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MACPAC > Low-income children

Low-income children

Published On

March 03, 2020

Although Medicaid originally was available only to children in families receiving cash assistance, over the years Congress expanded eligibility for children based on income as a percentage of the federal poverty level (FPL). As a result of these expansions, states were required to cover infants and children up to age six in families with incomes up to 133 percent of the federal poverty level (FPL) and older children (ages 6 to 18) up to 100 percent FPL in Medicaid. The Patient Protection and Affordable Care Act (ACA, P.L. 111-148, as amended) aligned the mandatory minimum Medicaid eligibility level at 138 percent FPL for children of all ages.1

The  State Children’s Health Insurance Program (CHIP) was established in 1997 to provide coverage for uninsured children whose family income was too high to qualify for Medicaid. There is no mandatory income level up to which CHIP programs must extend coverage, although the federal statute limits upper income eligibility levels to 200 percent FPL or 50 percentage points above pre-CHIP Medicaid levels in states that already had high Medicaid eligibility.

Over the years, states have expanded eligibility in both Medicaid and CHIP to cover more low- and moderate-income children; the median income threshold as of July 2016 was 250 percent FPL. Click here for income thresholds by state.

The ACA also included a maintenance-of-effort (MOE) provision for children that generally prevents states from implementing more restrictive enrollment methodologies or procedures, or reducing Medicaid and CHIP eligibility below the limits that were in place on March 23, 2010, when the ACA was enacted through fiscal year (FY) 2019. Subsequent CHIP funding renewals extended the MOE in Medicaid and CHIP (for children with family incomes below 300 percent FPL) through FY 2027.

TABLE 1. Low-Income Eligibility Pathways for Children

Eligibility group Federal statutory and regulatory requirements State plan options
Low-income children Deemed newborns

  • If the mother is eligible for Medicaid, states must automatically enroll her newborn in Medicaid for one year.

Poverty-related children

  • States must cover infants (under age 1) and children ages 1 to 18 up to 133 percent FPL.1
  • States may establish different income standards for children of different ages.
 Poverty-level infants

  • States may choose to provide coverage to infants up to 185 percent FPL or higher.

CHIP-funded targeted low-income children2

  • States may choose to provide Medicaid to targeted low-income children (under age 19) using funding from CHIP.

Ribicoff option

  • States may cover all children or a state-defined reasonable classification of children under age 21 up to the 1996 AFDC levels. States have broad flexibility in defining reasonable classifications of children, other than on the basis of diagnosis or disease.
Notes: FPL is federal poverty level. Aid to Families with Dependent Children (AFDC) is the cash assistance program that was replaced by Temporary Assistance to Needy Families (TANF) in 1996.
1 In some states, infants must be covered up to 185 percent FPL because those states had already expanded to these levels when legislation was enacted in 1989 to mandate coverage up to at least 133 percent FPL. States are required to maintain these higher preexisting thresholds.
2 States have the flexibility to use their CHIP funds to expand Medicaid, create a separate CHIP program, or combine approaches.
Source: MACPAC, 2017, Federal Requirements and State Options: Eligibility.