Child Welfare: Health Care Needs of Children
in Foster Care and Related Federal Issues

Evelyne P. Baumrucker
Analyst in Health Care Financing
Adrienne L. Fernandes-Alcantara
Specialist in Social Policy
Emilie Stoltzfus
Specialist in Social Policy
Bernadette Fernandez
Specialist in Health Care Financing
July 24, 2012
The House Ways and Means Committee is making available this version of this Congressional Research Service
(CRS) report, with the cover date shown, for inclusion in its 2012 Green Book website. CRS works exclusively
for the United States Congress, providing policy and legal analysis to Committees and Members of both the
House and Senate, regardless of party affiliation.

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Child Welfare: Health Care Needs of Children in Foster Care and Related Federal Issues

Summary
Approximately 662,000 children spend some time in foster care each year. Most enter care
because they have experienced neglect or abuse by their parents. Between 35% and 60% of
children entering foster care have at least one chronic or acute physical health condition that
needs treatment. As many as one-half to three-fourths show behavioral or social competency
problems that may warrant mental health services. Many health and mental health needs persist. A
national survey of children adopted from foster care found that 54% had special health care needs
and research on youth who aged out of foster care shows these young adults are more likely than
their peers to report having a health condition that limits their daily activities and to participate in
psychological and substance abuse counseling.
The Social Security Act addresses some of the health care needs of children in, or formerly in,
foster care through provisions in the titles pertaining to child welfare (Titles IV-B and IV-E) and
to the Medicaid program (Title XIX). Under child welfare law, state child welfare agencies are
required to have a written plan for each child in foster care that includes, among other items, the
child’s regularly reviewed and updated health-related records. In addition, state child welfare
agencies, in cooperation with state Medicaid agencies, must develop a strategy that addresses the
health care needs of each child in foster care. Upon aging out of foster care, youth must receive
from the state child welfare agency a copy of their health record and information about health
insurance options and designating other individuals to make health care decisions on their behalf
if they are unable to do so on their own.
States are not permitted to use federal child welfare program funds to pay medical expenses of
children in care or those who left foster care due to their age or placement in a new permanent
family. However, states can (and do) receive reimbursement through Medicaid to pay a part of the
medical expenses, including well-child visits and other benefits, for many of these children and
youth. Most children in foster care are eligible for Medicaid under mandatory eligibility
pathways, meaning that states must provide coverage because these children meet low-income
and other eligibility criteria. Children in foster care who are not eligible under mandatory
pathways generally qualify for Medicaid because the state has implemented one or more optional
eligibility categories allowing coverage. Further, some children who leave foster care for legal
guardianship remain eligible for Medicaid on a mandatory basis, as do most children with state-
defined “special needs” who leave foster care for adoption. The income and resources of the
child’s guardian or adoptive parent are not considered under this eligibility pathway. Separately,
youth who age out of foster care may be eligible for Medicaid through one of the mandatory
eligibility pathways that are available to adults generally. States also have the option of providing
Medicaid to youth up to the age of 21 if they aged out of foster care. However, the Patient Protection
and Affordable Care Act (ACA, P.L. 111-148, as amended and largely upheld by the U.S. Supreme
Court in National Federation of Independent Business v. Sebelius) requires all states (as of January
1, 2014) to provide Medicaid to young people under the age of 26 who aged out of foster care. Unlike
most other Medicaid pathways, coverage must be provided without regard to the youths’ income and
assets. This new pathway parallels another ACA requirement that directs health insurance companies
to continue coverage of children up to age 26 who are enrolled in their parents’ health care plans.
ACA made additional changes to assist adults in obtaining private health insurance, and young
adults leaving foster care may benefit from these changes. ACA may also include new
opportunities for providing health insurance to child welfare-involved children and their families,
such as those children in foster care who are vulnerable to losing Medicaid upon returning home.
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Child Welfare: Health Care Needs of Children in Foster Care and Related Federal Issues


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Child Welfare: Health Care Needs of Children in Foster Care and Related Federal Issues

Contents
Introduction...................................................................................................................................... 1
Major Findings................................................................................................................................. 2
Children in, or Formerly in, Foster Care.......................................................................................... 4
Health Care Needs..................................................................................................................... 5
Child Welfare Programs: Overview................................................................................................. 6
Child Welfare Policy: Health Needs of Children in, or Leaving, Foster Care........................... 7
Health Care Records............................................................................................................ 7
Health Care Oversight and Coordination Planning............................................................. 8
Health Care Power of Attorney ......................................................................................... 10
Medicaid Program: Overview of Benefits and Eligibility ............................................................. 11
Medicaid Benefits for Children in, or Formerly in, Foster Care.................................................... 13
Medicaid Eligibility for Children and Families with Current or Past Child Welfare
Involvement ................................................................................................................................ 16
Children in Foster Care ........................................................................................................... 17
Mandatory Pathways ......................................................................................................... 17
Optional Pathways............................................................................................................. 18
Medicaid Eligibility in Practice......................................................................................... 19
Young Adults Who Were Formerly in Foster Care.................................................................. 20
Mandatory Pathways ......................................................................................................... 20
Mandatory Pathway Effective in 2014.............................................................................. 20
Optional Pathway .............................................................................................................. 21
Medicaid Eligibility in Practice......................................................................................... 22
Children Who Leave Foster Care for Adoption or Guardianship............................................ 22
Mandatory Pathway........................................................................................................... 22
Optional Pathways............................................................................................................. 24
Interstate Application ........................................................................................................ 25
Possible Coverage for Child Welfare-Involved Families ........................................................ 25
Children and Families Served in the Home....................................................................... 25
Families of Children Entering Foster Care........................................................................ 26
Private Health Insurance Reforms Affecting the Child Welfare Population.................................. 27
Selected Private Health Insurance Reforms under ACA ......................................................... 28
“Immediate” Health Insurance Reforms and Programs .................................................... 28
Health Insurance Reforms and Programs Effective in 2014 ............................................. 30
Issues and Challenges .................................................................................................................... 31
Cross-Agency Collaboration ................................................................................................... 31
Communicating Across Programs ........................................................................................... 33
Disruptions in Medicaid Coverage for Children in Foster Care and Leaving Care ................ 34
Implementation of the New Pathway for Young Adults Formerly in Foster Care................... 35
Varying Income Counting Rules Across Medicaid Eligibility Pathways ................................ 36
Balancing State Fiscal Constraints .......................................................................................... 37
Accessing Private Health Insurance ........................................................................................ 37

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Child Welfare: Health Care Needs of Children in Foster Care and Related Federal Issues

Tables
Table A-1. Comparisons of Select Outcomes Between Young Adults in the Midwest
Study and Young Adults in the Add Health Study...................................................................... 43
Table A-2. Presence of Certain Health and Mental Health Conditions Among All
Children, All Adopted Children, and Children Adopted from Foster Care ................................ 46
Table B-1. Major Mandatory and Optional Medicaid Pathways
for Current and Former Foster Children and Youth.................................................................... 48

Appendixes
Appendix A. Research on the Health Needs of Current and Former Foster Children and
Youth........................................................................................................................................... 39
Appendix B. Medicaid Pathways for Current and Former Foster Children and Youth ................. 48


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Child Welfare: Health Care Needs of Children in Foster Care and Related Federal Issues

Introduction
Children who are placed in foster care are at a higher risk of having a medical, social, or
behavioral disability than children in the general population. The abuse or neglect most
experience before entering foster care can create physical and mental health issues, and the
trauma of being removed from their parents may also incline children in foster care to social or
behavioral health concerns.1 The Social Security Act addresses some of the health care needs of
children in foster care—through provisions in titles pertaining to child welfare (Titles IV-B and
IV-E) and those in the title pertaining to the Medicaid program (Title XIX). Federal child welfare
policy expects state child welfare agencies to maintain health care records of children in foster
care and to develop a strategy that addresses the health care needs of each child. States must
provide Medicaid coverage to children who are eligible for the Title IV-E federal foster care
program or, if applicable, eligible through other Medicaid eligibility pathways.
Beginning on January 1, 2014, the Patient Protection and Affordable Care Act (ACA, P.L. 111-
148, as amended) creates a new mandatory Medicaid pathway, for young adults up to age 26 if
they were in foster care at age 18. This new mandatory coverage category for youth aging out of
foster care is distinct from the ACA expansion requirements in Section 2001 of ACA that are
related to coverage for most childless, non-pregnant and non-elderly adults who were previously
ineligible for Medicaid and have incomes below 133% of the federal poverty level.2 The U.S.
Supreme Court held in National Federation of Independent Business (NFIB) v. Sebelius3 that
states must have a genuine choice to accept or reject the new ACA expansion funds and
requirements that come with those funds. A state’s choice whether or not to cover the Section
2001 ACA expansion group cannot be tied to the loss of all Medicaid funding. The Supreme
Court’s decision leaves enforcement of other provisions of ACA intact, including the new
coverage group created by ACA for youth aging out of foster care. Accordingly, all states are
expected to comply with the new mandatory coverage category for youth who have aged out of
foster care as of January 1, 2014. ACA made additional changes outside of Medicaid to assist
adults in obtaining private health insurance, which may benefit young adults who age out of
foster care and families who are served by child welfare agencies.
The report begins with a discussion of major findings. It then briefly describes the foster care
population and their unique health-related issues. Next is an overview of the federal programs and
policies in three areas—child welfare, Medicaid, and private health insurance—that directly or
indirectly address some of the health care needs of such children and young adults. The report
concludes with a discussion of issues pertaining to these federal policies. Appendix A discusses
selected research on the health care needs of children in foster care and those who leave foster

1 U.S. Department of Health and Human Services, Administration for Children and Families, Office of Planning,
Research and Evaluation, National Survey of Child and Adolescent Well-Being (NSCAW), “Estimates of
Supplemental Security Income Eligibility in Out-of-home Placements,” Research Brief No. 12 (undated).
2 Section 2001 of ACA contains requirements related to the Medicaid expansion group discussed by the U.S. Supreme
Court in NFIB v. Sebelius. Section 2004, as amended by Section 10201 of ACA, contains requirements related to
Medicaid coverage for youth who age out of foster care.
3 567 U.S. ___ (2012), available at http://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf. See also CRS Legal
Sidebar, Health and Medicine, “Conditioning Federal Grants after NFIB v. Sebelius,” posted July 3, 2012, by Kathleen
S. Swendiman and “To Be or Not to Be a ‘New Program?’ What Does NFIB v. Sebelius Mean for Implementation of
the Medicaid Expansion Provision?,” posted July 7, 2010, by Kathleen S. Swendiman.
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care due to age or placement in a permanent adoptive family. Appendix B summarizes the major
mandatory and optional Medicaid eligibility pathways for current and former foster children.
Children and Families Currently or Previously Involved With
Child Welfare
This report refers to four distinct populations of children and families who receive (or
previously received) services or assistance from the state child welfare agency:

Children who have been removed from their homes due to abuse and neglect, or
because their parents are unable to care for them. These children are under the care
and supervision of the state and are placed in a foster care home, group home, or other
setting. This report also touches on the health care needs of the parents of these
children.

Children who leave foster care for placement with a new permanent family via adoption
or guardianship.

Young adults who have reached the state age of majority and exited foster care. For the
purposes of this report, this category includes those young adults who are under the age
of 26.

