FINANCE OF CHIP
Federal and state governments jointly finance CHIP, although the
federal government assumes a larger share of the financing with an enhanced federal matching rate ranging from 65 to 82 percent, an average of 15 percentage points higher than Medicaid’s matching rate.
This capped funding is distributed through state-specific allotments established by a statutory formula that accounts for the state’s actual use of CHIP funds and is adjusted for health care inflation and child population growth.