Medicaid and Children’s Health Insurance Program (CHIP)

Medicaid and Children’s Health Insurance Program (CHIP)

Medicaid is a joint health insurance program between federal and state governments for individuals with low incomes who meet certain income, citizenship, and other eligibility requirements. As with private health insurance, Medicaid covers a wide range of medical services and procedures, such as inpatient hospital care, doctor visits, emergency services, prescription drugs, and home health care. The US Department of Health and Human Services establishes baseline eligibility, although states can broaden participation for their residents. States administer the insurance enrollment. In DC, the Department of Health Care Finance (DHCF) administers Medicaid.

The Children’s Health Insurance Program (CHIP), known locally as DC Healthy Families, is also a joint federal-state program. It is designed to provide seamless coverage for children in families with incomes above the federal Medicaid limit and also caps a family’s copays for insurance coverage at 5% of the family’s annual income. Because Medicaid and CHIP are administered jointly at the state level, if household income fluctuates, children do not risk loss of health coverage.

Eligibility and Application Requirements

In order to qualify for coverage through Medicaid and DC Healthy Families, individuals must meet certain financial and non-financial requirements. Financial eligibility is calculated as a percentage of the Federal Poverty Level (FPL) and the cut-off for public health insurance varies by demographic category: 

District residents can apply for Medicaid/CHIP online through DHCF or the Department of Human Services’ Combined Application for Benefits. Assistance with online and paper applications is available at DHS benefit service centers and DC Health Benefit Exchanges’ in-person enrollment centers or by phone.²

Impact of Medicaid and DC Healthy Families

In addition to the vast array of clinical services and long-term health benefits that public health insurance provides, research demonstrates that access to Medicaid/CHIP significantly reduces medical debt and family poverty.³ For children, access to Medicaid/CHIP has been linked to fewer chronic conditions, less frequent hospitalizations, and increased rates of educational attainment. For youth and adults alike, the expansion of Medicaid over the years has proven to improve access to preventative care and mental health services, decrease mortality by 6%, and reduce reliance on emergency services.

Funding and Participation

DC Medicaid and DC Healthy Families cover roughly 270,000 people, or about 40% of District residents. Notably, 96% of all children who are eligible for Medicaid/CHIP are enrolled in coverage and of all births in the District, 46% were covered by Medicaid as of 2023, making public health insurance a critical contributor to the District’s maternal, infant, and child health landscape. Medicaid/CHIP is also a powerful tool for reducing racial health disparities. Because Black children in DC are many times more likely than white children to be living in or close to poverty, roughly 3 out of 4 children enrolled in Medicaid and Healthy Families in DC are Black and most of the rest are Latinx. Across adults and children, nearly 95% of all non-elderly DC Medicaid participants are people of color. If funding for Medicaid/CHIP is reduced, Black and brown children and families will suffer most.  

The Department of Health Care Finance’s approved FY2025 budget was over $4.86 billion. Of that, the agency anticipated spending $4.44 billion on health services for Medicaid/DC Healthy Families enrollees (federal share: $3.4B). However, during DHCF’s oversight hearing on February 20, 2025, Director Turnage said the agency projects spending closer to $5.2 billion due to enrollment and inflation costs.  

Using a payment rate known as the Federal Medical Assistance Percentage (FMAP) based on a state’s per-capita income – and in the case of DC, the District’s unique inability to generate revenue – the federal government currently funds 70% of DC’s Medicaid costs (including CHIP). The Republican-controlled Congress and Trump Administration have recently threatened to recalculate the District’s FMAP to 50% despite the major ways in which the District’s ability to raise revenue is restricted by federal law.⁴ Combined with other Medicaid changes being explored by federal lawmakers,⁵ DC risks losing as much as $1.1 billion in health care funding annually, likely forcing the District to reduce income eligibility levels, restrict enrollment, deny coverage for certain types of care, or otherwise limit Medicaid spending. These restrictions would be catastrophic for thousands of the District’s most economically marginalized and medically vulnerable individuals and would destabilize the District’s larger health services delivery system.  

Recommendations

• District policymakers at all levels engage with the US Congress and federal agencies to maintain the District’s existing and fair 70% FMAP percentage. 

• Improve access to routine and specialized health care services for children. DHCF reported that only 53% of children enrolled in Medicaid/DC Healthy Families had a well-child visit in FY22,⁶ suggesting barriers with appointment scheduling, acceptance of public insurance plans, and navigation of health service coverage. The District must remove these barriers.
• Address technical and interagency issues that result in erroneous refusal or cancellation of Medicaid benefits. Organizations that support clients applying for benefits report ongoing issues with the District Coordinated Access System (DCAS), causing people to be erroneously denied enrollment.