Medicaid Restructuring and Children with Special Health Care Needs MaryBeth Musumeci and Danielle Poindexter Medicaid and CHIP cover 44% of children with special health care needs, providing access to a broad range of medical and long-term care services that enable many to live at home with their families and making coverage affordable. This brief includes state-level data on the share of children with special health care needs covered by Medicaid and describes Medicaid’s role for these nearly five million children to help inform the debate about current proposals in Congress to reduce federal Medicaid funding under a per capita cap or block grant. Nearly ¾ of all children with special health care needs live in low or middle income families, below 400% of the federal poverty level (FPL). About one in five are below 100% FPL (<$20,420/year for a family of three in 2017), and another one in five are between 100-199% of poverty. Medicaid/CHIP children with special health care needs have significantly greater health needs compared to those with private insurance alone, with children covered by both Medicaid/CHIP and private insurance having the greatest needs. Medicaid/CHIP children with special health care needs are nearly two and one-half times as likely (24%), and those with both Medicaid/CHIP and private insurance are three times as likely (30%), to have four or more chronic conditions, compared to those with private insurance alone (10%). Medicaid/CHIP children are more than one and one-half times as likely (58%), and those with both Medicaid/CHIP and private insurance are nearly twice as likely (63%), to have four or more functional difficulties compared to those with private insurance (33%). Medicaid/CHIP cover 60% of the 2.9 million children with special health care needs whose health conditions consistently and often greatly affect their daily activities, with Medicaid/CHIP as the sole source of coverage for nearly half of these children. Medicaid/CHIP children with special health care needs have access to care on par with those with private insurance alone. For example, Medicaid/CHIP children (92% for both those with and without private insurance) are about equally as likely to have had a preventive care visit in the last year compared to those with private insurance alone (91%). Medicaid/CHIP children are significantly more likely than those with private insurance to report that their coverage is adequate to meet their needs (69% vs 64%). Medicaid/CHIP children with special health care needs are significantly more likely to report that their coverage is affordable compared to those with private insurance alone. Medicaid/CHIP children are more than five times less likely (6%), and those with Medicaid/CHIP and private insurance are half as likely (16%), to incur out-of-pocket costs of $1,000 or more, compared to those with private insurance alone (32%). Medicaid/CHIP is a safety net, covering 59% of the 2.7 million children with special health care needs whose families have had to reduce their work hours or stop working altogether due to their child’s health status, and serving as the sole source of coverage for nearly half of these children. Medicaid children with special health care needs may be particularly affected by changes currently being considered by Congress, including the shift to per capita capped federal financing. Per enrollee spending for Medicaid children who use long-term care services is over 12 times higher ($37,084) compared to those who do not ($2,836), due to these children’s greater health needs and reliance on Medicaid for expensive but necessary services that are generally unavailable through private insurance and too costly to afford out-of-pocket. Many Medicaid coverage pathways for children with disabilities, and some community-based long-term care services provided through waivers, are offered at state option, making them subject to potential cuts as states adjust to substantial federal funding reductions under a per capita cap. While the Better Care Reconciliation Act proposed in the Senate would exempt Medicaid children who are eligible based on a disability from the per capita cap, most Medicaid children with special health care needs are eligible based on their family’s low income and not based on a disability and therefore would be subject to the per capita cap. An estimated 11.2 million children, or 15% of all children in the U.S., have special health care needs, based on the most recent data available from 2009-2010. Their needs result from a range of conditions, such as Down syndrome, cerebral palsy, and autism. These children may require services such as nursing care to live safely at home, therapies to address developmental delays, and mental health counseling. This issue brief describes the role that Medicaid plays for children with special health care needs. It presents data comparing the health and functional needs, coverage adequacy and access to care, and affordability of coverage for Medicaid/CHIP children with special health care needs and those with private insurance. The Appendix includes state-level data on the distribution of children with special health care needs by household income (Table 1), the share of children with special health care needs who are covered by Medicaid (Table 2), and the share of Medicaid children with special health care needs who receive SSI (Table 3). Medicaid and CHIP cover nearly half (44%, or Figure 1 Health insurance status of children with special health care nearly five million) of children with special needs, 2009-2010. health care needs (Figure 1). Medicaid or CHIP is Medicaid/CHIP Uninsured and Private 4% the sole source of coverage for over 1/3 (36%) of these Insurance 8% children. Another 8% have Medicaid or CHIP to supplement their private coverage. Medicaid Total Medicaid/CHIP 44% provides a wide range of medical and long-term care Private Insurance Medicaid/CHIP services, many of which are not covered at all