Children who come into contact with child protective services, but are not removed to
foster care, and their parents.
Major Findings
• Approximately 35% to 60% of children placed in foster care have at least one
chronic or acute physical health condition that needs treatment, including
growth failure, asthma, obesity, vision impairment, hearing loss, neurological
problems, sexually transmitted diseases, and complex chronic illnesses. As
many as one-half to three-fourths show behavioral or social competency
problems that may warrant mental health services. Studies indicate that many
health and mental health care issues persist and that—relative to their peers in
the general population—children who leave foster care for adoption and those
who age out of care continue to have greater health care needs.
• Federal child welfare policy includes health-related provisions. For example,
child welfare agencies must ensure that the health care records of children in
foster care are periodically reviewed and updated. In addition, states must
develop a strategy that addresses the health care needs of each child in foster
care including, among other things, health care screenings and oversight of
prescription medicines. States must also ensure that young people aging out of
foster care are provided a copy of their health records, and information about
health insurance options and designating other individuals to make health care
decisions on their behalf in the event that they are unable to do so.
• States provide Medicaid to virtually all children in foster care through
mandatory and optional coverage pathways. Additionally, the large majority of
children who leave foster care for adoption are enrolled in Medicaid on a
mandatory basis, as are some children who leave care for legal guardianship
with kin. Under the primary Medicaid eligibility pathways for children adopted
from foster care (and some leaving to kinship guardianship), the income and
assets of the adoptive parents or guardians are not considered. In addition,
beginning on January 1, 2014, ACA creates a new mandatory pathway for
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young adults up to age 26 if they were in foster care at age 18. Their income
and assets will not be considered when determining Medicaid eligibility. This
ACA provision is distinct from the ACA expansion group, which was included
in a separate section of ACA and was discussed in the U.S. Supreme Court
decision NFIB v Sebelius. All states are expected to comply with the new
requirement to provide coverage for youth aging out of foster care.
• ACA made additional changes outside of Medicaid to assist childless adults and
children and their families (e.g., children in foster care who are vulnerable to
losing Medicaid upon returning home) in obtaining private health insurance. In
addition, private health insurance reforms were enacted to prohibit insurance
industry practices such as excluding coverage for preexisting health conditions
and setting lifetime limits on the dollar value of essential health benefits. A
number of ACA’s insurance reforms become effective in 2014. These provisions
are designed to provide protection to potentially vulnerable groups with a high
prevalence of preexisting conditions, which could include youth previously in
foster care.
• ACA also requires states to establish “American Health Benefits Exchanges” by
January 1, 2014. Exchanges will not be insurers but will provide qualified
individuals and small businesses access to private health insurance plans. In
general, the exchange plans will provide comprehensive coverage and meet all
applicable market reforms specified in ACA. To make exchange coverage more
affordable, eligible individuals may receive premium assistance in the form of
tax credits and cost-sharing subsidies. These provisions may provide new
opportunities for young adults who age out of foster care and/or families who
are served by child welfare agencies to access private health insurance.
• While federal law provides protections to address the health needs of children in
foster care, significant challenges remain. For example, federal child welfare
law requires cooperation between state child welfare and Medicaid agencies to
ensure that the health needs of children in foster care are properly identified and
treated; however, there has been little federal guidance on how cooperation
should occur. Given the distinct roles played by the child welfare and Medicaid
agencies, understanding precisely what cooperation means and how it should
occur remains a question.
• Beginning in 2014, ACA requires states to extend Medicaid coverage to certain
individuals under the age of 65 with income up to 133% of the federal poverty
level (FPL) (i.e., the ACA expansion group). However, on June 28, 2012 the
U.S. Supreme Court held in NFIB vs. Sebelius that the federal government
cannot terminate current Medicaid federal matching funds if a state refuses to
expand its Medicaid program to include the ACA expansion group. If a state
accepts the new ACA Medicaid expansion funds, it must abide by the new
expansion coverage rules, but a state can refuse to participate in the expansion
without losing any of its current federal Medicaid matching funds. Therefore
not all states may include this mandatory coverage group in their Medicaid
program. However, in states that elect to include the ACA expansion group in
their state plans, the expansion may enable more family members with children
in foster care—or otherwise involved with child welfare—to qualify for
Medicaid. While ACA includes enhanced federal matching funds to assist states
with some of the costs associated with anticipated program growth, states will
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likely face challenges in balancing the costs associated with Medicaid’s future
expanded role and ongoing state fiscal pressures.
Children in, or Formerly in, Foster Care
Children in foster care are children that the state has removed from their homes and placed in
another setting that provides round-the-clock care (e.g., foster family home, group home, child
care institution).4 Placement in foster care means that a judge has determined that the child’s
removal from his or her home was necessary because the home was “contrary to the welfare” of
the child and, accordingly, the judge has given responsibility for the child’s “care and placement”
to the state child welfare agency.5 The large majority of children enter foster care because of
neglect or abuse at the hands of their parents. However, in some instances a child’s behavior may
also be a reason for entry into foster care; this is more often true for older children.6
During FY2010, some 662,000 children spent at least one day (24 hours) in foster care and
254,000 left the system, resulting in more than 408,000 of those children remaining in care on the
last day of that fiscal year.7 Although there is some variation at the state level, the national foster
care caseload has been in decline for at least a decade, with the number of children remaining in
foster care on the last day of FY2010 decreasing by close to 160,000 from its recorded high of
567,000 in FY1999.
Foster care is intended to be a temporary placement for children, and a primary goal of child
welfare agencies is to expeditiously find a permanent family for them. For most children who
enter foster care, permanency is achieved through reunification with their parents (after services
have been provided to make this a safe and appropriate permanency outcome). When
reunification is not possible or appropriate, however, children must remain in care until a new
permanent adoptive family, legal guardian, or “fit and willing” relative can be identified. For
some children, no permanent family is identified. These children age out of care when they reach
the state’s age of majority—typically age 18, or a later age when the state chooses to end custody
(usually no later than age 21).
Of the approximately 254,000 children or youth who left foster care custody during FY2010,
most of these children or youth—almost six out of every 10 (59%)—returned to their biological
parents or went to live with another “fit and willing” relative while another 25% left care for new

4 For child welfare purposes, child refers to an individual under the age of 18 except in states that choose to extend
foster care up to age 19, 20, or 21. For Medicaid purposes, the term child is not specifically defined in statute, but the
term child generally refers to individuals under the age of 19. However, some of the Medicaid eligibility pathways
specifically permit states to extend coverage to individuals up to age 19, 20, or 21. Likewise, some Medicaid benefits
are defined in terms of age. For example, early and periodic, screening, diagnostic and treatment (EPSDT) services are
limited to most Medicaid beneficiaries under the age of 21.
5 A few children enter foster care under a “voluntary placement agreement” between their parents and the state child
welfare agency. In these cases, federal child welfare policy would not require any court involvement in the placement
until 180 days at least or 12 months at most.
6 U.S. House of Representatives, Committee on Ways and Means, Green Book 2008, Table 11-41 and Chart 11-7.
(Hereafter, Green Book 2008)
7 U.S. Department of Health and Human Services, Administration for Children and Families, Administration on
Children, Youth and Families, Children’s Bureau, “Trends in Foster Care and Adoption, Based on Foster Care Data
Reported by States as of June 15, 2011,” http://www.acf.hhs.gov/programs/cb/stats_research/afcars/
trends_june2011.pdf.
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permanent homes via adoption or legal guardianship. However, another 11% aged out of foster
care custody without reunification or placement in a new permanent family. 8 The number of
youth who age out of foster care each year increased over the past decade, rising from just over
20,000 in FY2002 to a high of nearly 30,000 in FY2008. During FY2010, the number of youth
aging out of care declined to less than 28,000. However, this number continued to represent a
historically high share (11%) of all exits during the year.9 Some research into foster care caseload
trends suggests that the number of children aging out of foster care may decline and then stabilize
in the near future, primarily due to a predicted decrease in the number of children in foster care
ages 10 through 17.10
Health Care Needs
Between 35% and 60% of children and youth entering foster care have at least one chronic or
acute physical health condition that needs treatment.11 Chronic problems include, for example,
growth failure, asthma, obesity, vision impairment, hearing loss, neurological problems, gastro-
esophageal reflux, sexually transmitted diseases, and complex chronic illnesses. An even greater
estimated share of these children and youth entering foster care—between one-half and three-
fourths—have behavioral or social competency problems that may warrant mental health
services. This rate of physical and mental health issues is “significantly higher” than what would
be expected in the comparable general population of children and youth, although it is somewhat
more comparable to children living in families with income below the poverty level.12 Children
who leave foster care often carry with them significant health and mental health needs. A national
survey of children adopted from foster care found that 54% had special health care needs,13 which
means they have one or more conditions (expected to last 12 months or more) that required
ongoing need for more medical, mental health, or educational services than is usual for most
children of the same age.14 Another study found that young adults who aged out of foster care at
age 18 or soon thereafter were more likely than their peers generally to report having a health
condition that limits their daily activities and to participate in psychological and substance abuse
counseling. They were also less likely to have health insurance.15 Research on the health care

8 Additionally, in FY2010 more than 1,500 youth (1% of exits) who had run away from their foster care placement
were released by courts from state foster care responsibility. Another 2% left care because they were transferred to
another agency (i.e., juvenile justice, etc.). HHS, ACF, ACYF, CB, AFCARS Report #18.
9 HHS, ACF, ACYF, CB, AFCARS Report #12, and AFCARS Report #18.
10 Fred Wulczyn and Linda Collins, “A 5-Year Projection of the Number of Children Reaching Age 18 While in Foster
Care,” Chapin Hall Center for Children, University of Chicago, 2010, http://www.chapinhall.org/research/report/5-
year-projection-number-children-turning-age-18-while-foster-care.
11 This is based on single state studies and data from a nationally representative survey. John Landsverk, Director,
Child and Adolescent Services Research Center, Rady Child’s Hospital, San Diego, “Health Care for Children in Foster
Care,” written testimony submitted for Subcommittee on Income Security and Family Support, House Committee on
Ways and Means hearing, July 19, 2007.
12 Ibid. See also Barbara Burns, et. al “Mental Health Need and Access to Mental Health Services by Youth Involved
with Child Welfare: A National Survey,” Journal of the American Academy of Child and Adolescent Psychiatry, vol.
43, no. 8 (August 2004), pp. 960-970.
13 Sharon Vandivere, Karin Malm and Laura Radel, Adoption USA: A Chartbook Based on the 2007 National Survey of
Adoption Parents,
U.S. Department of Health and Human Services (HHS), Office of the Assistance Secretary of
Planning and Evaluation (ASPE), Washington, DC, 2009, pp. 21-23.
14 Ibid, p. 23.
15 The studies do not posit that foster care, per se, is associated with the challenges former foster youth face in
adulthood. In fact, children tend to have a range of challenges upon entering care. Fred Wulczyn et al. Beyond Common
(continued...)
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needs and status of children in foster care, those who have aged out of foster care, and those who
have left foster care for adoption is described further in Appendix A.
Child Welfare Programs: Overview
The majority of federal child welfare policy and funding is provided via programs authorized in
Title IV-B and Title IV-E of the Social Security Act.16
Under two formula grant programs included in Title IV-B—the Stephanie Tubbs Jones Child
Welfare Services program and the Promoting Safe and Stable Families program—the federal
government provides funds to state child welfare agencies for provision of a wide range of child
welfare-related services to children and families. Overall, the focus of those services is to support
and strengthen families (whether biological, adopted, or extended) in ways that ensure children’s
safety, permanence (with a stable family), and well-being. Funding is provided on a discretionary
or capped entitlement basis and states may generally choose to serve any child or family they
believe would benefit from these services.17 The exact number of children and families served via
these programs is not known. However, most are believed to access services following an
investigation or other child protection agency response to an allegation of child abuse or neglect.
In FY2010, state child protection agencies conducted some 2.0 million child abuse and neglect
investigations or assessments, involving some 3.6 million children. Many states mandate
provision of any services needed during the investigation. In addition, roughly 1 million of these
children received services after the conclusion of the investigation—either in the home (79% of
those receiving post-investigation services) or via removal to foster care (21%).18
The Title IV-E program has three main components: foster care, adoption assistance, and kinship
guardianship assistance. States that choose to operate a Title IV-E program (all states do) must
provide foster care maintenance payments to each eligible child in foster care and must enter into
an adoption assistance agreement with parents of each eligible adopted child.19 States are not
required to provide kinship guardianship assistance to eligible children who leave foster care for
placement with a legal (relative) guardian. However, states may elect to offer this assistance (in
which case any child eligible for kinship guardianship, as defined in the state’s Title IV-E plan,
must be served). Not all children in foster care and not all those leaving care for guardianship or
adoption are eligible for federal assistance under Title IV-E, and eligibility for Title IV-E varies
by each of these components. (The various Title IV-E eligibility criteria are summarized, below,
in the context of Medicaid eligibility.) Funding for the Title IV-E program is authorized as an

