CHIP provides coverage for low-income Texas children who do not qualify for Medicaid but lack health care coverage. The program was created in 1997 and is funded by the state and the federal government according to an enhanced federal medical assistance percentage (EFMAP), which was increased 23 percentage points under the Affordable Care Act (ACA) to become 93 percent federally funded. In 2015, the state spent $397 million and the federal government spent $956 million on Texas CHIP. CHIP enrollment in Texas was 386,176 as of December 2016.


Eligible children are Texas residents under 19 with household incomes at or below 206 percent of the federal poverty level (FPL), or between $1,842 and $2,750 for a family of two or between $2,795 and $4,172 for a family of four. Children must also have been uninsured for ninety days prior to application to be eligible for CHIP. Pregnant women can receive CHIP Perinatal Services for their unborn children if they are Texas residents living at or below 207 percent of the FPL. Their newborns will receive services for 12 months following birth.


Covered services under CHIP include doctor visits, vision and dental care, hearing tests, hospital care, and prescriptions. Some services require a co-pay.
In addition to raising the federal match, the ACA transferred about 225,000 Texas children who were on CHIP and living in households with incomes up to 138 percent of the FPL off CHIP and onto Medicaid by 2017. It also introduced a new way of calculating income eligibility – Modified Adjusted Gross Income (MAGI) – which allows for a 5 percent income disregard and drops asset testing, thereby expanding eligibility.