or only Only 52% 36% available in limited amounts through private Total = insurance, and makes coverage affordable for many 11.2 million children with special health care needs children with special health care needs and their NOTES: Medicaid/CHIP also includes Medicare and Medigap. CDC, Design and Operation of the National Survey of Children with Special Health Care Needs, 2009-2010, https://www.cdc.gov/nchs/data/series/sr_01/sr01_057.pdf. Omits responses reported as families. “refused,” “don’t know” or missing (<1%). Includes children ages 0-17. SOURCE: National Survey of Children with Special Health Care Needs (2009-10), http://childhealthdata.org/learn/NS-CSHCN. Medicaid Restructuring and Children with Special Health Care Needs 2 Limits and reductions in federal Medicaid financing, as currently being considered by Congress, are particularly relevant to children with special health care needs because these children use services more intensively, and often incur greater costs, than other children. Both the American Health Care Act (AHCA) as passed by the U.S. House of Representatives and the Better Care Reconciliation Act (BCRA) as proposed in the Senate fundamentally restructure Medicaid financing by changing the current guarantee of federal matching funds without a pre-set limit to a per capita cap or block grant. While the BCRA would exempt Medicaid children who are eligible based on a disability from the per capita cap, most Medicaid children with special health care needs are eligible based on their family’s low income and not based on a disability. The change in federal Medicaid financing (together with eliminating the enhanced federal matching funds for the Affordable Care Act’s Medicaid expansion) is estimated to reduce federal Medicaid funds to states by $772 billion from 2017 to 2026 under the BCRA, according to the Congressional Budget Office. Given the magnitude of these funding cuts, states are likely to look to limiting provider payment rates, the number of people covered, and the scope of benefits available, which could impact Medicaid children with special health care needs. As defined by the U.S. Department of Health and Social Services (HHS), children with special health care needs “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 arise from a range of conditions such as autism, Down syndrome, and other intellectual and developmental disabilities (I/DD); physical disabilities such as cerebral palsy, spina bifida, and muscular dystrophy; mental health needs such as depression and anxiety; and complications arising from premature birth. They may need nursing care to live safely at home with a tracheotomy or feeding tube; attendant care to develop community living skills; medical equipment and supplies; mental health counseling; and/or regular therapies to address developmental delays. They may have difficulty with bodily functions, such as breathing, swallowing, or chronic pain; difficulty with activities such as self-care, mobility, learning, or communication; and/or emotional or behavioral difficulties. Nearly three-quarters (73%) of children with special health care needs live in low or middle income families, below 400% of the federal poverty level (FPL) (Figure 2). About one in five (22%) resides in a household with income below the poverty Figure 2 level (less than $20,420/year for a family of three in Demographics of children with special health care needs, 2017). Another 22% live in a household with income 2009-2010. Household Income Race/Ethnicity Age between 100-199% of poverty ($20,420- $40,636/year for a family of three in 2017). About one in three (29%) are in a household with income Other 8% 0-5 between 200-399% of poverty ($40,840- 400% FPL or 0-99% FPL 22% Hispanic/ 12-17 years 21% above Latino $81,396/year for a family of three in 2017). Table 1 27% 17% years 41% 200- 100-199% FPL Black White contains state-level data on the distribution of 6-11 399% 22% 16% 59% years FPL 39% 29% children with special health care needs by household income. Nearly six in 10 children with special health Total = 11.2 million children with special health care needs care needs are white, and about equal shares are NOTE: Percentages may not sum due to rounding. Omits responses reported as “refused,” “don’t know” or missing (<1%). Includes children ages 0-17. SOURCE: National Survey of Children with Special Health Care Needs (2009-10), http://childhealthdata.org/learn/NS-CSHCN. Medicaid Restructuring and Children with Special Health Care Needs 3 black (16%) and Hispanic/Latino (17%). Just over 20% of children with special health care needs are age 5 or younger, with the remainder about evenly split between the 6-11 and 12-17 age groups. Medicaid/CHIP children with special health care needs have significantly greater health needs compared to those with private insurance alone, with children covered by both Medicaid/CHIP and private insurance having the greatest needs. Medicaid/CHIP children with special health care needs are nearly two and one-half times as likely (24%), and those with both Medicaid/CHIP and private insurance are three times as likely (30%), to have four or more chronic conditions, compared to those with private insurance (10%) (Figure 3). Some of the chronic conditions reported by children with special health care needs include autism, intellectual disability, asthma, depression, anxiety, attention deficient hyperactivity disorder, cerebral palsy, cystic fibrosis, muscular Figure 3 dystrophy, brain injury, heart problems, and epilepsy. Health status of children with special health care needs, by coverage status, 2009-2010. As a result of their greater health needs, Private Insurance Medicaid/CHIP Only Medicaid/CHIP and Private Insurance Uninsured Medicaid/CHIP children are twice as likely (6%), and Share of children reporting: those with both Medicaid/CHIP and private 63%* insurance are nearly four times as likely (11%), to 58% 56% have eight to 14 health care service