This report analyzes the provisions of the Deficit Reduction Act of 2005 (DRA) and assesses their implications for the provision of early childhood preventive and developmental services in Medicaid. The DRA may have significant effects, given the high proportion of young children enrolled in Medicaid--28 percent of all children under age 6 in 2001--and the broad range of services covered. The law imposes citizenship documentation requirements on applicants and recipients, including children. It gives states broad powers to restructure coverage through the use of a "benchmark" option but also retains Early and Periodic Screening, Diagnostic, and Treatment services as the coverage standard for children under age 19. The law gives states greater authority to impose cost-sharing for Medicaid-covered benefits and services. Finally, it redefines the federal role in financing targeted case management services, which have assumed a central role in child development programs for vulnerable children and families.
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