded dental benefit requirements; for example, children in families with income from 186 – 200% of the FPL now have a $25 copayment for an office visit and a $125 copayment for an inpatient facility. Some stakeholders in Texas worried that such high copayments may have prevented families from seeking timely care.

Despite these concerns, the majority of key informants reported they perceived cost-sharing levels in CHIP as relatively modest, especially compared with commercial coverage. Furthermore, state officials reported that relatively few families were known to have incurred out-of-pocket costs approaching the 5 percent of income limit.

20 The data collection methods and findings from the case studies were documented in Hill et al. (2013a); the data collection methods and findings from the state program administrator survey were documented in Hoag et al. (2013).

21 ELE is set to expire on September 30, 2015 unless Congress acts to extend it.

22 Churn refers to the phenomenon whereby children lose eligibility for administrative reasons and subsequently re-enroll into coverage a short time later.

23 Chapter IV provides information from a formal analysis of the extent of substitution in the study states based on data from the 2012 survey of CHIP enrollees and disenrollees.

24 On July 2, 2013 DHHS awarded $32 million to fund Connecting Kids to Coverage Outreach and Enrollment grants (Cycle III), awarding 41 grants in 22 states; an addition $4 million will be awarded in 2014 to Indian health care providers and tribal entities. (

25 The Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) program is a special component required of Medicaid programs that extends comprehensive preventive, diagnostic, and treatment services to child enrollees. EPSDT is not required under CHIP.

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