In early 2025, the Centers for Medicare & Medicaid Services (CMS) finalized sweeping changes to Medicaid and CHIP (Children’s Health Insurance Program)—redefining eligibility, enrollment, and continuous coverage rules for children and families across the United States.
The CMS Final Rule, issued under the authority of the Consolidated Appropriations Act and the Affordable Care Act, is a transformative update aimed at streamlining coverage, reducing disenrollments, and strengthening access to healthcare for children and vulnerable populations.
Here’s what you need to know about the CHIP program changes in 2025, how they affect families, and what state agencies and healthcare providers must do to stay compliant.
CHIP (Children’s Health Insurance Program) provides low-cost health coverage to children in families who earn too much to qualify for Medicaid but not enough to afford private insurance. CHIP is federally funded but state-administered, which historically led to inconsistent rules across states.
In 2025, the CMS final rule aims to correct that by implementing federal minimum standards across CHIP and Medicaid to:
These reforms reflect growing federal efforts to create uninterrupted health coverage for children and youth.
On March 31, 2025, CMS finalized a rule titled “Streamlining Medicaid, Children’s Health Insurance Program, and Basic Health Program Application, Eligibility Determination, Enrollment, and Renewal Processes.”
The rule addresses:
📜 Effective date: Many provisions begin rolling out August 1, 2025, with full implementation deadlines by January 2026.
Here are the most impactful CHIP program changes under the CMS Final Rule:
Policy Update | Description |
Mandatory 12-Month Continuous Eligibility for Children | States must provide uninterrupted CHIP coverage for 12 months, even if family income changes. |
No Terminations Based on Income Mid-Year | Children cannot be disenrolled during the 12-month window unless they age out, move, or request disenrollment. |
Standardized Renewal Process | States must attempt automatic renewals using existing data before contacting the enrollee. |
Simplified Transitions Between Medicaid and CHIP | Children moving between Medicaid and CHIP must be transferred seamlessly without a new application. |
Denial and Disenrollment Notice Requirements | States must provide clear reasons, legal citations, and appeal information when coverage is denied or ended. |
🧠 Note: These reforms target the “churn” problem, where children lose coverage temporarily due to administrative red tape—even when still eligible.
The centerpiece of the CMS Final Rule is 12-month continuous eligibility for all children enrolled in Medicaid or CHIP.
This means:
📌 Impact: Prevents children from being dropped due to small, temporary income changes—keeping preventive care, vaccinations, and chronic condition management on track.
Requirement | Deadline |
Continuous eligibility for children | August 1, 2025 |
Renewal simplification protocols | October 2025 |
Seamless Medicaid ↔ CHIP transitions | January 2026 |
Updated disenrollment notices | January 2026 |
🔍 Enforcement: CMS will monitor state compliance through regular audits and State Plan Amendment (SPA) updates. Non-compliant states risk federal funding penalties.