Katie Beckett Waiver: Medicaid and Children with Disabilities

August 19, 2018 / Author: Kevin Botros

Katie Beckett Waiver – What Is It?

In Tennessee, children with disabilities who require an institutional level of care, and who could be safely taken care of at home by their family with assistance, do not qualify for Medicaid if their parent’s income is over the limit set by the state. Medicaid will cover the care for these same children if they are institutionalized. In fact, families cannot keep their children at home, even if it can be proven to be a safe and cost-effective alternative to an institution.

Unfortunately, Tennessee is the only state that has not adopted any programs, such as the Katie Beckett Waiver or the Tax Equity and Fiscal Responsibility Act (TEFRA) program, that could help enroll children with severe disabilities in Medicaid and provide them the opportunity to receive home care, regardless of their family’s income. Rather, Tennessee’s Medicaid program (“TennCare”) has financial criteria that deem a lot of children with severe disabilities to be ineligible for Medicaid because of their household income. The state is forcing families to face financial ruin to care for children at home or institutionalize them so that Medicaid pays for the care, often at a higher cost.

The Katie Beckett Waiver would provide health insurance to children and adolescents with disabilities who don’t currently qualify for Medicaid because of their parent’s income. The Katie Beckett Waiver would allow states to give Medicaid to children with disabilities as a way of preventing their placement in an institution, even if their parents earn too much for them to qualify. Similarly, the TEFRA program provides Medicaid coverage to children with severe disabilities younger than 19 who require an institutional level of care, without using their family income as an eligibility criterion. The TEFRA program would benefit children who receive extended care in an institution and would make the eligibility determination based solely on the child’s income.

Here is how every state except Tennessee has implemented pathways to coverage:

  • 49 states and D.C. opt to cover children with significant disabilities living at home under the “Katie Beckett” pathway.
    • Tennessee only covers “medically eligible” children in households with income below 200% Federal Poverty Level (FPL). Enrollment in this pathway is closed except for rollovers from traditional groups.
  • 27 states, including D.C., have the Medicaid Home and Community Based Services (HCBS) waiver which is comparable to the Katie Beckett Waiver.
  • 11 states only have the Katie Beckett state plan option.
  • 7 States have both the Katie Beckett state plan option and a comparable waiver.
  •   5 States have both the Katie Beckett comparable waiver and the Family Opportunity Act buy-in.
    • The Family Opportunity Act (FOA) option is a Medicaid buy-in for children with significant disabilities in families with income up to 300% FPL. FOA children must meet SSI medical disability criteria, and states may charge them premiums up to 5% of gross countable family income.

Less than one in five (19%) children with disabilities covered by Medicaid also receives Supplemental Security Insurance (SSI) benefits. Most Medicaid children with special health care needs (81%) do not receive SSI, indicating that they instead qualify for Medicaid on another basis, such as the family’s low income.

Tennessee should implement the Katie Beckett Waiver or the TERFA program for two obvious reasons. First, it is essential that the state considers the environment as a critical aspect of a child’s health. Living at home with mom and dad could be tremendously beneficial for any child’s health, while living away from home could result in discomfort, nostalgia, and even depression. Second, children should not be penalized because of the financial circumstances of their family. Most parents’ whose income exceeds Medicaid thresholds still cannot afford the expensive care that children with special healthcare needs require and that commercial insurance policies don’t cover.  Families should not be forced into bankruptcy to care for their children at home.  Children with special healthcare needs are bound to live with hardships that they did not choose. The least we could do is give these children the choice to live at home with their families and receive proper care.