or equipment 33%* needs in a year, compared to those who are privately 24% 30%* insured (3%) (Figure 3). These include the need for 10%* 17%* 11%* 6% preventive, specialist, or dental care; prescription 3%* 3%* medication; physical, occupational, or speech 4+ current chronic conditions 8 -14 service or equipment needs in past 12 months 4+ functional difficulties therapy; mental health counseling; mobility or NOTE: Medicaid/CHIP also includes Medicare and Medigap. * Indicates statistically significant difference from the Medicaid/CHIP population at the p < 0.05 level. SOURCE: National Survey of Children with Special Healthcare Needs (2009-10), http://www.childhealthdata.org/learn/NS-CSHCN. communication aids; home health care; and durable medical equipment, among others. Medicaid/CHIP children with special health care needs also are significantly more likely to have multiple functional limitations Figure 4 compared to those with private insurance. Functional difficulties of children with special health care Specifically, Medicaid/CHIP children are more than needs, by coverage status, 2009-2010. one and one-half times as likely (58%), and those with Private Insurance Medicaid/CHIP Only Medicaid/CHIP and Private Insurance Uninsured Share of children reporting: both Medicaid/CHIP and private insurance are nearly 74% 72% 74% 72% 75% 69% 70% 72% 69% twice as likely (63%), to have four or more functional 65%* difficulties compared to those with private insurance 50%* 48%* alone (33%) (Figure 3). Medicaid/CHIP children, including those with and without private insurance, are more likely than children with private insurance alone to have difficulty with bodily functions, such as Difficulty with one or more Difficulty with one or more Difficulty with one or more breathing, swallowing, or chronic physical pain; bodily functions NOTE: Medicaid/CHIP also includes Medicare and Medigap. activities or participation emotional or behavioral factors * Indicates statistically significant difference from the Medicaid/CHIP population at the p < 0.05 level. activities or participation, such as self-care, mobility, SOURCE: National Survey of Children with Special Healthcare Needs (2009-10), http://www.childhealthdata.org/learn/NS-CSHCN. Medicaid Restructuring and Children with Special Health Care Needs 4 learning, or communicating; and emotional or behavioral factors, such as anxiety, depression, or making friends (Figure 4). Medicaid and CHIP cover many of the children with the greatest needs, including 60% of the 2.9 million children with special health care needs whose health conditions consistently and often greatly affect their daily activities (Figure 5). Medicaid/CHIP is the sole source of coverage for nearly half (47%) of these children (Figure 5). Medicaid/CHIP children are twice as likely (36%), and those with Medicaid/CHIP and private insurance are nearly two and one-half times as likely (43%), to have health conditions that consistently and often greatly affect their daily activities, compared to those with private insurance alone (18%) (Figure 6). Figure 5 Figure 6 Insurance status of children with special health care needs whose Children with special health care needs whose health conditions health conditions consistently and often greatly affect their daily consistently and often greatly affect their daily activities, by activities, 2009-2010. coverage status, 2009-2010. Medicaid/CHIP Uninsured, 5% and Private , 13% Share of children reporting: Total Private Insurance, Medicaid/ 35% 43%* CHIP, 60% Total= 2.9 million 36% 35% Medicaid/CHIP, children with 47% special health 18%* care needs whose daily activities are consistently affected Private Insurance Medicaid/CHIP Only Medicaid/CHIP & Private Ins. Uninsured NOTE: Medicaid/CHIP also includes Medicare and Medigap. NOTE: Medicaid/CHIP also includes Medicare and Medigap. * Indicates statistically significant difference from the Medicaid/CHIP population at the p < 0.05 level. SOURCE: National Survey of Children with Special Healthcare Needs (2009-10), http://www.childhealthdata.org/learn/NS-CSHCN. SOURCE: National Survey of Children with Special Healthcare Needs (2009-10), http://www.childhealthdata.org/learn/NS-CSHCN. Despite their greater needs, Medicaid/CHIP children with special health care needs are significantly more likely than those with private insurance to report that their coverage is sufficient to meet their needs. For example, Medicaid/CHIP children with special health care Figure 7 Adequacy of insurance among children with special health needs (69%) are significantly more likely than those care needs, by coverage status, 2009-2010. with private insurance alone (64%) to report that Private Insurance Medicaid/CHIP Only Medicaid/CHIP and Private Insurance their coverage is adequate (Figure 7). Share of children reporting: 73% Medicaid/CHIP children with special health care 64%* 69% 64%* 64% 62% 70% 71% 60%* needs (64%) also are significantly more likely to report that their insurance always meets their needs, compared to those with private insurance alone (60%) (Figure 7). Comparable shares of Medicaid/CHIP children, those with Medicaid/CHIP Current insurance is adequate Current insurance always Current insurance always and private insurance, and those with private meets child's needs allows child to see needed NOTE: Medicaid/CHIP also includes Medicare and Medigap. health providers insurance alone report that their insurance allows * Indicates statistically significant difference from the Medicaid/CHIP population at the p < 0.05 level. SOURCE: National Survey of Children with Special Healthcare Needs (2009-10), http://www.childhealthdata.org/learn/NS-CSHCN. them to see all needed providers (71% vs. 73% vs. 70%) (Figure 7). Medicaid Restructuring and Children with Special Health Care Needs 5 Medicaid/CHIP children with special health care needs have access to health care services on par with those who are privately insured. Medicaid/CHIP children with