Editor's Note: Despite dramatic improvements over the past few decades, lead poisoning continues to be a serious hazard for many children in the U.S., presenting significant risks to their health and learning. The Children's Health Insurance Program (CHIP) can provide critical financial support to states and local communities that often face financing challenges as they seek to implement cost-effective lead abatement activities. In a new issue brief for the Robert Wood Johnson Foundation's State Health and Value Strategies Program, Manatt Health describes the CHIP State Plan option (no waiver required) and the opportunity it provides for states to significantly reduce lead exposure and improve children's health. The issue brief is summarized below. Click here to download a free copy of the full brief. ______________________________________________

More than four million families with children live in homes with high levels of lead and approximately half a million children under the age of five have blood lead levels above the recommended level. Lead exposure can cause serious physical and neurological damage to children. Even low levels of lead exposure can impact children's brain development and may result in reduced IQs, shortened attention spans or hearing and speech problems. Lead exposure also can cause anemia, hypertension, renal impairment, immunotoxicity and toxicity to reproductive organs. Low-income children, many of whom live in older housing, are particularly vulnerable to lead exposure. Research has shown that lead abatement efforts can yield significant cost savings through a range of societal benefits.

Under a long-standing but relatively under-utilized CHIP provision—known as the health services initiative (HSI)—states can leverage federal funding to develop and implement health initiatives for low-income children, including those that support lead exposure testing, prevention and abatement. To date, 19 states have received approval for CHIP HSIs for a variety of child health initiatives.

Opportunity to Use CHIP Funding to Combat Lead Poisoning

Title XXI of the Social Security Act—the federal authority for CHIP—provides states with a unique opportunity to access federal funds that they can use in targeted ways to reduce children's exposure to lead. Under the statute, states have the option to draw down federal matching funds at the enhanced CHIP rate for certain noncoverage expenditures, as long as those expenditures do not exceed ten percent of the total amount that a state spends on CHIP health benefits.

The noncoverage activities that are eligible for the CHIP federal matching rate include administrative costs related to the operation of CHIP, as well as expenditures for HSIs targeted at improving the health of low-income children. As CMS recently confirmed in its Frequently Asked Questions (FAQs) on HSIs, lead exposure and abatement programs aimed at low-income children are an authorized use of HSIs under CHIP authority.

Importantly, the CHIP matching rate for approved expenditures has always been higher than the Medicaid matching rate—and the Affordable Care Act (ACA) increased the Federal Medical Assistance Percentage (FMAP) for CHIP expenditures (including HSIs) by 23 points through September 30, 2019, making the minimum CHIP FMAP rate 88 percent in Fiscal Year 2017. Therefore, with relatively modest investment, states can draw down federal funds for HSIs up to the limit for noncoverage expenditures, creating an opportunity to make significant headway on lead testing, prevention and abatement for low-income children.


The option to secure a CHIP HSI is part of the CHIP state plan template that states must complete and submit as they would for any other CHIP State Plan Amendment (SPA). Before submitting an HSI SPA to the Centers for Medicare & Medicaid Services (CMS) for approval, a state should develop a proposed lead abatement initiative and determine the funds available for an HSI lead abatement program. As long as the state keeps its noncoverage costs (i.e., administrative expenditures and HSI spending) within the ten percent limit, its expenditures for the approved HSI will be matched at the applicable CHIP matching rate.

Once a state determines the availability of funding for its HSI, it has considerable flexibility in designing a lead abatement program to meet the needs of low-income children younger than 19. States do not need to:

  • Seek a waiver;
  • Limit the initiative to children enrolled in Medicaid/CHIP, as long as the HSI targets low-income children (though guidance encourages states to enroll eligible children);
  • Operate the HSI statewide; or
  • Have a separate CHIP program. (States with CHIP-funded Medicaid expansions can receive HSI funding.)

To receive HSI funding for lead poisoning prevention and abatement, however, states must:

  • Demonstrate the need for HSI;
  • Describe an HSI proposal that is targeted at improving the health of low-income children;
  • Identify source(s) of state share funding;
  • Estimate the number of low-income children who will be served;
  • Include a clearly defined timeframe for the initiative; and
  • Meet the defined program design criteria (such as ensuring the individuals performing abatement services are state certified, among other criteria defined in CMS's recent FAQs).

Overview of State HSI Activities

Currently, 26 HSI SPAs are approved in 19 states, including Michigan which is using the HSI option to fund programs that support lead hazard detection, abatement and prevention. Some states focus primarily on projects to support statewide poison control centers that provide 24-hour emergency telephone treatment advice, referral assistance and information to manage exposure to poisonous and hazardous substances with respect to low-income children. Other states use the HSI funding to support a myriad of other initiatives, including supporting school health services, home visiting for at-risk newborns and their parents, and smoking cessation.

Given the urgent need to address lead exposure among low-income children, a targeted, effective strategy is essential for accomplishing state and local goals. No one strategy, however, is right for all communities. Each must find the optimal approach for its specific situation.


While CMS's HSI guidance is two decades old, states are only recently becoming aware of the opportunities to use HSI funding to support lead abatement activities. Given the considerable health, educational and societal risks associated with lead poisoning among low-income children, HSI funding presents a unique opportunity for states to stabilize and supplement existing funding for lead abatement activities and help prevent lead poisoning for the next generation of children.