(...continued)
Sense: Child Welfare, Child Well-Being, and the Evidence for Policy Reform (New Brunswick: AldineTransaction,
2005), p. 116. (Hereafter, Wulczyn et al., Beyond Common Sense.)
16 CRS Report RL34121, Child Welfare: Recent and Proposed Federal Funding, by Emilie Stoltzfus.
17 CRS Report R41860, Child Welfare: Funding for Child and Family Services Authorized Under Title IV-B of the
Social Security Act
, by Emilie Stoltzfus.
18 HHS, ACF, ACYF, Children’s Bureau, Child Maltreatment 2010 (December 2011). A child is counted each time an
investigation regarding that child occurred or a post-investigation service was provided on that child’s behalf.
Therefore, some children are included more than once in these counts.
19 Throughout this report, the child welfare agency that administers the Title IV-E program is referred to as the “state”
child welfare agency. “States” with an approved Title IV-E plan include all 50 states, the District of Columbia, and
Puerto Rico. In addition, effective October 1, 2009, tribes are permitted to seek approval of a Title IV-E plan and to
operate a Title IV-E program.
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open-ended entitlement; states are entitled to federal reimbursement for a part of each eligible
cost incurred on behalf of an eligible child.20 In FY2010, close to 614,000 children received Title
IV-E assistance on an average monthly basis, more than two-thirds of these children (70%) had
exited foster care for adoption and were receiving adoption assistance.21
Finally, under the Chafee Foster Care Independence Program (Section 477, Title IV-E of the
Social Security Act) state child welfare agencies receive funds to provide independent living
services—such as mentoring, tutoring, substance abuse prevention, and preventive health
services—to youth who are expected to age out of foster care (without placement in a new
permanent family), those who have recently aged out, and those who left foster care for adoption
or kinship guardianship at age 16 or older. Services are expected to improve these youths’ ability
to transition from foster care custody to successful adulthood. Funding is providing on a
discretionary and capped entitlement basis.22
Each of these child welfare programs is jointly funded by the state and the federal government,
and many program details are determined at the state level. The Children’s Bureau within the U.S.
Department of Health and Human Services (HHS), Administration for Children and Families
(ACF), Administration on Children, Youth, and Families (ACYF), administers these child welfare
programs at the federal level; individual state child welfare agencies administer them on a day-to
day basis.
Child Welfare Policy: Health Needs of Children in, or Leaving,
Foster Care

As a condition of receiving federal funds dedicated to child welfare purposes, states must meet
federal requirements related to planning for and administering services to children and families,
and they must provide certain protections for children in foster care. Child welfare policy does
not permit states to use federal child welfare program funds (under Title IV-B or Title IV-E) to
pay medical expenses of children in care or those who leave foster care due to their age.
However, federal child welfare policy requires child welfare agencies to respond to certain
health-related requirements.
Health Care Records
Federal law requires that the state child welfare agency have a written plan for each child in foster
care, including certain health-related records. These records must include the names and
addresses of the child’s health providers, a record of the child’s immunizations, information about
the child’s medication, and any other relevant health information concerning the child.23 These
records must be reviewed, updated, and supplied to a child’s foster care parent or provider at the

20 For more information on the Title IV-E program generally, see Green Book 2008, pp. 11-41 to 11-84 at
http://democrats.waysandmeans.house.gov/media/pdf/111/s11cw.pdf.
21 Based on state FY2010 Title IV-E claims as compiled by HHS, ACF, Office of Legislative Affairs and Budget. Of
the 613,929 children receiving Title IV-E assistance on an average monthly basis, 429,233 received adoption
assistance, 181,078 received foster care maintenance payments, and 3,618 received kinship guardianship assistance.
22 For more information, see CRS Report RL34499, Youth Transitioning from Foster Care: Background and Federal
Programs
, by Adrienne L. Fernandes-Alcantara.
23 Section 475(1)(C) of the Social Security Act.
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time of each foster care placement. Additionally, a copy of the record must be provided to a youth
at the time he/she leaves care due to age.24
Health Care Oversight and Coordination Planning
As part of the requirements that demonstrate compliance with the Stephanie Tubbs Jones Child
Welfare Services Program (Title IV-B, Subpart 1), states must submit a state plan for child
welfare services that includes a coordinated strategy and oversight plan to ensure access to health
care, including mental health services and dental care, for all children in foster care. This
coordinated strategy and oversight plan must be developed via a collaborative effort between the
state child welfare agency and the state agency that administers Medicaid, in consultation with
pediatric and other health care experts, as well as experts in, or recipients of, child welfare
services.25

24 Section 475(5)(D) of the Social Security Act.
25 Section 422(a)(15) of the Social Security Act. In guidance issued in July 2010, HHS noted that the state child welfare
agency has flexibility in implementing this requirement and in deciding whether to implement a single, agency-wide
health care monitoring entity or to put in place another mechanism to oversee the health care of children in care. As
part of the plan, the state must include a schedule for health screenings that mirrors or incorporates elements of existing
professional guidelines for physical, mental, and dental health screenings, and standards of care into the plan. The
guidance emphasizes that states should pay particular attention to the use of psychotropic medicines by children in care.
HHS, ACF, ACYF, CB, “Guidance on Fostering Connections to Success and Increasing Adoptions Act,” ACYF-CB-
PI-10-11, July 9, 2010. In October 2011, P.L. 112-34 amended the plan requirements to explicitly require protocols to
address psychotropic medication and, separately, plans to meet identified needs resulting from emotional trauma
experienced by children before (and as a result of) entering foster care.
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Health Care Oversight and Coordination Planning Requirements
States must develop a plan for the ongoing oversight and coordination of health care services
for any child in foster care. The plan must be developed in coordination and collaboration
with the state child welfare agency and state Medicaid agency, and in consultation with
pediatricians, other experts in health care, and experts in and recipients of child welfare
services. It must ensure a coordinated strategy to identify and respond to the health care
needs of children in foster care placements, including mental health and dental health needs
and must outline

a schedule for initial and follow-up health screenings that meet reasonable standards of
medical practice;

how health needs identified through screenings, including emotional trauma associated
with a child’s maltreatment and removal from home, will be monitored and treated;

how medical information for children in care will be updated and appropriately shared,
which may include the development and implementation of an electronic health record;

steps to ensure continuity of health care services, which may include the establishment
of a medical home for every child in care;

the oversight of prescription medicines, including protocols for the appropriate use and
monitoring of psychotropic medications;

how the state actively consults with and involves physicians or other appropriate medical
or non-medical professionals in assessing the health and wel -being of children in foster
care and in determining appropriate medical treatment for the children; and

steps to ensure that the components of the transition plan development process
(required under Section 475(5)(H)) that relate to the health care needs of children aging
out of foster care are met, including the requirements to include options for health
insurance, to provide information about a health care power of attorney, health care
proxy, or other similar document recognized under state law; and to provide the child
with the option to execute such a document.
Source: Section 422(b)(15) of the Social Security Act.
Little guidance has been provided on how coordination is to occur in the development of this
health care oversight plan generally. However, with regard to psychotropic medication and
otherwise meeting the mental health needs of children in foster care (both required components of
the plan), three HHS agencies—the Administration for Children and Families (ACF), Centers on
Medicare and Medicaid (CMS), and the Substance Abuse and Mental Health Services
Administration (SAMHSA)—sent a joint letter to the directors of each state child welfare,
Medicaid, and mental health agency in November 2011. The letter discussed actions being taken
at the three federal agencies to “support effective management” of prescription medication for
children in foster care and the need for their counterpart state agencies to address this issue.
Further, it announced that CMS, ACF, and SAMHSA are scheduled to convene state directors of
child welfare, Medicaid, and mental health agencies in 2012 to address use of psychotropic
medications for children in foster care as well as the mental health needs of children who have
experienced maltreatment. According to the letter, “State Medicaid/CHIP agencies and mental
health authorities play a significant role in providing continuous access to and receipt of quality
mental health services for children in out-of-home care. Therefore it is essential that State child
welfare, Medicaid, and mental health authorities collaborate in any efforts to improve health,
including medication use and prescription monitoring structures in particular.”26

26 George Sheldon, Acting Assistant Secretary, ACF; Donald Berwick, Administrator, CMS; and Pamela Hyde,
(continued...)
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Health Care Power of Attorney
One of the health care oversight provisions directs states to ensure that each young person aging
out of foster care is provided information about designating other individuals to make health care
decisions on their behalf in the event that they are unable to do so themselves, and about how to
execute what is known as a power of attorney document.
A health care power of attorney (or health care proxy) is a document that lays out the
circumstances under which health care decisions can be made for a person if he or she is unable
to make or communicate those decisions.27 The document designates an individual (sometimes
referred to as an “agent”) who can make decisions on that person’s behalf. The agent can be
anyone that the individual chooses; the agent does not have to be a relative. The power of
attorney form can be tailored to an individual’s circumstances, although states have generic forms
that can be used.28
The health care oversight provision on health care power of attorney references the transition
planning requirement under Title IV-E of the foster care program. The transition plan requirement
directs states to develop a plan for (and with) any youth in foster care for whom the state’s
responsibility is expected to end because the youth has reached the state’s age of majority (i.e.,
age 18 or a later age, up to 21, at state option). The plan must be developed during the 90-day
period immediately prior to the date on which the youth is expected to age out of foster care, and
it must include specific options on housing, health insurance, education, local opportunities for
mentors and continuing support services, and workforce supports and employment services.29
Beginning with FY2011, the transition plan must include information about the importance of
designating another individual to make health care treatment decisions on behalf of the youth if
he or she becomes unable to participate in these decisions and does not have a relative who would
be authorized to make these decisions under state law, or he or she does not want that relative to
make those decisions. In addition, the transition plan must provide the youth with the option to
execute a health care power of attorney, health care proxy, or other similar document recognized
under state law. States must meet related requirements under the Title IV-E Chafee Foster Care

(...continued)
Administrator, SAMHSA, to “State Director,” November 23, 2011, http://www.childwelfare.gov/systemwide/
mentalhealth/effectiveness/jointlettermeds.pdf.
27 A health care power of attorney is different from a living will, which allows an individual to express his or her
wishes concerning life-sustaining procedures but does not specify who should make decisions on the individual’s
behalf if needed. For further information, see CRS Report R40235, End-of-Life Care: Services, Costs, Ethics, and
Quality of Care
, coordinated by Kirsten J. Colello.
28 Laws pertaining to health care power of attorney are specific to each state. Generally, if an adult becomes ill and
incapacitated, and no health care power of attorney has been executed, then state law will determine how medical
decisions will be made. Some states specify certain individuals, such as a spouse or other relative, who would be
authorized to make decisions on the person’s behalf. In other states, where a law may provide other criteria for such a
decision, a spouse or relative is still likely to have an important role. In a situation where there are no relatives, a
hospital may petition a court to have someone appointed to make decisions for the incapacitated patient. Further, in an
emergency situation, a doctor or hospital can treat the person without consent or input from anyone else in order to save
his or her life.
29 HHS/ACF/ACYF/Children’s Bureau encourages child welfare agencies to use transition planning to build on earlier
efforts to assist young people in making the transition from foster care, including through the case planning process and
permanency hearings. HHS, ACF, ACYF, CB, “Guidance on Fostering Connections to Success and Increasing
Adoptions Act,” ACYF-CB-PI-10-11, July 9, 2010. According to HHS, the component of the plan pertaining to health
care power of attorney for youth aging out of foster care will be addressed in future guidance.
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Independence Program (CFCIP).30 As part of their application for these funds, states must certify
that they meet requirements pertaining to health care power of attorney.
A health care power of attorney may be especially important for young people aging out of care
when they do not have a relative upon whom they can rely to make decisions if they become
incapacitated. Even if former foster youth maintain relationships with kin, these relationships may
be tenuous. A prospective study that is tracking young people who emancipated from care in three
Midwest states found that at ages 25 or 26, roughly one-third to one-half of the former foster
youth surveyed reported being “very close” or “somewhat close” to their biological mother
(52.0%), biological father (30.8%), grandparents (46.2%), or “other relatives” (38.8%).31
(Comparable data were not reported for youth generally.) This suggests that a significant share of
former foster youth in the study did not have strong relationships with at least some of their
relatives after having been out of care for at least a few years.
Medicaid Program: Overview of Benefits and
Eligibility