special health care needs (92%), those with Medicaid/CHIP and private insurance (92%), and those with private insurance alone (91%) are about equally as likely to have had a well-child check-up in the last 12 months (Figure 8). Other access to care rates are high among all three groups. For Figure 8 example, 92% of both Medicaid/CHIP children and Access to care among children with special health care those with both Medicaid/CHIP and private needs, by coverage status, 2009-2010. insurance report having a usual source of care when Private Insurance Medicaid/CHIP Only Medicaid/CHIP and Private Insurance Share of children reporting: Uninsured sick, compared to 94% of those with private insurance 94%* 92% 92% 99%* 97% 98% 91% 92% 92% 86%* alone (Figure 8). The rates for access to a usual 85%* 70%* source of preventive care also are high among the three groups (97% for Medicaid/CHIP, 98% for Medicaid/CHIP and private insurance, 99% for private insurance alone) (Figure 8). Medicaid/CHIP children with special health care needs also Usual source of care when sick Usual source of preventive At least one preventive visit in experience significantly better access to care on these NOTE: Medicaid/CHIP also includes Medicare and Medigap. care the last 12 months * Indicates statistically significant difference from the Medicaid/CHIP population at the p < 0.05 level. measures compared with those who are uninsured SOURCE: National Survey of Children with Special Healthcare Needs (2009-10), http://www.childhealthdata.org/learn/NS-CSHCN. (Figure 8). Medicaid/CHIP children are significantly more likely to report that their coverage is affordable compared to those with private insurance. Medicaid makes coverage affordable for children with special health care needs by limiting out-of-pocket costs. Medicaid/CHIP children with special health care needs (51%), and those with Medicaid/CHIP and private insurance (45%), both are more likely to report that their out-of-pocket health care costs are reasonable compared to those with private insurance (31%) (Figure 9). Medicaid/CHIP children are more than five times less likely (6%), and those with Medicaid/CHIP and private insurance are half as likely (16%), to incur out-of-pocket costs of $1,000 or more, compared to those with private insurance alone (32%) (Figure 9). Out-of- Figure 9 pocket costs under Medicaid generally are limited to Affordability for children with special health care needs, by coverage status, 2009-2010. nominal amounts, and most children are exempt from cost-sharing, which protects families from the Private Insurance Medicaid/CHIP Only Medicaid/CHIP and Private Insurance Uninsured Share of children reporting: financial burdens often associated with special health care needs. Affordability is a particular concern for 51% 45%* families of children with special health care needs 31%* 32%* 30%* because, as discussed above, nearly three-quarters 16%* have household incomes below 400% of poverty, and 6% N/A nearly half (44%) are below 200% of poverty (Figure Out-of-pocket costs are always reasonable Families paid $1000 or more in out-of-pocket 3). For an example of how Medicaid helps make medical expenses private coverage affordable for children with special NOTE: Medicaid/CHIP also includes Medicare and Medigap. * Indicates statistically significant difference from the Medicaid/CHIP population at the p < 0.05 level. SOURCE: National Survey of Children with Special Healthcare Needs (2009-10), http://www.childhealthdata.org/learn/NS-CSHCN. health care needs, see Gabriel’s story in Box 1 below. Affordability is important because the demands of caring for children with special health care needs can impede their families’ ability to work, an outcome that is significantly more likely Medicaid Restructuring and Children with Special Health Care Needs 6 among Medicaid/CHIP children. Given Medicaid/CHIP children’s greater health care needs and functional limitations compared to those with private coverage (Figures 3-6), it is not surprising that Medicaid and CHIP cover 59% of the 2.7 million children with special health care needs whose families have had to reduce their work hours or stop working altogether due to their child’s health status (Figure 10). Medicaid/CHIP is the sole source of coverage for just under half (46%) of these children (Figure 10). Medicaid/CHIP children with special health care needs are more than one and one-half times as likely (32%), and those with Medicaid/CHIP and private insurance are over twice as likely (39%), to live in families who had to cut back on outside employment due to their child’s health needs, compared to those with private insurance alone (17%) (Figure 11). Figure 10 Insurance status of children with special health care needs whose health status caused family members to reduce work hours or stop working, 2009-2010. Medicaid/CHIP Uninsured, 5% and Private Insurance, 13% Total Medicaid/ Private Insurance, CHIP, 59% 36% Medicaid/CHIP Total= 2.7 million Only, 46% children with special health care needs whose family members had to reduce work hours NOTE: Medicaid/CHIP also includes Medicare and Medigap. SOURCE: National Survey of Children with Special Healthcare Needs (2009-10), http://www.childhealthdata.org/learn/NS-CSHCN. Some children with special health care needs qualify for Medicaid based solely on their family’s low income. Under the Affordable Care Act, as of Figure 12 2014, states must cover all children in families with Medicaid eligibility pathways for children with special health care needs. incomes up to 138% of the federal poverty level (FPL, Financial eligibility level as a percent of 2017 annual federal poverty level (FPL): $28,180/year for a family of three in 2017) (Figure Federal Minimum State Option 12); although some of these children have special 300% health care needs, their Medicaid eligibility is based $61,260 219% entirely on their family’s low income, without regard 138% $26,460 to their health status.1 