CRS Issue Statement on Medicaid and CHIP

Evelyne P. Baumrucker, Coordinator
Analyst in Health Care Financing

Medicaid plays a prominent and important role in the U.S. health care system. It is a means-tested entitlement program that finances the delivery of primary and acute care medical services, and long-term care for certain low-income populations. A federal-state matching program, Medicaid is the largest or second-largest item in most state budgets, and is second only to Medicare in terms of federal spending on health care. 

The recently reauthorized Children's Health Insurance Program (CHIP) allows states to cover targeted low-income children with no health insurance in families with income that is above Medicaid eligibility levels. Some adults (e.g., parents) may also be covered typically via special waivers. Current federal CHIP funding extends through FY2013. Unlike Medicaid, CHIP is not an entitlement program; instead federal matching funds are allotted to the states which in turn determine eligibility rules and covered benefits within broad federal guidelines. 

Three distinct policy issues are at the heart of Congress's focus on Medicaid and CHIP. Should the federal government provide additional Medicaid funds to states during a recession, and for how long? What is the role of the federal government in funding and program design to ensure long-term sustainability of the program? And, what should be the role of Medicaid and CHIP in light of efforts to reform the nation's health care system?


Date of Report: January 14, 2010
Number of Pages: 4
Order Number: IS40379
Price: $7.95

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