Medicaid is a means-tested entitlement program that finances the delivery of primary and acute
medical services as well as long-term care, covering more than 68 million people in FY2010.32
The Medicaid program is jointly funded by states and the federal government and many program
details are determined at the state level. The Centers for Medicare and Medicaid Services (CMS)
within the U.S. Department of Health and Human Services (HHS) is responsible for Medicaid
program administration at the federal level, but individual state Medicaid agencies administer
their own programs on a day-to-day basis.
Benefits
In general, states provide mandatory benefits (e.g., inpatient hospital services; early and periodic
screening, diagnostic and treatment (EPSDT) services;33 physician services; and pregnancy-
related services) and state-selected optional benefits (e.g., prescribed drugs, routine dental care,
case management services, and inpatient psychiatric care for the elderly and individuals under age
21) to their Medicaid beneficiaries. These are referred to as “traditional” Medicaid state plan
benefits. States define the specific features of each covered benefit within broad federal
guidelines. For example, states may place different limits on the amount of inpatient hospital
services a beneficiary can receive in a year (e.g., up to 15 inpatient days per year in one state
versus unlimited inpatient days in another state). For these reasons, there is great variability
across states in terms of their Medicaid benefit coverage.

30 For further information, see CRS Report RL34499, Youth Transitioning from Foster Care: Background and Federal
Programs
, by Adrienne L. Fernandes-Alcantara.
31 Mark E. Courtney et al., Midwest Evaluation of the Adult Functioning of Former Foster Youth: Outcomes at Age 26,
Chapin Hall Center for Children, University of Chicago, 2011, http://www.chapinhall.org/research/report/midwest-
evaluation-adult-functioning-former-foster-youth (Hereinafter, Courtney et al., Midwest Evaluation of the Adult
Functioning of Former Foster Youth: Outcomes at Age 26.
)
32 For more information on the Medicaid program, see CRS Report RL33202, Medicaid: A Primer, by Elicia J. Herz.
33 For more information on EPSDT, see discussion in the text below.
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As an alternative to providing all of the mandatory and selected optional benefits under traditional
Medicaid, the Deficit Reduction Act of 2005 (DRA, P.L. 109-171) gave states the option to enroll
state-specified groups in benchmark and benchmark-equivalent benefit packages.34 Within certain
federal guidelines, benchmark packages may provide generally more-limited benefits than
“traditional Medicaid.”35 The DRA of 2005 also gave states the option to impose premiums or
other cost sharing requirements for some Medicaid beneficiaries.36
Eligibility
Federal Medicaid law defines over 50 distinct population groups as being potentially eligible for
state Medicaid programs. Some eligibility groups are mandatory, meaning that all states with a
Medicaid program must cover them; others are optional. For most groups to qualify for coverage,
applicants’ incomes, and sometimes their resources or assets, must meet program financial
requirements. Medicaid eligibility is also subject to categorical restrictions—generally, it is
available only to the elderly, persons with disabilities, members of families with dependent
children, and certain other pregnant women and children.
Section 2001 of ACA added a new mandatory37 coverage group to the Medicaid statute to include
certain individuals (under the age of 65) with income at or below 133% of the federal poverty
level (FPL) (effectively 138% of FPL as a result of the 5% income disregard)38 by January 1,
2014, or sooner at state option.39,40 On June 28, 2012, the United States Supreme Court issued its

34 Section 1937(a)(2)(viii) of the Social Security Act. When certain conditions are met, states can also offer premium
assistance for health insurance offered through employer-based plans for Medicaid children and their parents. Section
1115 of the Social Security Act provides states with flexibility to test benefit package and service delivery innovations
with approval from the Secretary of HHS.
35 Benchmark packages must include the same benefits offered under (1) the Blue Cross/Blue Shield preferred provider
plan under the Federal Employees Health Benefits Program (FEHBP), (2) a plan offered to state employees, (3) the
largest commercial health maintenance organization (HMO) in the state, and (4) other coverage appropriate for the
targeted population approved by the Secretary of the Department of Health and Human Services (HHS). Benchmark-
equivalent coverage must have the same actuarial value as one of the benchmark plans. The benchmark equivalent
coverage includes, for example, (1) inpatient and outpatient hospital services; (2) physician services; (3) lab and x-ray
services; (4) well-child care, including immunizations; and (5) other appropriate preventive care (designated by the
Secretary). Such coverage must also include at least 75% of the actuarial value of coverage under the benchmark plan
for vision care and hearing services.
36 States may require certain beneficiaries to share in the cost of Medicaid services, although there are limits on the
amounts that states can impose, the beneficiary groups that can be required to pay, and the services for which cost-
sharing can be charged. See CRS Report RS22578, Medicaid Cost-Sharing Under the Deficit Reduction Act of 2005
(DRA)
, by Elicia J. Herz.
37 The ACA expansion group resides in Section 1902(a)(10(A)(i) of the Medicaid statue, which also lists the eight other
mandatory eligibility groups. Historically, states that participated in the Medicaid program were required to cover these
mandatory groups in order to receive federal matching funds.
38 Federal poverty guidelines are based on family size and are recalculated periodically (usually on an annual basis) to
keep pace with inflation. Under the FY2012 federal poverty guidelines, 133% of FPL for a family of one (living in one
of the 48 contiguous states) was roughly $14,856 and 138% FPL for a family of one was roughly $15,415. See Federal
Register,
January 26, 2012, at http://aspe.hhs.gov/poverty/12poverty.shtml.
39 For a more detailed discussion, see the CRS Congressional Distribution Memo, Selected Issues Related to the Effect
of NFIB v. Sebelius on the Medicaid Expansion Requirements in Section 2001 of the Affordable Care Act, by Kathleen
S. Swendiman and Evelyne P. Baumrucker. Also, see CRS Legal Sidebar, Health and Medicine, “Conditioning Federal
Grants after NFIB v. Sebelius,” posted July 3, 2012, by Kathleen S. Swendiman available at http://www.crs.gov/
analysis/legalsidebar/pages/details.aspx?ProdId=117, and “To Be or Not to Be a ‘New Program?’ What Does NFIB v.
Sebelius Mean for Implementation of the Medicaid Expansion Provision?,” posted July 7, 2010, by Kathleen S.
Swendiman available at http://www.crs.gov/analysis/legalsidebar/pages/details.aspx?ProdId=121.
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decision in National Federation of Independent Business v. Sebelius. The Court held that the
federal government cannot terminate current Medicaid federal matching funds if a state refuses to
expand its Medicaid program to include non-elderly, non-pregnant adults under 133% of the
federal poverty level. If a state accepts the new ACA Medicaid expansion funds, it must abide by
the new expansion coverage rules, but, based on the Court’s opinion; it appears that a state can
refuse to participate in the expansion without losing any of its current federal Medicaid matching
funds. The Court’s decision only limited the Secretary of Health and Human Service’s
enforcement mechanism; it did not specifically affect, change, or limit any other Medicaid or
ACA provisions.
In general, it is possible for an individual to qualify for Medicaid under multiple eligibility
pathways. In these cases, eligibility determinations are to be made in a manner consistent with
simplicity of administration and in the best interests of the beneficiary.41 Further, states cannot
deny Medicaid coverage to individuals with completed applications, or terminate existing
coverage, until all avenues of eligibility have been explored and evaluated. For individuals who
would be eligible under more than one category, Medicaid regulations specify that the individual
will be determined eligible for the category he or she selects.42
Medicaid Benefits for Children in, or Formerly in,
Foster Care

Regardless of the Medicaid eligibility pathway used, children in foster care, those who have left
foster care for adoption or guardianship, and those who have aged out of care are generally
entitled to the same set of “traditional” Medicaid state plan services available to other
categorically needy children enrolled in a given state’s Medicaid program. Central among these
benefits is a provision in the law requiring that children receive all medically necessary services
authorized in federal statute through the EPSDT program. The EPSDT program—which is a
required benefit for nearly all Medicaid beneficiaries under the age of 2143—covers health
screenings and services, including assessments of each child’s physical and mental health
development; laboratory tests (including lead blood level assessment); appropriate
immunizations; health education; and vision, dental, and hearing services. The screenings and
services must be provided at regular intervals that meet “reasonable” medical or dental practice
standards.44 States are required to provide all federally allowed treatment to correct problems
identified through screenings, even if the specific treatment needed is not otherwise covered
under a given state’s Medicaid plan.45

(...continued)
40 For more information on the Medicaid and CHIP provisions in ACA, see CRS Report R41210, Medicaid and the
State Children’s Health Insurance Program (CHIP) Provisions in ACA: Summary and Timeline
.
41 Section 1902(a)(19) of the Social Security Act.
42 See 42 C.F.R. Section 435.404. For individuals who would be eligible under more than one category, the state may
assign eligibility based on a predetermined eligibility hierarchy, but ultimately the individual gets to select the category
under which he or she enrolls.
43 EPSDT is not a mandatory benefit for the medically needy, although states that choose to extend EPSDT to their
medically needy population must make the benefit available to all individuals under age 21.
44 Social Security Act §1905(r) of the Social Security Act.
45 This means states may be required to cover some services for children that would be optional or not covered at all for
(continued...)
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While EPSDT is a critical benefit for children covered by Medicaid, tracking receipt of the
covered services is complicated by the diverse range of licensed providers (e.g., medical doctor,
nurse practitioner, dentists, and others) that may offer the services, as well as the wide range of
locations in which the screenings or other services may be provided (ranging from well-child
clinics to Head Start programs and many other locations). 46 A recent investigation by the HHS
Office of Inspector General (OIG) found that many Medicaid-eligible children did not receive all
the EPSDT services47 and this is consistent with earlier studies by the HHS OIG showing
inconsistent receipt of basic health care services for children in foster care.48
The primary data source for tracking receipt of EPSDT services is separate from the overall
Medicaid claims data reported to CMS,49 and more recent administrative data on receipt of
EPSDT services by children in foster care were not available. Analysis of overall Medicaid
claims data,50 however, suggests several widely adopted optional Medicaid services are
particularly important to children who are coded for Medicaid eligibility purposes as “foster care
children.”51 Specifically, in FY2008 just over 46% of all Medicaid fee-for-service spending for
children coded as children in foster care (which includes many who were adopted from foster
care) was associated with the following top five service-spending categories: (1) prescription
drugs ($743 million); (2) rehabilitative services (which are medical or remedial services to restore

