An estimated 13.3 million children, or 18% of all children in the U.S., have special health care needs. According to the U.S. Department of Health and Social Services, these children "have or are at increased risk for chronic physical, developmental, behavioral, or emotional conditions and also require health and related services of a type or amount beyond that required by children generally." Their needs result from a range of conditions, such as Down syndrome, cerebral palsy, and autism. They may require services such as nursing care to live safely at home, therapies to address developmental delays, and mental health counseling. Medicaid and CHIP covered about half (47%) of children with special health care needs in 2017 (Figure 1). Medicaid provides a wide range of medical and long-term services and supports (LTSS), many of which are not covered at all or only available in limited amounts through private insurance. Medicaid also makes coverage affordable for many children with special health care needs and their families. Proposals that would reduce and cap federal Medicaid funding may pose a particular risk to children with special health care needs. Although efforts to repeal and replace the Affordable Care Act (ACA) and cap federal Medicaid funding through a block grant or per capita cap were narrowly defeated in Congress in 2017, some states, such as Utah and Tennessee, recently passed legislation to seek capped federal Medicaid funding through a Section 1115 waiver. While all of these state proposals may not include children with special health care needs, Tennessee's legislation does include this population. The Centers for Medicare and Medicaid Services reportedly is considering issuing guidance to states on Section 1115 waivers that would cap federal Medicaid financing. A program-wide federal financing cap also is proposed in President Trump's FY 2020 budget. Depending on how they are structured, these policies could have consequences on Medicaid coverage, services, and access to care for children with special health care needs. This issue brief describes the role that Medicaid plays for children with special health care needs. It explains common eligibility pathways, covered services, and program spending for these children. The Appendix includes 50-state data on the number of children with special health care needs covered by Medicaid/CHIP. A companion brief compares key characteristics of Medicaid/CHIP children with special health care needs to those covered by private insurance.
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