Best Health Plan for You: Medicaid or CHIP?

When it comes to the best health plan option, many people often overlook government-funded programs like Medicaid and the Children’s Health Insurance Program (CHIP). However, for individuals and families who qualify, these programs can offer access to affordable, comprehensive health coverage. In this article, we’ll take a deep dive into what Medicaid and CHIP are, how they work, their benefits, and how they can help you find the best health plan for your specific needs.

What is Medicaid?

Medicaid is a federal and state program offering healthcare coverage to eligible low-income individuals and families. Its scope includes hospital and doctor visits, prescription medications, mental health care, and long-term services.

How Medicaid Works

Eligibility: Determined by income, assets, and family size. Generally, individuals with incomes at or below 138% of the Federal Poverty Level (FPL) qualify in Medicaid expansion states.
Coverage: Includes emergency services, preventive care, prescription drugs, and more. Some states also provide dental, vision, and transportation benefits.
Administration: Medicaid is managed by states, allowing some variation in benefits and eligibility.

Eligibility for Medicaid

Eligibility for Medicaid is primarily determined by income, but several other factors come into play:

Income: Medicaid eligibility is based on your income in relation to the federal poverty level (FPL). For example, in 2025, the federal poverty level for a family of four is $31,200. Medicaid is available for those whose income falls below 138% of the FPL in expansion states, and 100% or lower for non-expansion states.
Age and Disability: Children, pregnant women, elderly individuals, and people with disabilities are generally eligible for Medicaid, regardless of income level, in all states.
Family Size: Larger families typically qualify for Medicaid with higher income thresholds because federal poverty limits are higher for larger households.
Citizenship: Applicants must be U.S. citizens or legal residents. However, there are state variations and there are exceptions for certain groups, such as refugees and asylum seekers.
State-Specific Rules: Since Medicaid is administered by states, each state can set its own additional eligibility requirements. For example, some states may have expanded Medicaid to cover more low-income adults in order to offer a best health plan, while others may have stricter requirements.

Understanding Medicaid and CHIP: Finding the Best Health Plan for You

When exploring health insurance options, Medicaid and the Children’s Health Insurance Program (CHIP) often go unnoticed despite being among the most affordable and comprehensive health coverage options. These government-funded programs are crucial for low-income families and individuals, bridging the gap for those who cannot afford private insurance. This article delves into how these programs work, their benefits, and how they help you secure the best health plan for your needs.

What is Medicaid?

How Medicaid Works

Eligibility: Determined by income, assets, and family size. Generally, individuals with incomes at or below 138% of the Federal Poverty Level (FPL) qualify in Medicaid expansion states.
Coverage: Includes emergency services, preventive care, prescription drugs, and more. Some states also provide dental, vision, and transportation benefits.
Administration: Medicaid is managed by states, allowing some variation in benefits and eligibility.

Eligibility for Medicaid

Medicaid eligibility depends on several factors:

Income: In 2025, the federal poverty level for a family of four is $31,200. Medicaid expansion states offer coverage up to 138% of the FPL.
Special Groups: Children, pregnant women, seniors, and people with disabilities often qualify even if their income is slightly above the threshold.
Family Size: Larger families have higher income thresholds.
Citizenship: Applicants must be U.S. citizens or legal residents, with some exceptions for refugees and asylum seekers.

Medicaid Expansion Under the Affordable Care Act

The Affordable Care Act (ACA) expanded Medicaid, allowing states to extend coverage to more low-income adults.

States That Expanded Medicaid: As of 2024, 38 states and the District of Columbia have expanded Medicaid, providing coverage for individuals with incomes up to 138% of the FPL. States like California, New York, and Michigan, which expanded Medicaid, have seen significant increases in coverage, reducing the number of uninsured.
Benefits of Expansion: Increased access to preventive care, reduced medical debt, and improved public health outcomes in participating states.

What is CHIP?

The Children’s Health Insurance Program (CHIP) is another government-funded program designed to provide low-cost health coverage to children in families that earn too much money to qualify for Medicaid but cannot afford private insurance. CHIP is administered by individual states, and eligibility requirements vary depending on your income and the state you live in.

How CHIP Works

CHIP is available to children up to the age of 19. In some states, pregnant women are also eligible for coverage through CHIP. This program is intended to bridge the gap between Medicaid and private insurance, offering affordable coverage to families that don’t qualify for Medicaid but still need assistance with healthcare costs.

CHIP is a state-based program, so each state runs its own program with different benefits and eligibility guidelines. Generally, children in families with incomes too high for Medicaid but at or below 200% of the federal poverty level qualify for CHIP.

Benefits of CHIP

CHIP offers a wide range of benefits for children, including:

Comprehensive Health Coverage: CHIP covers essential services such as doctor visits, immunizations, emergency care, prescriptions, dental care, vision care, and mental health services.
Affordable Premiums and Copays: While CHIP does require premiums and copayments, the costs are often very low compared to private health plans, and they’re designed to be affordable for low-income families.
Access to Preventive Services: Like Medicaid, CHIP focuses on preventive care, ensuring that children receive regular check-ups, vaccinations, and screenings to maintain their health.
No Annual or Lifetime Limits: CHIP covers all medically necessary services, and there are no annual or lifetime limits on coverage, which is a key advantage over some private insurance plans.

CHIP vs. Medicaid

While CHIP and Medicaid are both designed to provide low-cost health insurance, there are some key differences:

Eligibility: Medicaid generally covers a wider range of individuals, including pregnant women, seniors, and individuals with disabilities, while CHIP primarily focuses on children and pregnant women.
Income Limits: Medicaid’s income limits are often lower than CHIP’s, which allows CHIP to serve families with slightly higher incomes that don’t qualify for Medicaid but still need assistance.
Benefits: Both programs offer comprehensive coverage, but CHIP typically focuses more on children’s healthcare needs, such as dental and vision care, while Medicaid may cover additional services for adults and seniors.

Changes and Updates in Medicaid and CHIP for 2024

As of 2024, there have been several important changes to both Medicaid and CHIP. For example:

Medicaid Expansion: Some states are still expanding Medicaid under the ACA, which means more low-income adults will have access to healthcare coverage.
Telehealth Services: Both Medicaid and CHIP have expanded coverage to include telehealth services, making healthcare more accessible, especially for those in rural or underserved areas.
Extended Coverage for Pregnant Women: Some states have extended Medicaid and CHIP coverage for pregnant women beyond the standard 60-day postpartum period, ensuring mothers continue to receive necessary care after childbirth.

How to Apply for Medicaid and CHIP

Applying for Medicaid and CHIP is a straightforward process, and it can be done online, by phone, or in person. To begin, you will need to:

Check Eligibility: Use the online tools provided by your state’s Medicaid or CHIP program to see if you qualify based on your income, household size, and other factors.
Submit an Application: You can apply through your state’s Medicaid or CHIP website or at a local health office. Be prepared to provide personal information, such as proof of income and residency.
Receive Coverage: Once your application is approved, you will receive your Medicaid or CHIP coverage, and you can start using it for medical visits, prescriptions, and other healthcare needs.

Simplifying the Path to the Best Health Plan with Medicaid and CHIP

Medicaid and CHIP offer affordable, comprehensive healthcare solutions for low-income families and individuals. However, navigating eligibility requirements and application processes can be daunting.PEO4You, an intermediary specializing in connecting individuals with the best coverage options available, can simplify this journey. By assessing what you qualify for, PEO4You ensures you secure the best health plan for your family. Their expert assistance helps eliminate delays and confusion, giving you peace of mind and access to essential healthcare.