(...continued)
adults.
46 Eligible EPSDT providers and service locations are detailed in CMS, State Medicaid Manual: Part 5: Early and
Periodic Screening Diagnostic and Treatment Services, Section 5124, pp. 5-19.
47 HHS, OIG, “Most Medicaid Children in Nine States Are Not Receiving All Required Preventive Screening
Services,” May 2010 (OEI-05-08-00520). The report cited a need for improved documentation of certain screenings as
well as better provider knowledge of what a screening entails (among other things) as ways to improve services. In
December 2010, CMS convened a National EPSDT Improvement Workgroup to help identify areas for improvement of
EPSDT and to work at the federal level and with states to improve both children’s access to EPSDT services and the
quality of the data reporting on receipt of those services. See http://www.medicaid.gov/Medicaid-CHIP-Program-
Information/By-Topics/Benefits/Early-Periodic-Screening-Diagnosis-and-Treatment.html.
48 Between 2003 and 2005, HHS conducted studies of health care use of children in foster care in eight states. For an
overview, see HHS, OIG “Children’s Use of Health Care Services While in Foster Care: Common Themes,”
Memorandum to Susan Orr, Associate Commissioner for the Children’s Bureau, Administration for Children and
Families, and Dennis G. Smith, Director of Centers for Medicare and Medicaid Services, from Brian Ritchie, Acting
Deputy Inspector General for Evaluation and Inspections, July 2005 (OEI-07-00-00645).
49 The primary data source used to track Medicaid EPSDT services is Form CMS-416. States use this from to report
aggregate EPSDT statistics on an annual basis, including services provided under both fee-for-service and managed
care arrangements. CMS Form 416 records the number of children (by age group) who are eligible for EPSDT services;
have received child health screening services; are referred for corrective treatment; have received dental services; are
enrolled in managed care; and/or are screened for blood lead tests.
50 These claims data are reported via the Medicaid Statistical Information System (MSIS), which may be analyzed used
the Medicaid Analytic Extract (MAX). A CMS Questions and Answers document advises MSIS and MAX data users
not to rely on the “Type of Service” or “Program Type” data elements to identify EPSDT or other preventive services
delivered to children, “ ... users are warned that there is substantial variation across states in terms of exactly which
services are identified as EPSDT services in MSIS reporting. At one extreme, some states report only screening
services as EPSDT services. Referrals and treatments are included in MSIS and MAX, but they may not be identified
as EPSDT services. At the other extreme, some states identify a wide array of services (including screening, referrals
and treatments) as EPSDT services.” For more information, see https://questions.cms.hhs.gov/app/answers/detail/a_id/
9228/~/is-it-possible-to-identify-early-and-periodic-screening-diagnosis-and-treatment).
51 For purposes of Medicaid eligibility categories, “foster care children” include some (but not all) children in foster
care, most children who are adopted from foster care, and certain children who have aged out of foster care. See
Appendix A, footnotes for further discussion of the children categorized as “foster care” children for Medicaid
purposes.
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a recipient to his or her best possible functional level) ($660 million); (3) inpatient psychiatric
care services ($509 million); (4) inpatient hospital care services ($501 million); and (5) targeted
case management (which are case management services provided to a specific subpopulation of
Medicaid enrollees to help them identify needed, medical, social, or other services, locate
providers, and monitor and evaluate receipt of services) ($302 million).52 (See Appendix A for
more information on this analysis.)
Use of both rehabilitative services and targeted case management (TCM) for children in, or
formerly in, foster care has been the subject of legislative and/or regulatory activity in the past
decade. As described below, Congress has generally acted to preserve access to these benefits for
children in foster care and those who leave foster care for adoption (under a Title IV-E
agreement).53 However, recent survey data appear to show that state child welfare agencies have
reduced their use of these Medicaid funding options.
As part of the Deficit Reduction Act of 2005 (P.L. 109-171), Congress acted to both clarify what
case management services include, and, with specific regard to children in foster care, the
services that could not be supported via Medicaid’s TCM benefit. The statute provides that
Medicaid TCM may not be used to support direct delivery of medical or other social services,
including foster care services, which include (but are not limited to) research gathering and
completion of documentation required by the foster care program, assessing adoption placements,
recruiting or interviewing potential foster care parents, serving legal papers, home investigation,
providing transportation, administering foster care subsidies, and making placement
arrangements.54 Subsequently, CMS released an interim final rule on case management and TCM
that was intended to implement these specific changes and, particularly, to clarify use of TCM for
children in foster care and other Medicaid-eligible groups. Critics of the December 2007 interim
rule, which included child welfare advocates and state administrators, argued that it was more
restrictive than Congress intended, would result in cuts to necessary TCM services, and would
increase state administrative costs. Congress enacted several temporary moratoria on its full
implementation. Ultimately, the Obama Administration expressed some of these same concerns
about the interim final rule and responded by rescinding parts of it to address most or all of
these concerns.55
As part of that same 2009 announcement, the Obama Administration rescinded, in whole, a
proposed regulation that appeared to limit rehabilitative services for children in foster care,
among other Medicaid enrollees. Similar to the TCM rule, Congress had acted on more than one
occasion to temporarily prohibit CMS from implementing the proposed rehabilitative services
rules and it further adopted a Sense of Congress (P.L. 111-5, Section 5003) indicating that CMS
should never finalize the proposed rehabilitative services rule.56

52 Based on CRS analysis described in Appendix A. These findings from FY2008 claims data are generally consistent
with an analysis of FY2001 Medicaid claims for “foster care” children that was conducted by the Urban Institute. See
Rob Geen, Anna Sommers, and Mindy Cohen, “Medicaid Spending on Foster Children,” Urban Institute, August 2005.
53 See CRS Report RL34426, Medicaid Targeted Case Management (TCM) Benefits, by Cliff Binder; and CRS Report
RL34432, Medicaid Rehabilitation Services, by Cliff Binder.
54 Section 1915(g)(2)(A)(iii) of the Social Security Act. See also Conference Report to accompany S. 1932 (H.Rept.
109-362), Deficit Reduction of 2005, pp. 320-323 and CRS Report RL33155, Child Welfare: Foster Care and
Adoption Assistance Provisions in Budget Reconciliation
, by Emilie Stoltzfus.
55Federal Register, June 30, 2009, pp. 31183-31196. CRS Report RL34764, Select Bush Administration Medicaid
Rulemakings: Congressional and Administrative Actions
, by Elicia J. Herz and Vanessa K. Burrows.
56 Ibid.
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As ultimately resolved then, this legislative and regulatory activity appears to preserve states’
ability to use Medicaid funding under the TCM and rehabilitative services option for children in
foster care largely as it existed prior to the enactment of the DRA of 2005. However, states
reported a 37% decline in child welfare agency spending of Medicaid dollars—primarily for these
two Medicaid options (as well as Medicaid-funded therapeutic foster care)—between state fiscal
year 2006 and state fiscal year 2010.57 Among the 46 states able to report these data in both years,
spending declined from $1.6 billion in state fiscal year 2006 to $1.0 billion in state fiscal year
2010.58
Separately, while the DRA of 2005 gave states the option to impose premiums or other cost
sharing requirements for some Medicaid beneficiaries and to enroll some in benchmark or
benchmark-equivalent coverage plans, Congress acted to ensure that these options did not apply
to children in foster care. Instead, children in foster care (like most other nondisabled Medicaid-
eligible children) must remain free of any beneficiary cost-sharing requirements59 and states are
not permitted to require mandatory enrollment of children in foster care in benchmark or
benchmark-equivalent benefit packages, which typically cover fewer services than traditional
Medicaid benefit packages.60
Medicaid Eligibility for Children and Families with
Current or Past Child Welfare Involvement

Below is a discussion of the major Medicaid eligibility pathways available to current and former
foster children and youth. (These pathways are summarized in greater detail in Appendix B.)
Notably, four pathways are specifically available for this population—a mandatory pathway for
children if they qualify for the Title IV-E program (whether in foster care or after leaving foster
care for adoption or legal guardianship); an optional pathway for certain children who are adopted
(primarily from foster care) and who receive adoption assistance funded wholly by the state; an
optional pathway for young adults up to the age of 21 who were in foster care at age 18; and a

57 Kerry DeVooght with Megan Fletcher, Brigitte Vaughn & Hope Cooper, Federal, State and Local Spending to
Address Child Abuse and Neglect in SFYs 2008 and 2010,
” Child Trends with support from Annie E. Casey Foundation
and Casey Family Programs (June 2012), pp. 28-30, 36. As part of this survey, states were asked to report only on
Medicaid spending for which the state child welfare agency provided the non-federal matching dollars (this excludes
funding for basic health care services such as those covered by EPSDT). States reported spending child welfare dollars
to match Medicaid expenditures most frequently under the rehabilitative services option, TCM, and for Medicaid-
funded therapeutic foster care. “Other” Medicaid spending by child welfare agencies included, for example, Medicaid
administration and transportation.
58 Ibid. All dollars were adjusted for inflation and represent 2010 dollars.
59 Section 1916A(b)(3) of the Social Security Act provides that states may not impose premiums or cost sharing on
children who receive federal assistance (whether foster care, adoption assistance, or guardianship) under Title IV-E of
the Social Security Act (regardless of their age) and further that they may not impose such cost on any child under age
18 who is in foster care and for whom aid or assistance is made available under Title IV-B of the Social Security Act.
Because any child in foster care is eligible for services under Title IV-B this provision would appear to effectively
apply to any child in foster care.
60 Section 1937(a)(2)(viii) of the Social Security Act. The statute provides that states may not require enrollment in a
benchmark plan for any individual who is in foster care and for whom aid or assistance is made available under Title
IV-B of the Social Security Act and for any individual who is receiving assistance (whether foster care, adoption
assistance, or guardianship) under Title IV-E of the Social Security Act (regardless of age). Because any child in foster
care is eligible for services under Title IV-B this provision would appear to effectively apply to any child in foster care.
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new mandatory pathway, available beginning on January 1, 2014, for young adults up to the age
of 26 who were in foster care at age 18. Current and former foster children and youth may also
qualify for Medicaid through other mandatory and optional pathways that are available to
categories of eligible individuals.61 This section also addresses possible Medicaid coverage for
the families who come into contact with child welfare services.
Children in Foster Care
Mandatory Pathways
Under Title IV-E of the Social Security Act, the federal government reimburses states for a part of
the cost of administering a foster care program and providing foster care maintenance payments
(covering costs of room, board, and incidentals) and related child placement services on behalf of
eligible children in foster care. The primary mandatory Medicaid pathway for children in foster
care applies only to those children who qualify for assistance under the Title IV-E program.62
Specifically, Title IV-E requires that a child in foster care (1) meet income/assets tests and family
structure rules in the home he/she was removed from; (2) be subject to specific judicial
determinations related to reasons for the removal and other aspects of his/her removal and
placement in foster care; (3) be placed in an eligible licensed setting with an eligible provider(s);
and (4) be under the age of 18, or, if the state the youth resides in has elected this option, age 19,
20, or 21 (provided a youth of this age meets certain education, work, or other specified
requirements).63
Other mandatory pathways available to children in foster care who are not eligible for Medicaid
under the Title IV-E category include poverty-related pathways for children under age six in
families with incomes at or below 133% FPL, and children ages six through 18 in families with
incomes below 100% FPL.64 Young adults ages 18 through 20 who are in foster care may also be
eligible under mandatory pathways that are available to adults generally, including pregnant
women with income at or below 133% FPL.