States can expand financial $28,180 73% $8,820 eligibility for children above 138% FPL, and all do: as of January, 2017, the median financial eligibility level Family Income Child Disability Buy-In SSI Beneficiary Child's Own Income for Medicaid and CHIP children nationally is 255% and Disability FPL ($52,071/year for a family of three in 2017). FPL for Family of 3 FPL for Individual SOURCE: Kaiser Family Foundation analysis of Medicaid eligibility pathways. Medicaid Restructuring and Children with Special Health Care Needs 7 Gabriel was born prematurely at 27 weeks and spent a little over his first year of life in the hospital. When he was ready for discharge, his parents were told that he would have to go to a nursing home because the services that he needed to be safely cared for at home were not offered by his private insurance through his father’s job as a tugboat pilot. Medicaid covers these services, and because Gabriel qualified based on the extent of his health care needs, he was able to come home. Although Gabriel has significant developmental delays and chronic lung diseases, his mother, Jessica, says he is “thriving at home.” Jessica attributes Gabriel’s progress to the Medicaid services he receives to care for his tracheotomy and gastrostomy tube and monitor his oxygen supply and ventilator. Gabriel requires close attention because he can decompensate quickly, and Jessica credits his Medicaid home nursing services with helping him stay as healthy as possible – he has only been hospitalized for illness once since his discharge. He plays outside with the support of his direct care workers, and Medicaid provided a generator that enabled him to remain at home during recent flooding and power outages instead of going to a shelter or hospital. Jessica says the private insurance copayments for all of Gabriel’s care would be “outrageous” without Medicaid. Medicaid helps with medical supplies, prescriptions, visits with seven specialists and a pediatrician, and eight outpatient occupational and speech therapy sessions per month. Medicaid also supplements Gabriel’s special education services, which, for example, do not address feeding issues. Jessica studied social work in college and says she was used to helping connect others with resources but never thought that she would be “on the other end of needing support” herself. She believes that Medicaid helps Gabriel to “reach his maximum potential” and maintain his quality of life. Other children with special health care needs qualify for Medicaid through a disability-related pathway. States must provide Medicaid to children who receive federal Supplemental Security Income (SSI) benefits; these children live in poor families and have Figure 13 disabilities that result in marked and severe State adoption of optional Medicaid eligibility pathways for children with significant disabilities, 2015. limitations in their ability to function at home, at WA VT ME school, and in the community (Figure 12). MT ND MN NH OR WI NY MA ID SD MI WY PA CT RI IA NJ Nearly all states choose to expand Medicaid NE OH DE NV IL IN MD UT CO WV VA KS MO KY DC financial eligibility for children with special CA NC CA TN* OK AR SC AZ NM health care needs at higher incomes through AK MS AL GA TX LA optional disability-related pathways (Figures FL 12 and 13). As of 2015, 50 states opt to cover HI NOTES: *TN covers “medically eligible” children in children with significant disabilities living at home Katie Beckett state plan option only (11 states) households with income below 200% FPL; enrollment in this pathway is closed except for HCBS waiver comparable to Katie Beckett only (27 states, including DC) rollovers from traditional groups. SOURCE: KCMU Both Katie Beckett state plan option and comparable waiver (7 states) under the “Katie Beckett” pathway; this pathway Medicaid Financial Eligibility Survey for Seniors and People with Disabilities (2015), supplemented with Both Katie Beckett comparable waiver and Family Opportunity Act buy-in (5 states) states’ HCBS waivers targeted to comparable populations available on CMS Medicaid.gov. Medicaid Restructuring and Children with Special Health Care Needs 8 disregards parental income and assets, just as they are for children with disabilities living in an institution, which makes it possible for children with disabilities to receive necessary care while remaining at home with their families. The child’s own income, up to 219% FPL ($26,460/year for an individual in 2017), and assets (generally limited to $2,000) are counted. Katie Beckett children also must meet SSI medical disability criteria and otherwise qualify for an institutional level of care according to functional eligibility criteria set by the state. Some states cover Katie Beckett children as an optional state plan group, while other states use a Medicaid home and community-based services (HCBS) waiver; using a waiver allows states to cap enrollment, which is not permitted under state plan authority. States also can allow children with special health care needs in middle income families to “buy in” to Medicaid. As of 2015, five states elect the Family Opportunity Act (FOA) option, a Medicaid buy-in for children with significant disabilities in families with income up to 300% FPL ($61,260/year for a family of three in 2017) (Figures 12 and 13). FOA children must meet SSI medical disability criteria, and states may charge them premiums up to 5% of gross countable family income. As reflected by different state policy choices Figure 14 about optional eligibility expansions for Share of children with special health care needs covered by Medicaid/CHIP, 2009-2010. children with special health care needs, the share of children with special health care WA VT ME MT ND NH MN needs covered by Medicaid/CHIP varies by OR WI NY MA ID SD MI WY CT RI PA NJ state (Figure 14). Twenty-six states (26) provide IA NE OH DE NV IL IN MD UT WV VA CO Medicaid/CHIP to between 35% and 49% of the KS MO KY