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Aligning Eligibility for Children: Moving the Stairstep Kids to Medicaid

A feature of the Affordable Care Act (ACA) that has not received a lot of attention requires that Medicaid cover children with incomes up to 133 percent of the federal poverty level (FPL) ($31,322 for a family of four in 2013) as of January 2014.   Today, there are “stairstep” eligibility rules for children.  States must cover children under the age of six in families with income of at least 133 percent of the FPL in Medicaid while older children and teens with incomes above 100 percent of the FPL may be covered in separate state Children’s Health Insurance Programs (CHIP) or Medicaid at state option.  While many states already cover children in Medicaid with income up to 133 percent FPL, due to the change in law, 21 states needed to transition some children from CHIP to Medicaid.  New York and Colorado implemented an early transition of children from CHIP to Medicaid.  New Hampshire and California moved or are in the process of transitioning all CHIP kids to Medicaid.  The remaining 17 states will transition an estimated 13 percent to 48 percent of their CHIP kids.

This brief examines how the transition of children from CHIP to Medicaid will affect children and families as well as states.  The brief also looks to New York and Colorado for lessons learned from the early transition of coverage.  Key findings include:

  • The change in the law will align coverage for families in Medicaid and provide access to a better benefits package, greater cost-sharing protections, and the ease and simplicity of having siblings covered in the same program.
  • While all states will need to implement enrollment simplifications required by the ACA, some states still may have more difficult enrollment procedures in Medicaid relative to CHIP, and access to providers may be more limited in Medicaid.
  •  States are likely to see some administrative efficiencies and will continue to receive the enhanced CHIP match, but the fiscal impact of the transition varies by state.
  •  Early experiences in New York and Colorado indicate that having the administrative capacity to manage the transition as well as strong public awareness and effective communication to the families, providers and stakeholder community affected are important.  States where enrollment procedures and provider networks are not aligned between Medicaid and CHIP may face additional challenges in seamlessly transitioning coverage for the stairstep kids.
Issue Brief