61 The Centers for Medicare & Medicaid Services (CMS) will consolidate certain existing mandatory and optional
eligibility groups into two categories: (1) parents and other caretaker relatives; and (2) pregnant women; and children
effective January 1, 2014. Beginning in 2014, these consolidated eligibility groups will rely on the modified adjusted
gross income (MAGI) income counting rule when determining eligibility. (See U.S. Department of Health and Human
Services, “Medicaid Program: Eligibility Changes Under the Affordable Care Act of 2010; Final Rule,” 77 Federal
Register
57, March 23, 2012.)
62 Section 1902(a)(10)(A)(i)(I) of the Social Security Act. See also Section 473(b) of the Social Security Act.
63 Nearly all states may provide federal Title IV-E assistance to youth who remain in foster care up to their 19th
birthday if the youth is completing high school or an equivalent education or training credential. As of FY2011, states
may seek reimbursement for the cost of providing foster care to eligible youth until age 19, 20, or 21, at the state’s
option. States must amend their Title IV-E state plan to indicate their intention to provide such assistance and may seek
reimbursement for a youth age 18 or older who is completing high school or a program leading to an equivalent
credential; enrolled in an institution that provides post-secondary or vocational education; participating in a program or
activity designed to promote, or remove barriers to, employment; or employed at least 80 hours per month (i.e., part-
time). States may also seek reimbursement for an older youth’s foster care if the youth has a medical condition that
makes him or her incapable of participating in the activity, and this incapacity is supported by regularly updated
information in the youth’s case plan. For further information, see CRS Report RL34499, Youth Transitioning from
Foster Care: Background and Federal Programs
, by Adrienne L. Fernandes-Alcantara.
64Beginning January 1, 2014, ACA requires states to increase the mandatory Medicaid income eligibility level for
poverty-related children ages 6 to 19 from 100% FPL to 133% FPL (as applied under prior law to children under age
6).
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Both children and older youth in care may also be eligible under other mandatory pathways,
including the Supplemental Security Income (SSI) eligibility pathway for certain individuals with
severe disabilities,65 and the Section 1931 pathway available to members of low-income families
that meet the financial requirements (based on family size) of the former Aid to Families with
Dependent Children (AFDC) program, as in effect on July 16, 1996.66 Under Section 1931 of the
Social Security Act, states may cover higher-income families by increasing the 1996 financial
threshold to account for inflation or by using additional disregards that reduce income countable
toward the threshold. States can also scale back on eligibility by using a lower threshold in effect
as of 1988.
Optional Pathways
A child in foster care who is not eligible for a mandatory pathway may be covered under several
optional Medicaid eligibility groups. The major coverage option is known as the Ribicoff
pathway, named for the late Senator Abraham Ribicoff. Ribicoff children are under the age of 21
(or under the age of 20, 19, or 18 as the state chooses) and meet the income and resource
requirements for the former AFDC program but do not meet other “dependent child” eligibility
requirements for that program. (For example, they may be living alone, or they may be older than
age 17, or older than 18 if in high school). The Ribicoff pathway allows the state to extend
Medicaid eligibility to youth in foster care under the age of 21, or at state option under the age of
20, 19, or 18 as the state may choose.67) Through this pathway, states can opt to cover all eligible
children or “reasonable categories” of children, including children residing in institutions or
children or youth in foster care placements or adoptive homes who are not eligible to receive Title
IV-E assistance but receive support funded solely by the state. Under this option, parental income
does not apply to children who do not reside with their parents.
States may also use other optional pathways that are available to children and adults generally to
provide Medicaid coverage to children in foster care. One such pathway is available to infants
(and pregnant women) in families with incomes between 133% and 185% FPL. States can also
take up what are known as Medicaid expansions under the State Children’s Health Insurance
Program (CHIP) that provide coverage to infants and children through age 18 in families with
higher incomes. Another optional pathway is for children with high medical expenses that can be
deducted from income. Such deductions allow them to meet applicable Medicaid financial
requirements. This is referred to as the “medically needy” pathway. Any state that opts to provide

65 The SSI eligibility pathway described above is not limited to children with disabilities; it may include individuals of
any age who are blind or disabled and are receiving SSI.
66 States are required to continue providing Medicaid coverage to families who lose Medicaid eligibility under Section
1931 due to increased child or spousal support collections or due to an increase in earned income or hours of
employment. This continuation is available for a limited time period and is known as transitional medical assistance
(TMA).
67 Based on a 2005 review of state Medicaid plans and amendments, 26 states provided Medicaid coverage to children
and young adults through this pathway: 22 states provided coverage through age 20, one provided coverage through
age 19, two states provided coverage through age 18, and one state provided coverage through age 17. For further
information, see Abigail English, Amy J. Stinnett, and Elisha Dunn-Georgiou, Health Care for Adolescents and Young
Adults Leaving Foster Care: Policy Options for Improving Access
, Center for Adolescent Health & the Law, February
2006, p. 5, http://www.cahl.org/PDFs/FCIssueBrief.pdf. A 2006 review of state Medicaid plans and amendments (and
other documents) found that 15 states used the Ribicoff option to cover children and young adults through age 20. For
further information, see Harriette B. Fox, Stephanie J. Limb, and Margaret A. McManus, The Public Health Insurance
Cliff for Older Adolescents
, The National Alliance to Advance Adolescent Health, Fact Sheet No. 4, April 2007,
http://www.thenationalalliance.org/jan07/factsheet4.pdf.
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medically needy coverage is required to extend that coverage to children under age 18, pregnant
women, certain newborns, and certain other specified, protected persons. Other groups can be
included as well, such as children ages 18 through 20.68 Finally, states that want to provide
coverage to adult groups beyond what the law allows may seek approval from the Centers for
Medicare & Medicaid Services (CMS) for Section 1115 waivers.69 This coverage may provide
access to a more limited set of benefits than what would be available under Medicaid state plan
services. Section 1115 waivers could be available to former foster care youth ages 18 through 20
who do not otherwise qualify for Medicaid.
Medicaid Eligibility in Practice
According to a nationally representative study of children in foster care that examined Medicaid
eligibility, approximately 76% of children were determined eligible for the program based on
mandatory eligibility pathways, another 23% were determined eligible based on optional
eligibility pathways adopted by the state (or county), and less than 1% were ineligible for
coverage.70 Of those children eligible under the mandatory federal pathways, three-quarters were
eligible because they qualified for Title IV-E foster care (i.e., roughly 57% of all children in foster
care). Another 11% of those children in foster care who were eligible on a mandatory basis
qualified through a pathway linked to SSI; and approximately 14% qualified because their
families had very low income.
In this same study, nearly all respondents (state and county health and child welfare officials)
reported that there were mechanisms in place to ensure that children received health care
coverage immediately upon entering foster care. Most (93%) reported that Medicaid eligibility
could be established through presumptive eligibility.71 Other mechanisms for minimizing delays
in Medicaid enrollment included minimizing the time required to initiate the Medicaid application
by child welfare staff (80%); a computer link between the child welfare and Medicaid agencies
(70%); trained child welfare staff to certify for eligibility (57%);72 and uniform intake
applications for child welfare and Medicaid (50%).
This study also examined timing of application for coverage and recertification of eligibility.
Officials reported that applications for Medicaid were made immediately for 36% of children
entering foster care (even though nearly all of these respondents also reported that mechanisms

68 A 2006 review of state Medicaid plans and amendments (and other documents) found that 16 states covered 19- and
20-year olds in their medically needy programs. See Harriette B. Fox, Stephanie J. Limb, and Margaret A. McManus,
The Public Health Insurance Cliff for Older Adolescents, The National Alliance to Advance Adolescent Health, April
2007, p. 3, http://thenationalalliance.org/jan07/factsheet4.pdf.
69 Section 1115 of the SSA authorized the Secretary of Health and Human Services (HHS) to waiver certain statutory
requirements for conducting research and demonstration projects that further the goals of Medicaid and/or CHIP.
70 Anne M. Libby et al., “Child Welfare Systems Policies and Practices Affecting Medicaid Health Insurance for
Children: A National Study,” Journal of Social Science Research, vol. 33, no. 2 (2006), p. 33.
71 Under presumptive eligibility states may enroll individuals for a limited period of time before completed Medicaid
applications are filed and processed.
72 However, actual Medicaid eligibility determinations must be made by the state Medicaid agency except in cases of
states that have CMS approval to rely on a finding from specified “Express Lane” agencies (e.g., those that administer
programs such as Temporary Assistance for Needy Families (TANF), CHIP, and the Supplemental Nutrition
Assistance program (SNAP)) to determine whether a child under age 19 (or an age specified by the state not to exceed
21 years of age) has met one or more of the eligibility requirements necessary to determine an individual’s eligibility
for medical assistance under Medicaid or CHIP.
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were in place to ensure immediate coverage upon entering care). Applications were made for 33%
of children within seven days of entering foster care; and applications were made for the
remaining 31% of children seven days or more after entering care. With regard to the frequency
of redetermination for Medicaid eligibility, 64% of respondents reported that recertification
happens annually without regard to the child’s foster care placement setting; approximately one-
fifth reported recertification every six months.
Young Adults Who Were Formerly in Foster Care
Mandatory Pathways
Like children in foster care, youth age 18 and older who were formerly in care may be Medicaid
eligible under mandatory pathways. These young adults can gain coverage through one of the
mandatory eligibility pathways described above that are available to adults generally. For
example, if former foster youth meet certain income and other criteria, they may qualify under the
pathways available to low-income pregnant women and adults with disabilities who are eligible
for SSI.
Mandatory Pathway Effective in 2014
Effective January 1, 2014, ACA73 adds a new mandatory Medicaid eligibility group that will
include individuals
• under 26 years of age;
• not eligible or enrolled under existing Medicaid mandatory eligibility groups, or
who are described in any of the existing Medicaid mandatory eligibility groups
but have income that exceeds the upper income eligibility limit established
under such group;
• were in foster care under the responsibility of the state on the date of attaining
18 years of age (or a higher age at the state’s option); and
• were enrolled in the Medicaid state plan or under a waiver while in foster care.
This language appears to enable former foster youth to qualify for this pathway if they are not
eligible for the other mandatory pathways.74
ACA also allows states to make “presumptive eligibility” determinations for individuals eligible
for the new mandatory foster care pathway to Medicaid. That is, states may enroll such
individuals for a limited period of time before completed Medicaid applications are filed and
processed. (Such individuals must then formally apply for coverage within a certain timeframe to
continue receiving Medicaid.) This new group of former foster care youth will also be exempt
from mandatory enrollment in Medicaid benchmark plans and will instead receive traditional

73 Section 2001 of ACA contains requirements related to the Medicaid expansion group.
74 Section 2004 (as amended by Section 10201) of ACA contains requirements related to Medicaid coverage for youth
who age out of foster care .This provision excludes and does not refer to the new mandatory eligibility pathway up to
133% FPL created under Section 2001 of ACA (P.L. 111-148).
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Medicaid benefits.75 Finally, ACA requires state plan services rendered to individuals in this new
mandatory eligibility group for former foster care youth to be matched at the state’s regular
Federal Medical Assistance Percentage (FMAP) rate.76
This new mandatory coverage category for youth aging out of foster care is distinct from the
Medicaid expansion requirements and related to coverage for the ACA expansion group up to
133% FPL.77 The U.S. Supreme Court targeted the ACA expansion group in National Federation
of Independent Business (NFIB) v. Sebelius
.78 In that decision, the Court held that the federal
government cannot terminate current Medicaid federal matching funds if a state refuses to expand
its Medicaid program to include the ACA expansion group. If a state accepts the new ACA
Medicaid expansion funds, it must abide by the new expansion coverage rules, but, based on the
Court’s opinion, it appears that a state can refuse to participate in the expansion without losing
any of its current federal Medicaid matching funds. In other words, states must have a “genuine
choice” to accept or reject the new ACA expansion funds and requirements that come with those
funds. The Supreme Court’s decision did not specifically affect, change, or limit any other
Medicaid or ACA provisions; it merely limited the Secretary of Health and Human Service’s
enforcement mechanism for states that do not participate in the ACA expansion. The Supreme
Court’s decision leaves enforcement of other provisions of ACA intact, including the new
coverage group created by ACA for youth aging out of foster care.79 Accordingly, all states are
expected to comply with new mandatory coverage category for youth who have aged out of foster
care as of January 1, 2014.
Optional Pathway
In states that utilize the “Chafee option”—named for the late Senator John. H. Chafee—youth
who meet the definition of “independent foster care adolescent” may be eligible for Medicaid.
The law defines an “independent foster care adolescent” as someone who is under the age of 21,
was in foster care under the responsibility of the state on his or her 18th birthday, and meets the
income or resource criteria established by a state (if any).80 States that elect to provide Medicaid
through the Chafee option may further restrict such eligibility based on any “reasonable” criteria,