DC CA NC TN OK AR SC children with special health care needs living in their AZ NM MS AL GA LA state. Another 16 states provide Medicaid/CHIP to TX FL AK between one-half and two-thirds of all children with HI 20-34% (9 states) 35-49% (26 states) special health care needs. For most of these children, U.S. = 44% 50-67% (16 states) Medicaid/CHIP is their sole source of coverage, while NOTE: Medicaid/CHIP also includes Medicare and Medigap. Includes children with special health care needs with Medicaid/CHIP only and Medicaid/CHIP and private insurance. SOURCE: National Survey of Children with Special Healthcare Needs (2009-10), http://www.childhealthdata.org/learn/NS-CSHCN. a smaller share have both Medicaid/CHIP and private insurance (Figure 1 and Table 2). Few children with special health care needs Figure 15 (18%) qualify for Medicaid because they Medicaid/CHIP children with special health care needs by SSI status, 2009-2010. receive SSI benefits (Figure 15 and Table 3). Most Medicaid children with special health care needs (82%) do not receive SSI and instead qualify Does not receive SSI for Medicaid on another basis, such as a disability- 82% Receives SSI related pathway other than SSI (such as Katie 18% Beckett or an HCBS waiver) or a poverty-related pathway based on their family’s low income, as Total Medicaid/CHIP children with special health care needs = described above; most of these children are eligible 4.7 million based on low family income, according to other NOTES: SSI = Supplemental Security Income. Medicaid/CHIP children who do not receive SSI include those who are eligible through another disability-related pathway (such as Katie Beckett/TEFRA or an HCBS waiver) and those who are eligible based on low family analyses.3 Some Medicaid children with special income; according to other analyses, most of this group are eligible based on low family income. Only those eligible through disability-related pathways are exempt from the BCRA per capita cap. SOURCE: Kaiser Family Foundation analysis based on published data from the 2009/10 National Survey of Children with Special Health Care Needs. health care needs could qualify in a disability-related Medicaid Restructuring and Children with Special Health Care Needs 9 pathway but are instead enrolled through a poverty-related pathway because it is administratively easier and faster to establish eligibility based on low family income than based on disability. Other Medicaid children with special health care needs still use health services to a greater extent than other children as a result of their health conditions, even though their health needs do not rise to the stringent level of disability required to receive SSI or qualify for an institutional level of care. Under the BCRA, only Medicaid children who are eligible through a disability-related pathway would be exempt from the per capita cap on federal program financing. Medicaid children with special health care needs who are not enrolled through a disability-related pathway would be included in the per capita cap. Medicaid covers a wide range of medical and long-term care services for children with special health care needs. Medicaid’s Early and Periodic Screening Diagnostic and Treatment (EPSDT) benefit includes regular medical, vision, hearing, and dental screenings as well as the services necessary to “correct or ameliorate” physical or mental health conditions. These services must be provided for children, regardless of whether a state chooses to cover them for adults. Medicaid’s benefit package for children covers traditional medical services like doctor visits, hospitalizations, x-rays, lab tests, and prescription drugs. It also includes behavioral health, dental, hearing, and vision care as well as physical, occupational, and speech therapy and medical equipment and supplies. Some children may receive therapy through special education at school, and Medicaid supplements those services by covering additional therapies that are necessary for a child to function outside of school, at home and in the community. For children with chronic needs, Medicaid covers long-term care services, such as private duty nursing, attendant care, and assistive technology, that help children with special health care needs remain at home with their families. It also offers case management through which a social worker coordinates medical, social, and other services for children with multiple needs. Medicaid fills in coverage gaps for privately insured children with special health care needs. Private insurance typically is designed to meet the needs of a generally healthy population rather than people with more intensive or chronic needs. As a result, private insurance usually does not cover long-term care services and may offer limited coverage of other services important to children with special health care needs. For example, privately insured children may experience unmet needs for dental care, mental health services, or physical, occupational, or speech therapy. Some privately insured children with special health care needs access Medicaid for wrap-around coverage for the medically necessary services on which they and their families depend to keep them healthy and safe at home and in the community (Figure 1 and Table 2). For an example, see Sam’s story in Box 2 below. Medicaid Restructuring and Children with Special Health Care Needs 10 Sam was born with Fragile X syndrome, a genetic condition that causes intellectual disability. He also has mild autism. Sam’s mother, Robin, noticed that he was not reaching his developmental milestones around age one. He has difficulty communicating and learning skills such as how to brush his teeth and dress himself. Sam’s private insurance does not cover all of the specialists and services, such as physical, occupational, and speech therapy, that he needs. Medicaid fills these gaps and supplements his private insurance by covering those services. Robin says that the