For families trying to decide between CHIP and a private health insurance plan, the cost difference can be dramatic. CHIP (the Children's Health Insurance Program) offers low-cost or free coverage to children in families who earn too much for Medicaid but cannot afford standard private coverage. In many cases, families choosing between the two programs are looking at a difference of hundreds of dollars per month.
This guide breaks down what each option covers, what it costs, who qualifies, and how to figure out which makes more sense for your family.
What Is CHIP?
CHIP is a joint federal and state program that provides health coverage to children under age 19 whose families earn above the Medicaid limit but below a state-determined income ceiling. Congress created CHIP in 1997 specifically to fill the gap between Medicaid and private insurance affordability.
Each state runs its own version of CHIP with different names (Texas has "CHIP," California has "Medi-Cal for children," New York has "Child Health Plus"), but all programs follow federal minimum standards. Coverage must include doctor visits, prescriptions, hospital care, dental care, mental health services, and emergency care. States can add benefits on top of that floor.
Around 7 million children are enrolled in CHIP nationally. The program is designed so that families who cannot realistically afford private coverage can keep their children insured without choosing between the premium and groceries.
What Private Insurance Covers for Children
Private insurance options for families generally fall into three categories: employer-sponsored plans, ACA Marketplace plans, and off-marketplace plans.
Employer-sponsored coverage is the most common form of private insurance in the U.S. In 2025, average annual family premiums from employers reached approximately $27,000, though employers typically pay the majority of that cost. The employee's share alone often runs $6,000 to $12,000 per year for family coverage.
ACA Marketplace plans are available to families who do not have access to affordable employer coverage. In 2026, marketplace premiums jumped roughly 21% compared to 2025, pushing unsubsidized family plan costs to approximately $900 to $2,000 per month depending on the plan tier and location. A child-only marketplace plan typically costs around $425 per month before subsidies.
Private plans vary significantly in what they cover. Dental and vision are usually separate purchases, adding cost on top of the base medical premium. Deductibles on private plans frequently run $1,500 to $6,000 per person before coverage kicks in fully.
Cost Comparison: CHIP vs Private Insurance
The table below shows how costs differ across coverage options for a family of four in 2025-2026.
| Coverage Type | Monthly Premium (Est.) | Dental/Vision Included | Typical Deductible |
|---|---|---|---|
| CHIP (free tier) | $0 | Yes | $0 to low copays |
| CHIP (premium tier) | $15 to $50/family | Yes | Low copays |
| Employer plan (employee share) | $500 to $1,000 | Usually separate | $1,500 to $6,000 |
| ACA Marketplace (unsubsidized) | $900 to $2,000 | Usually separate | $1,500 to $8,700 |
| ACA Marketplace (with subsidy) | $0 to $300 (varies) | Usually separate | $1,500 to $8,700 |
CHIP requires families to pay no more than 5% of annual household income for all CHIP costs combined. For a family earning $60,000 per year, that cap is $3,000 annually, or $250 per month maximum for all CHIP services combined. In practice, most families pay far less.
CHIP Income Limits by State
Income limits for CHIP are set by each state. The federal minimum is 200% of the Federal Poverty Level (FPL), but most states set their cutoffs higher. The 2025 FPL for a family of four is $31,200, making 200% FPL equal to $62,400.
| State | CHIP Upper Income Limit (FPL %) | Annual Income Limit (Family of 4, approx.) |
|---|---|---|
| California | 266% | ~$83,000 |
| New York | 400% | ~$124,800 |
| Texas | 200% | ~$62,400 |
| Florida | 210% | ~$65,520 |
| Illinois | 313% | ~$97,656 |
| Pennsylvania | 317% | ~$98,904 |
| Ohio | 206% | ~$64,272 |
| Georgia | 247% | ~$77,064 |
| North Carolina | 210% | ~$65,520 |
| Michigan | 212% | ~$66,144 |
States with higher limits extend CHIP to middle-income families who would otherwise pay full private insurance rates. New York's 400% FPL limit, for example, means a family of four earning up to roughly $125,000 per year may still qualify.
Note that income limits change annually when the federal poverty guidelines update. Always verify your state's current limits directly before applying.
What CHIP Covers vs Private Insurance
Both programs cover the core medical needs for children, but the details differ.
| Benefit | CHIP | Typical Private Plan |
|---|---|---|
| Doctor visits | Yes | Yes |
| Hospital care | Yes | Yes |
| Prescriptions | Yes | Yes (formulary limits) |
| Dental care | Yes (mandatory) | Usually separate policy |
| Vision care | Yes (most states) | Usually separate policy |
| Mental health | Yes | Yes (parity laws apply) |
| Emergency care | Yes | Yes |
| Preventive care | Yes, free | Yes (ACA plans) |
| Copays | Low, often $5 to $35 | Often $20 to $60+ |
| Out-of-pocket max | Capped at 5% of income | Up to $9,450 per person (2025) |
The dental and vision inclusion in CHIP is a meaningful advantage. Families on private medical-only plans who want dental coverage typically add $50 to $150 per month in separate dental premiums. Vision adds another $20 to $40 per month. CHIP bundles all of this together.
Who Qualifies for CHIP
To qualify for CHIP, a child generally must:
- Be under 19 years old
- Be a U.S. citizen or meet immigration status requirements
- Be a state resident
- Have household income below the state's CHIP income limit
- Not have access to affordable, adequate employer coverage (in most states)
Some states have waiting periods for children who recently dropped private coverage and are applying for CHIP. This prevents families from dropping insurance to enroll in CHIP and then re-enrolling later. Most states have either eliminated or shortened these waiting periods.