75 Beginning in 2006, as an alterative to traditional benefits, states were given the option to provide what are called
“benchmark” benefit packages to certain Medicaid subpopulations. In general, benchmark benefit packages may cover
fewer benefits than traditional Medicaid, but there are some requirements, such as coverage of EPSDT services and
transportation to and from medical providers, that make them more generous than the benefits that would be available
to children through a typical private health insurance plan.
76 For more information on Medicaid FMAP, see CRS Report RL32950, Medicaid: The Federal Medical Assistance
Percentage (FMAP)
, by Alison Mitchell and Evelyne P. Baumrucker.
77 Section 2001 of ACA (P.L. 111-148 contains requirements related to the Medicaid expansion group. Requirements
related to Medicaid coverage for youth who age out of foster care are included in Section 2004 (as amended by Section
10201) of ACA.
78 567 U.S. ___ (2012), available at http://www.supremecourt.gov/opinions/11pdf/11-393c3a2.pdf. See also CRS Legal
Sidebar, Health and Medicine, “Conditioning Federal Grants after NFIB v. Sebelius,” posted July 3, 2012 and “To Be
or Not to Be a ‘New Program?’ What Does NFIB v. Sebelius Mean for Implementation of the Medicaid Expansion
Provision?,” posted July 7, 2010, by Kathleen S. Swendiman.
79 For more information, see CRS Congressional Distribution Memo, Selected Issues Related to the Effect of NFIB v.
Sebelius on the Medicaid Expansion Requirements in Section 2001 of the Affordable Care Act
by Kathleen S.
Swendiman and Evelyne P. Baumrucker.
80 Section 1905(w) of the Social Security Act. States are not required to establish income or resources limits for these
youth but if they do they may not set those tests lower than the test provided in Section 1931(b) of the Social Security
Act.
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including whether or not the youth had received Title IV-E funding.81 However, this optional
pathway for youth who age out will be supplanted starting in 2014, when states are required to
provide Medicaid coverage to young people under age 26 who age out of foster care.
Medicaid Eligibility in Practice
Based on a 2008 survey of state child welfare staff in 45 states, 29 states (64.4%) had extended
the Chafee option to eligible youth. Of the 28 states that responded to a follow-up question about
eligibility requirements, 25 reported that youth must have been in foster care on their 18th
birthday to be eligible; 15 reported that youth must complete an application to be eligible; one
state said that youth are automatically eligible; and nine states reported other (unspecified)
eligibility criteria (e.g., enrollment in an education program).
Of the 45 states surveyed, the 15 states that had not taken up the Chafee option reported that
former foster youth could be eligible for CHIP (six of the states) or Medicaid through other
pathways (13 of the states). States reported that youth were eligible for Medicaid through meeting
the “medically needy” criteria (seven states), through a 100% state funded program (three states),
and through other unspecified pathways (three states). One state reported that former foster youth
are not categorically eligible for Medicaid.82
Children Who Leave Foster Care for Adoption or Guardianship
Mandatory Pathway
Under the Title IV-E program, eligible children who leave foster care for placement in a new
permanent home—via adoption or legal guardianship with a relative—are eligible for Medicaid
under the mandatory Title IV-E pathway.83 The income and resources of the adoptive parents or
relative guardians must not be considered under this pathway. Further, children moving from
receipt of a Title IV-E foster care maintenance payment to coverage under a Title IV-E adoption
assistance agreement or receipt of Title IV-E kinship guardianship assistance payments must not
be required to submit a new application for Medicaid eligibility, and they remain eligible for
Medicaid (without redetermination) for as long as a Title IV-E adoption assistance agreement on
their behalf remains in effect or for as long as they are receiving Title IV-E kinship guardianship
assistance payments.84 In general, once it is established a state must maintain a Title IV-E

81 Section 1902(a)(10)(A)(ii)(XVII) of the Social Security Act.
82 Amy Dworsky and Judy Havlicek, Review of State Policies and Programs to Support Young People Transitioning
Out of Foster Care
, University of Chicago, Chapin Hall Center for Children, 2009, p. 11, http://www.wsipp.wa.gov/
pub.asp?docid=08-12-3903. A 2006 survey of state human service officials by the American Public Human Services
Association (APHSA) found that 17 states reported extending Medicaid coverage to eligible youth through the Chafee
option. For further information, see Sonali Patel and Martha A. Roherty, Medicaid Access for Youth Aging Out of
Foster Care
, American Public Human Services Association, 2007, http://www.aphsa.org/Home/Doc/Medicaid-Access-
for-Youth-Aging-Out-of-Foster-Care-Rpt.pdf. Puerto Rico was not included in this analysis.
83 Section 1902(a)(10)(A)(i)(I) of the Social Security Act. See also Section 473(b) of the Social Security Act.
84 See Association for Administrators of the Interstate Compact on Adoption and Medical Assistance (AAICAMA)
FAQ at http://aaicama.org/cms/medicaid-docs/Medicaid_4E_Med_Application.pdf. See also HHS, CMS, Family and
Children’s Health Programs Group, Letter to Associate Regional Administrators [regarding Medicaid eligibility
impacts of the Fostering Connections to Success and Increasing Adoptions Act of 2008 (P.L. 110-351)], April 15, 2009
available at http://aaicama.org/cms/medicaid-docs/Medicaid_4E_Med_Application.pdf.
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adoption assistance agreement until a child’s 18th birthday or (at state option, or on a case-by case
basis) up to age 19, 20, or 21—assuming, in either case, that the adoptive parent(s) remain legally
responsible for the child and are providing support to the child. The same age provisions apply
with regard to Title IV-E kinship guardianship payments (again, providing that a relative guardian
continues to have legal responsibility for the child and is providing support to the child).85
Adoption Assistance
States that operate a Title IV-E program are required to enter into an adoption assistance
agreement with the adoptive parent of each child who is determined by the state to have “special
needs.” All children who are eligible for Title IV-E adoption assistance must be determined to
have special needs. Additional eligibility rules for Title IV-E adoption assistance (related
primarily to the income and resources of the home from which the adopted child was previously
removed to foster care) are being phased out (based primarily on the age of the child at the time
of adoption). However, those income and resource rules will continue to apply to some children
until FY2018.86
A “special needs” determination by the state child welfare agency must include findings that the
child cannot be returned to his/her parents and that there is a factor or condition specific to the
child—such as the child’s age; membership in a sibling group; race and ethnicity, medical
condition; or a physical, emotional, or mental disability—that makes it “reasonable to conclude”
that the child will not be adopted without provision of adoption assistance and/or medical
assistance. Finally, unless it is not in the child’s best interest (for instance, because of significant
bonding with foster parents), the state must also determine that reasonable but unsuccessful
efforts to place the child for adoption without such assistance have been made.87
Kinship Guardianship Assistance
States that operate a Title IV-E program are not required to provide kinship guardianship
assistance but may choose to do so. To be eligible for Title IV-E kinship guardianship assistance,
a child must have been eligible to receive Title IV-E foster care maintenance payments while in
foster care and been living (for at least six consecutive months) with the prospective relative
guardian. Further, the state child welfare agency must have determined that neither returning
home (to biological parents) nor placement for adoption are appropriate permanency plans for the

85 States that want to provide Title IV-E assistance (of any kind) to eligible youth beyond their 18th birthday (or 19th if
youth is completing high school) must generally, amend their Title IV-E plan to permit these claims. 4See Section
475(8) of the Social Security Act and related guidance in HHS, ACF, ACYF-CB-PI-10-11. However, on a case-by-case
basis (and without amending its Title IV-E plan), a state may maintain a Title IV-E adoption assistance agreement, or
continue to provide Title IV-E kinship guardianship assistance payments, for a youth (up to age 21) if the state
determines that the youth has a mental or physical disability that warrants this continued assistance. See Section
473(a)(4)(A) of the Social Security Act.
86 For information on phase in of broader adoption assistance eligibility see CRS Report RL34704, Child Welfare: The
Fostering Connections to Success and Increasing Adoptions Act of 2008
, by Emilie Stoltzfus. The statute also provides
Title IV-E adoption assistance eligibility for any child with “special needs” (described above) who is 1) eligible for
SSI; or 2) the child of a youth in foster care (provided that youth is eligible for Title IV-E assistance).
87 States determine specific “special needs” factors that are not explicitly required in federal law. For state-by-state
information on determination of special needs see http://www.childwelfare.gov/adoption/adopt_assistance/
questions.cfm?quest_id=1.
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child; the child has a strong attachment to the relative guardian; and the relative guardian has a
strong commitment to providing permanent care for the child.88
Optional Pathways
Federal child welfare policy requires states to provide health insurance coverage (either Medicaid
or another program with comparable benefits) to any child on whose behalf they have in place a
(state-funded) adoption assistance agreement.89 These are adopted children who meet the state
definition of “special needs” but do not meet other Title IV-E eligibility criteria (e.g., income or
asset rules tied to their biological family). States may use a variety of the optional pathways
similar to those available for children in foster care to provide Medicaid or CHIP coverage to
these adopted children. However, under these pathways the income and resources of the adoptive
parents or guardian would generally be counted in determining eligibility.
One notable exception is available to a child (1) for whom the state child welfare agency has
entered into an adoption assistance agreement with his/her adoptive parent or parents; (2) for
whom the state child welfare agency has determined there is a pre-existing need for special or
medical rehabilitative care that would preclude the child’s adoption absent medical assistance;
and (3) who at the time the adoption assistance agreement was executed met certain “needy”
criteria (i.e., Medicaid eligible or Title IV-E income eligible).90 In states that elect to provide this
optional coverage, children who receive wholly state-funded adoption assistance are Medicaid
eligible without regard to the income or resources of their adoptive parents.91 Only one state
(New Mexico) has not taken the specific Medicaid optional pathway offered for state-funded
adoptions. It appears this optional eligibility pathway may largely be supplanted by the
mandatory Title IV-E pathway as of FY2018. That is the year in which new Title IV-E adoption
assistance eligibility criteria included in the Fostering Connections to Success and Increasing
Adoptions Act of 2008 (P.L. 110-351) will be fully phased in. Those new eligibility criteria
provide that Title IV-E assistance is available to any adopted child for whom the state determines
there are “special needs.”

