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Issue Brief
April 2009

Covering More Children, Rewarding Success: State Performance Bonuses

There are approximately 8.6 million uninsured children in this country, and about two-thirds of them are eligible for Medicaid or CHIP. The Congressional Budget Office estimates that, because of the additional funding, tools, and incentives that were included in the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA), states will be able to cover nearly half these children (about 4.1 million children)—two-thirds of them in CHIP, and one-third of them in Medicaid. 

An important goal of CHIP reauthorization was to help states find and enroll more uninsured children who were eligible for Medicaid rather than CHIP. These are children in families with lower incomes than those who qualify for CHIP—children who are often not the focus of state outreach and enrollment efforts. One key way to encourage states to focus on enrolling these children is to reward states for their efforts. This brief focuses on the new system of performance bonuses that is designed to encourage and reward states for improving uninsured children’s participation rates in Medicaid.