services Sam receives through Medicaid are helping him to learn the skills he needs to “be part of society and with his peers.” Medicaid children who use long-term care services are likely to have special health care needs. Medicaid spending data do not separately distinguish children with special health care needs but do identify children who use long-term care services. Medicaid long-term care services include institutional care, such as nursing facilities, intermediate care facilities for people with I/DD, and intermediate care facilities for children with mental health needs (ICF/IMDs), and Figure 16 community-based services, such as home health, Medicaid spending per child enrollee, FY 2013. personal care, and home and community-based waiver services. As of 2013, nearly 400,000 child Medicaid beneficiaries used long-term care services (Figure 16). $37,084 Annual per enrollee spending is over 12 times higher for Medicaid children who use long- term care services ($37,084) compared to those $2,863 Used Long-Term Care No Long-Term Care Use who do not ($2,863) as of 2013 (Figure 16). This Number of Enrollees: 399,000 35.4 million reflects the greater intensity and variety of needs NOTES: Includes children under age 21 eligible through poverty-related pathways and children under age 18 eligible through disability-related pathways. Includes fee-for-service spending for institutional services (nursing facilities, ICF/IDD, ICF/IMD) and HCBS (home health, personal care, and home and community-based waiver services). among children who use long-term care services as SOURCE: KFF estimates based on analysis of data from the FFY 2014 MSIS and Urban Institute estimates from CMS-64 reports. Because 2013 data was unavailable, 2011 data were used for CO and 2012 data were used RI, both having been adjusted to 2013 spending. compared to children who rely on Medicaid for only acute and preventive care services. Capping and reducing federal Medicaid funding as provided in the AHCA and BCRA may pose a particular risk to children with special health care needs and their providers. While the BCRA would exempt Medicaid children who are eligible based on a disability from the per capita cap, most Medicaid children with special health care needs are eligible based on their family’s low income and not based on a disability. Medicaid Restructuring and Children with Special Health Care Needs 11 Children with special health care needs rely on Medicaid for its broad scope of medical and long-term care benefits that are typically not covered by private insurance. These services keep children with intensive and chronic needs living at home with their families. In addition to filling gaps in private insurance and making coverage affordable, Medicaid is the sole source of coverage for many children with special health care needs in low and middle income families. Medicaid children with special health care needs have greater health needs and functional limitations, comparable coverage adequacy and access to care, and greater affordability compared to those with private insurance alone. Children who use Medicaid long-term care services have higher annual per enrollee spending than other Medicaid children. Consequently, policies that lead states to limit per enrollee spending or limit costly optional coverage groups could disproportionately affect these children by limiting their access to expensive but necessary services that are unavailable through private insurance. While nearly all medically necessary Medicaid services for children are mandatory under the EPSDT benefit, states can provide – and may look to scale back – some optional home and community-base long-term care services offered through Section 1915 (c) waivers. Additionally, many Medicaid eligibility pathways for children with disabilities are optional. All states but one currently choose to expand coverage for these children, but optional eligibility pathways are potentially at risk as states adjust to reduced federal funding. If optional eligibility pathways are not eliminated, budgetary pressures could lead states to scale back provider payments, and/or the limited services offered to children through optional waivers, with impacts on these children’s access to care and coverage that are less visible than a reduction in eligibility pathways. Finally, Medicaid is an important source of revenue for children’s health care providers, particularly children’s hospitals. Reductions to Medicaid payment rates, especially for children’s specialty services, or reductions in optional children’s coverage pathways could impact those providers’ revenue streams. Because current proposals to restructure the Medicaid program could have significant consequences for enrollees and the health care system, the potential implications warrant careful consideration for their impact on children with special health care needs. Medicaid Restructuring and Children with Special Health Care Needs 12 Table 1: Distribution of Children with Special Health Care Needs by Household Income, 2009-2010. Table 2: Share of Children with Special Health Care Needs Covered by Medicaid/CHIP, 2009-2010. Table 3: Medicaid/CHIP Children with Special Health Care Needs by SSI Status, 2009-2010. Alabama 200,367 32% 22% 26% 19% Alaska 19,916 16% 25% 39% 19% Arizona 241,067 23% 21% 29% 24% Arkansas 139,580 36% 25% 25% 12% California 997,157 17% 16% 30% 37% Colorado 167,524 17% 13% 38% 31% Connecticut 139,453 15% 15% 25% 44% Delaware 36,143 13% 26% 30% 31% DC 18,819 35% 17% 18% 28% Florida 606,215 23% 27% 29% 21% Georgia 411,526 24% 23% 25% 26% Hawaii 35,022 15% 23% 37% 25% Idaho 53,280 23% 28% 32% 16% Illinois 452,574 20% 19% 29% 30% Indiana 268,717 24% 19% 35% 21% Iowa 105,815 22% 24% 32% 21% Kansas 120,822 18% 23% 34% 24% Kentucky 197,916 34% 25% 25% 16% Louisiana 207,840 28% 23% 28% 20% Maine 53,122 27% 29% 26% 18% Maryland 211,442 14% 16% 28% 42% Massachusetts 261,475 14% 16% 28% 42% Michigan 430,222 26% 24% 25% 23% Minnesota 