Children do not have to be completely uninsured to qualify. Some states allow children with limited employer coverage (for example, employer plans that do not cover dental or vision) to enroll in CHIP to supplement their existing plan.
How to Apply for CHIP
Step 1: Check your state's income limits Each state's CHIP program has its own eligibility rules. Use the income table above as a starting point, or visit your state's Medicaid and CHIP website for exact current figures.
Step 2: Gather your documents You will typically need:
- Proof of income (recent pay stubs, tax return, or employer letter)
- Proof of age for each child (birth certificate or passport)
- Proof of residency (utility bill or lease)
- Social Security numbers for children and parents
- Information about any current health insurance
Step 3: Submit an application Applications can be submitted through multiple channels:
- Healthcare.gov (routes to your state's program)
- Your state's Medicaid or CHIP portal directly
- In person at a local Medicaid office
- By phone through your state's CHIP hotline
- Through a certified application counselor or navigator
Step 4: Wait for a determination Most states process CHIP applications within 45 days. Many states act faster, often within two weeks. Your children may be covered for emergency services while the application is pending.
Step 5: Enroll and receive your insurance card Once approved, you will receive enrollment materials and insurance cards in the mail. Coverage typically starts at the beginning of the month following approval.
When Private Insurance Makes More Sense
CHIP is the stronger financial choice for most families who qualify, but private insurance can be the better option in certain situations.
When your employer subsidizes a good family plan heavily. Some employers cover 80% or more of family premiums. If your out-of-pocket share is $300 to $400 per month for comprehensive coverage, it may be comparable to or better than CHIP, especially if the plan includes your preferred pediatricians.
When your family's income is likely to change. If you expect a raise or income increase mid-year, CHIP enrollment could be disrupted if income rises above the limit. Private insurance coverage does not depend on income verification.
When your preferred pediatrician does not accept CHIP. CHIP uses Medicaid-adjacent provider networks, which can be narrower than private plan networks in some areas. Check whether your child's current doctors accept CHIP before switching.
When your children are also covering the whole family. CHIP is only for children. Parents and adults cannot enroll. If you need coverage for the whole family and only the children qualify for CHIP, you would need to carry separate coverage for adults. In that scenario, an ACA family plan might be simpler to manage even if children are technically CHIP-eligible.
Can Children Have Both CHIP and Private Insurance?
Yes. Children can have both private insurance and CHIP simultaneously in most states. In this case, CHIP typically acts as secondary insurance, covering costs the private plan does not. This is most useful for families where employer coverage exists but has high deductibles or gaps in dental and vision.
If your private insurance is considered unaffordable under federal standards (meaning the employee-only share exceeds approximately 9.02% of household income in 2025), children may qualify for CHIP even if the parent technically has access to employer coverage.
ACA Subsidies as a Third Option
Families who earn above the CHIP income limit but still find private insurance expensive may qualify for ACA premium tax credits on the Marketplace. In 2026, families earning up to 400% FPL (about $124,800 for a family of four) may qualify for subsidies that reduce monthly premiums significantly.
The Marketplace also offers cost-sharing reductions for families below 250% FPL that lower deductibles and out-of-pocket costs on Silver plans. If your family earns slightly above the CHIP limit, running the numbers on a subsidized Marketplace plan is worth doing.
Use the Benefits Navigator screener at /screener to check eligibility for CHIP, Medicaid, and ACA subsidies simultaneously in a few minutes.
Frequently Asked Questions
Does CHIP cover dental and vision?
Yes. Federal law requires all state CHIP programs to cover dental services. Most states also cover vision care, though it is not federally mandated. This is a key advantage over most private plans, where dental and vision require separate purchases.
What is the income limit for CHIP in 2025?
Income limits vary by state. Most states cover children in families earning between 200% and 300% of the Federal Poverty Level. For a family of four in 2025, 200% FPL is approximately $62,400 per year. Some states go higher. New York covers children in families up to 400% FPL, which is roughly $124,800 for a family of four.
Can I keep my private insurance and add CHIP?
In most states, yes. If your child already has private insurance, CHIP can act as secondary coverage for costs the primary plan does not cover. Contact your state's CHIP program to understand how coordination of benefits works in your state.
Do I have to pay for CHIP?
Many families pay nothing. Whether you pay a premium depends on your state and your household income. Families with income near the lower end of CHIP eligibility often pay no premium. Higher-income families within the CHIP range may pay modest premiums, typically $15 to $50 per month for the family. No family pays more than 5% of annual income total for all CHIP services.
What happens when my child turns 19?
CHIP coverage ends at age 19. At that point, children may qualify for Medicaid if income is low enough, or they can enroll in an ACA Marketplace plan as a dependent or as an individual. Young adults under 26 can also remain on a parent's private plan under ACA rules.
How long does CHIP approval take?
Most states process applications within 45 days. Many states act within two weeks. Emergency services are typically covered from the date of application while the application is under review.
Is CHIP the same as Medicaid?
No, though the two programs work closely together. Medicaid covers children and adults in very low-income families. CHIP covers children in families that earn above the Medicaid limit but below the CHIP income ceiling. Both are state-administered programs with federal funding and oversight, but they have different income thresholds and slightly different benefit structures.
Can undocumented children get CHIP?
CHIP requires children to be U.S. citizens or meet specific immigration status requirements. Lawfully present immigrants generally qualify. Undocumented children do not qualify for federal CHIP funding, though some states use state funds to provide coverage to undocumented children through separate programs. Check your state's specific rules.
