CHIP provides low-cost health coverage to children in families that earn too much money to qualify for Medicaid. In some states, CHIP covers pregnant women. The Children's Health Insurance Program (CHIP)If your children need health coverage, they may be eligible for the Children's Health Insurance Program (CHIP).CHIP provides low-cost health coverage to children in families that earn too much money to qualify for Medicaid. In some states, CHIP covers pregnant women. Each state offers CHIP coverage, and works closely with its state Medicaid program.