CHIP was created as part of the Balanced Budget Act of 1997 (BBA 97, P.L. 105-33). To encourage states to participate, CHIP provided states with enhanced federal financing and greater flexibility in program design compared to Medicaid. At the time of CHIP’s creation, it was uncertain how many states would respond to this new federal funding opportunity. By fiscal year (FY) 2000, however, every state, territory, and the District of Columbia had children enrolled in CHIP-financed coverage.
In 1997, 10 million children were without health insurance, many of whom were in working families with incomes just above states’ Medicaid eligibility levels. Since the enactment of CHIP, the percentage of children lacking health insurance has been halved while uninsurance among adults grew. By 2012, fewer than 5 million children were uninsured for more than a year (Martinez and Cohen 2012). Seventy percent of this decline was due to additional enrollment of children in Medicaid rather than CHIP; however, the increased enrollment of children in both programs has been attributed to the availability of CHIP and the associated marketing and outreach efforts to enroll eligible but uninsured children (Dubay et al. 2007). The number of children without health insurance decreased to 3.8 million in 2016 (Clarke et al. 2017).