179,162 17% 17% 34% 31% Mississippi 124,905 40% 24% 21% 14% Missouri 252,734 23% 27% 28% 20% Montana 30,571 23% 30% 31% 16% Nebraska 61,071 16% 24% 34% 25% Nevada 82,108 15% 25% 37% 22% New Hampshire 54,569 11% 21% 33% 34% New Jersey 294,346 15% 14% 29% 42% New Mexico 70,725 30% 27% 26% 18% New York 660,565 24% 19% 25% 32% North Carolina 389,439 23% 28% 25% 24% North Dakota 19,748 15% 24% 37% 23% Ohio 483,467 28% 24% 26% 21% Oklahoma 161,799 24% 26% 29% 19% Oregon 119,187 19% 23% 33% 25% Pennsylvania 469,906 21% 21% 30% 28% Rhode Island 39,170 24% 19% 31% 25% South Carolina 177,157 27% 26% 26% 19% South Dakota 24,415 24% 30% 32% 14% Medicaid Restructuring and Children with Special Health Care Needs 13 Tennessee 255,692 30% 25% 23% 21% Texas 919,876 22% 24% 25% 29% Utah 112,278 13% 26% 37% 23% Vermont 21,790 18% 23% 37% 21% Virginia 296,668 19% 18% 28% 33% Washington 235,920 18% 21% 31% 29% West Virginia 70,609 32% 25% 28% 14% Wisconsin 201,529 18% 22% 32% 26% Wyoming 18,194 12% 29% 33% 24% 11,203,616 22% 22% 29% 27% NOTES: Totals may not sum due to rounding. 100% FPL for a family of 3 in 2017 = $20,420/year. Medicaid/CHIP also includes Medicare and Medigap. SOURCE: National Survey of Children with Special Healthcare Needs (2009-10). Medicaid Restructuring and Children with Special Health Care Needs 14 Alabama 200,367 45% 6% Alaska 19,916 25% 14% Arizona 241,067 33% 9% Arkansas 139,580 56% 9% California 997,157 27% 8% Colorado 167,524 24% 5% Connecticut 139,453 27% 7% Delaware 36,143 35% 7% DC 18,819 47% 12% Florida 606,215 41% 5% Georgia 411,526 37% 6% Hawaii 35,022 23% 4% Idaho 53,280 36% 10% Illinois 452,574 36% 8% Indiana 268,717 34% 9% Iowa 105,815 33% 9% Kansas 120,822 24% 6% Kentucky 197,916 45% 7% Louisiana 207,840 48% 8% Maine 53,122 49% 10% Maryland 211,442 26% 5% Massachusetts 261,475 24% 11% Michigan 430,222 39% 7% Minnesota 179,162 26% 7% Mississippi 124,905 52% 8% Missouri 252,734 38% 4% Montana 30,571 36% 5% Nebraska 61,071 28% 6% Nevada 82,108 27% 5% New Hampshire 54,569 31% 7% New Jersey 294,346 23% 5% New Mexico 70,725 43% 12% New York 660,565 34% 9% North Carolina 389,439 43% 5% North Dakota 19,748 21% 12% Ohio 483,467 35% 11% Oklahoma 161,799 42% 8% Oregon 119,187 29% 6% Pennsylvania 469,906 35% 18% Rhode Island 39,170 33% 12% South Carolina 177,157 41% 8% South Dakota 24,415 37% 11% Medicaid Restructuring and Children with Special Health Care Needs 15 Tennessee 255,692 41% 10% Texas 919,876 35% 6% Utah 112,278 14% 6% Vermont 21,790 47% 11% Virginia 296,668 24% 5% Washington 235,920 30% 8% West Virginia 70,609 47% 9% Wisconsin 201,529 30% 12% Wyoming 18,194 35% 7% 11,203,616 NOTE: Medicaid/CHIP also includes Medicare and Medigap. SOURCE: National Survey of Children with Special Healthcare Needs (2009- 10). Medicaid Restructuring and Children with Special Health Care Needs 16 Alabama 102,630 19% 81% Alaska 7,708 8% 92% Arizona 102,127 17% 83% Arkansas 90,428 30% 70% California 348,461 18% 82% Colorado 48,673 12% 88% Connecticut 46,353 14% 87% Delaware 15,291 13% 87% DC 10,974 22% 78% Florida 275,726 20% 80% Georgia 175,744 18% 82% Hawaii 9,325 11% 89% Idaho 24,811 19% 81% Illinois 195,785 17% 83% Indiana 113,576 22% 78% Iowa 44,160 14% 86% Kansas 36,222 15% 85% Kentucky 101,350 27% 73% Louisiana 116,360 17% 83% Maine 31,161 12% 88% Maryland 65,537 * * Massachusetts 90,137 12% 88% Michigan 198,266 14% 86% Minnesota 58,084 11% 89% Mississippi 74,998 21% 79% Missouri 106,676 20% 80% Montana 12,647 18% 82% Nebraska 20,454 18% 89% Nevada 26,536 * * New Hampshire 20,534 10% 90% New Jersey 81,067 16% 84% New Mexico 39,196 17% 83% New York 282,675 20% 80% North Carolina 189,666 18% 82% North Dakota 6,512 13% 87% Ohio 222,117 20% 80% Oklahoma 80,877 12% 88% Oregon 42,259 21% 79% Pennsylvania 250,033 19% 81% Rhode Island 17,521 15% 85% South Carolina 87,409 19% 81% South Dakota 11,707 * * Tennessee 130,388 14% 86% Texas 373,041 23% 77% Utah 22,447 15% 85% Vermont 12,727 10% 90% Virginia 87,246 26% 74% Washington 89,744 17% 83% West Virginia 39,422 17% 83% Wisconsin 84,559 19% 81% Wyoming 7,716 * * Medicaid Restructuring and Children with Special Health Care Needs 17 NOTES: *Data not reported because estimates based on sample sizes too small to meet standards for reliability or precision (relative standard error > 30%). Omitted states are included in U.S. total. Medicaid/CHIP also includes Medicare and Medigap. SSI = Supplemental Security Income. Medicaid/CHIP children who do not receive SSI include those who are eligible through another disability- related pathway (such as Katie Beckett/TEFRA or an HCBS waiver) and those who are eligible based on low family income; according to other analyses, most of this group are eligible based on low family income. Percentages may not sum due to rounding. SOURCE: National Survey of Children with Special Healthcare Needs (2009-10). 1 It may not be possible to easily identify all of these children in the Medicaid administrative data, based on their service use. 2This share is based on data from the National Survey of Children with Special Health Care Needs which does not identify whether children are eligible for Medicaid in a poverty-related pathway vs. a disability-related pathway, and may be a conservative estimate of the total number of children with SSI. The Social Security Administration reports about 1.2 million child SSI beneficiaries in 2009 and 2010. These two sources report differ numbers due to differences in underlying data collection methods, but the difference does not change the overall conclusion that most Medicaid children with special health care needs do not qualify through a disability-related pathway. 3For example, MSIS data show 34.8 million Medicaid children eligible based on low family income as of 2014, and 1.6 million Medicaid children eligible based on a disability (including SSI, Katie Beckett, HCBS waivers, and other disability-related pathways) as of 2011. The Henry J. 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