88 Section 471(a)(28) and 473(d) of the Social Security Act. A child who is at least age 14 must be consulted before
placement in a kinship guardianship. Siblings of a child eligible for Title IV-E kinship guardianship may also be
eligible if they are placed, appropriately, in the same kinship guardianship arrangement. Further any child who was
receiving guardianship assistance under a Title IV-E waiver as of September 30, 2008 remains eligible for kinship
guardianship assistance. As implemented by HHS, state may define eligibility for kinship guardianship assistance (in
their state Title IV-E plan) in a more restrictive manner than the broadest federal eligibility criteria. See HHS, ACF,
ACYF-CB-PI-10-11, issued July 9, 2010 http://www.acf.hhs.gov/programs/cb/laws_policies/policy/pi/2010/
pi1011.htm.
89 Section 471(a)(21) of the Social Security Act.
90 Section 1902(a)(10)(A)(ii)(VIII) of the Social Security Act. See also AAICAMA FAQs on Medicaid and state-
funded adoption assistance at http://aaicama.org/cms/index.php/frequently-asked-questions-faqs/medicaid-and-state-
funded-aa.
91 All states but New Mexico are believed to have taken this Medicaid option. See “AAICAMA, COBRA
Option/Reciprocity as of October 2011.” A state child welfare agency may elect to limit state-funded adoption
assistance based on the income or resources of a parent. However, the Medicaid agency may not base eligibility on
income and resources of adoptive parents if the state child welfare agency has entered into a (state-funded) adoption
assistance agreement with the family and provided the state has elected to take this optional Medicaid category.
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Interstate Application
A Title IV-E adoption assistance or kinship guardianship assistance agreement remains in effect
between a state child welfare agency and the adoptive parents (or relative guardian) even if the
adoptive family (or relative guardian) moves out of state and the Title IV-E (child welfare) agency
in the state that originally entered into the agreement continues to be responsible for providing
any adoption or guardianship assistance promised in that agreement. By contrast, a child for
whom a Title IV-E adoption assistance agreement is in effect is eligible for Medicaid coverage in
the state where the child is residing.92 For example, if a child is placed out-of-state in a residential
facility, the state where that facility is located becomes responsible for Medicaid coverage of the
child, while the state where the child’s adoptive parents live continues to be responsible for any
payments under the Title IV-E adoption assistance agreement.93 The Interstate Compact on
Adoption and Medicaid Assistance, which has been adopted by 49 states and the District of
Columbia, governs procedures by which Medicaid coverage of adopted children may be
transferred between states.94
While continued Medicaid coverage of Title IV-E eligible children who move across state lines is
required under federal law, children who are Medicaid eligible under a state-funded adoption
assistance agreement are not automatically assured Medicaid coverage if they move to another
state. However, some states do offer this coverage to some or all children with state-funded
adoption assistance agreements who move to a different state.95
Possible Coverage for Child Welfare-Involved Families
ACA’s attention to health insurance coverage and enrollment could affect other populations
served by the child welfare agency. States will likely vary in how they implement the required
and optional changes to Medicaid law. Therefore, it is not entirely clear how states will address
health insurance coverage for children who come in contact with child welfare services—even if
they are not removed from their homes—and their families. The following brief discussion
highlights some areas that may provide new opportunities for serving child welfare-involved
children and their families.
Children and Families Served in the Home
Child welfare agencies—principally through investigations or other assessments related to alleged
child abuse or neglect—come into contact with many more children beyond those who enter
foster care. Research indicates that this larger group of children—including children who remain
in their homes after an investigation––have greater health care needs than the general

92 Section 9529 of the Consolidated Budget and Reconciliation Act (COBRA) of 1985 (P.L. 99-272) made this
residency stipulation applicable to any child receiving Title IV-E assistance (whether foster care or adoption
assistance). See also 42 CFR 435.403(g).
93 For more information, see related AAICAMA FAQs at http://aaicama.org/cms/index.php/frequently-asked-
questions-faqs.
94 Wyoming is the only state not a part of the ICAMA. AAICAMA, “COBRA Option/Reciprocity as of October 2011.”
For more information on ICAMA see http://aaicama.org/cms/index.php/the-icama.
95 AAICAMA FAQ, “What is meant by the term COBRA reciprocity in reference to state-funded adoption assistance
and Medical assistance?” http://aaicama.org/cms/medicaid-docs/Medicaid_SF_COBRA_rec.pdf
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population.96 In a nationally representative study of children who came into contact with child
welfare services and remained in the home, with or without services, caregivers reported that 78%
of children were in excellent or very good health, compared to 84% of children generally.97
Further, these children tended to live in homes with little income. Close to 60% were in homes
with income below the poverty level.98 The parents or caregivers of children who remain in the
home following a child welfare investigation also had significant health and mental health needs.
In fact, such caregivers were less likely to report having excellent or very good health (45%
versus 68%) than adults generally, including caregivers of children who were removed from the
home. Although these caregivers mostly had mental health outcomes similar to adults in the
general population, they were more likely to have major depression within the past 12 months
(25% versus 7%).99
At the same time, children in families who come into contact with child welfare services but are
not placed in foster care are less likely to be enrolled in Medicaid than those children who are
placed in foster care. Using supplemental data from the same study referenced above, researchers
found that of the children who remained in their own homes following an investigation of abuse
or neglect, about 66% were covered under mandatory Medicaid eligibility pathways and another
18% were covered through optional Medicaid pathways. Approximately 16% were ineligible for
Medicaid. The study also found that less than 1% of children in foster care were ineligible for
Medicaid.100
The emphasis in health care reform on enrollment of all individuals, including low-income
families who do not qualify for Medicaid or CHIP, may provide new opportunities for child
welfare agencies to ensure access to health insurance coverage for a greater share of the children
and adults they serve. For example, families could gain access to counseling through Medicaid,
which may in turn strengthen these families and reduce the risk of abuse and neglect.
Families of Children Entering Foster Care
ACA may also provide greater opportunities for a child welfare agency to provide mental health
or other Medicaid-supported services to the parents of children entering foster care. These
services may be required so that the child and parents can be reunited. However, under existing

96 Post-investigative services are provided in the home or community and are intended to strengthen the family, among
other purposes. These services can include respite care for parents and other caregivers; caseworker visits and other
casework provided or arranged supports for the family; early developmental screening of children to assess needs and
to provide assistance in obtaining relevant services; mentoring, tutoring, and health education for youth; a range of
center-based activities (informal interactions in drop-in centers, parent support groups); services designed to increase
parenting skills; and counseling and home visiting activities. Federal funding for these services is provided primarily
through programs under Title IV-B of the Social Security Act.
97 U.S. Department of Health and Human Services, Administration for Children and Families, Office of Planning,
Research and Evaluation, National Survey of Child and Adolescent Well-Being (NSCAW) II Baseline Report: Child
Well-Being
, pp. 3-4, 17, August 1, 2011.
98 U.S. Department of Health and Human Services, Administration for Children and Families, Office of Planning,
Research and Evaluation, National Survey of Child and Adolescent Well-Being (NSCAW) Baseline Report: Introduction
to NSCAW II
, p. 10, August 1, 2011.
99 U.S. Department of Health and Human Services, Administration for Children and Families, Office of Planning,
Research and Evaluation, National Survey of Child and Adolescent Well-Being (NSCAW) II, Baseline Report:
Caregiver Health and Services
, pp. 4-5, 19-22, August 1, 2011.
100 Anne M. Libby, “Child Welfare Systems Policies and Practices Affecting Medicaid Health Insurance for Children:
A National Study,” p. 44.
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Medicaid rules (until 2014), parents whose children are placed out-of-home may be vulnerable to
losing eligibility for Medicaid because of the change in their household composition. The
mandatory eligibility rules for Medicaid generally provide that in addition to being low income,
applicants must be living with their children (or be pregnant, disabled, or elderly). Thus, a child’s
placement in foster care could mean a potential loss of Medicaid for the parent and a loss of
access to services that may be needed to allow the child(ren) to return to living with the parent.
Prior to ACA, states could opt to cover childless adults under Section 1115 demonstration
waivers. Otherwise, childless adults were ineligible for the Medicaid program. States that
implement the new ACA expansion pathway for certain low-income adults under age 65 should
ensure an eligibility pathway remains open for any low-income adult—regardless of whether that
adult’s child is placed in foster care.
Private Health Insurance Reforms Affecting the
Child Welfare Population

According to a nationally representative survey of children in families who come into contact
with the child welfare system, approximately 63% of those who were insured had Medicaid
coverage and another 26% had private insurance. The remaining children (10%) were uninsured.
At the three-year follow-up, those with private insurance remained at 26%, those with Medicaid
coverage increased slightly to 67%, and those without insurance declined to 6%.101
Private health insurance also plays a significant role for children who are adopted or who age out
of foster care. With respect to adopted children who were previously in foster care, a survey of
adoptive parents found that 94% were continuously insured for the prior 12 months, with 37%
through private health insurance.102 A separate study of former foster youth in three states showed
that by age 26, nearly six out of 10 had health insurance. Of those who had coverage, just over
20% had private insurance from an employer or through the individual health insurance market
(see Table A-1 in Appendix A).103
Furthermore, the research literature has found that individuals with a child welfare history may
struggle to maintain health insurance or have medical conditions that limit their ability to obtain
insurance. For example, a study of such youth ages 18 through 20 in eight Midwestern counties
found that 67% lost health insurance coverage within an average of three months of leaving foster

101 Each set of numbers totals 99% because of rounding. Ramesh Raghaven et al., “Longitudinal Patterns of Health
Insurance Coverage Among a National Sample of Children in the Child Welfare System,” American Journal of Public
Health, March 2008, vol. 98, no. 3.
102 This same 2007 survey found that 75% of children adopted from foster care had an adoption assistance agreement
with the state child welfare agency that included Medicaid. This means that some of the 37% of children adopted from
foster care who were covered by private insurance were also covered by Medicaid. In these instance, Medicaid may
provide wrap around for services not covered by the private health insurance plan. Sharon Vandivere, Karin Malm, and
Laura Radel, Adoption USA: A Chartbook Based on the 2007 National Survey of Adoptive Parents, Washington, D.C.,
U.S. Department of Health and Human Services (HHS), Office of the Assistance Secretary of Planning and Evaluation
(ASPE), 2009, pp 23-24; and Karin Malm, Sharon Vandivere, Amy McKlindon and Laura Radel, “Children Adopted
from Foster Care: Adoption Agreements, Adoption Subsidies, and Other Post-Adoption Supports,” HHS, ASPE
Research Brief, May 2011, p. 8.
103 Courtney et al., Midwest Evaluation of the Adult Functioning of Former Foster Youth: Outcomes at Age 26.
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care and only about one-fourth of those regained coverage after an average period of eight
months.104 The prevalence of chronic conditions in persons that have been in foster care has been
estimated to be between 44% and 82%.105
Given the role private insurance plays in the lives of many individuals with experience in the
child welfare system, the rules governing that market for health insurance are relevant to this
population, especially those with physical and/or mental health care needs. Prior to ACA, the
ability of many individuals to gain and maintain coverage in the private market was limited to
some degree by the health status of the individual. For example, prior to health care reform, some
insurance applicants with a preexisting condition could be denied coverage altogether; be issued
coverage that excluded benefits that would treat the preexisting condition; or be charged more in
premiums because of that condition, then allowed under state and federal law at the time.
Selected Private Health Insurance Reforms under ACA
ACA includes reforms that are designed to provide additional private coverage options to
individuals and families generally, while prohibiting certain insurance practices such as excluding
coverage for preexisting health conditions.106 The ACA insurance reforms discussed below may
be particularly relevant for young adults who were formerly in foster care, children who leave
care and are reunited with their families, parents of children who are or were in foster care, and
parents of children who are adopted from foster care. These reforms are grouped according to
effective date—“immediate”107 or 2014.
“Immediate” Health Insurance Reforms and Programs
With the high prevalence of health conditions (chronic and acute) in individuals with experience
in the child welfare system, ACA’s temporary high risk pools (HRPs) are one potential insurance
option.108 The temporary HRP program is intended to provide transitional coverage for uninsured
individuals with preexisting conditions until January 1, 2014, when ACA’s insurance reforms,
including the prohibition against preexisting condition exclusions, become fully effective.109 The
temporary federal HRP program can be administered by either the state or the U.S. Department of
Health and Human Services (HHS). The HHS-administered temporary HRPs are collectively

104 Ramesh Raghavan, Peichang Shi, Gregory A. Aarons, Scott C. Roesch, and J. Curtis McMillen, “Health Insurance
Discontinuities Among Adolescents Leaving Foster Care,” Journal of Adolescent Health, Volume 44, Issue 1, pp. 41-
47 (January 2009).
105 Sandra Jee, Richard Barth, Moira Szilagyi, Peter Szilagyi, Masahiko Aida, and Matthew Davis, “Factors Associated
with Chronic Conditions among Children in Foster Care,” Journal of Health Care for the Poor and Underserved, 2006,
vol. 17, no. 2, pp.328-341.
106 Prior to ACA’s new insurance reforms, many states had already taken related steps in reforming their own insurance
markets. Post-ACA enactment, states retain the role of primary regulator of the business of insurance. Therefore, each
state decides the extent to which it will actively monitor and enforce ACA’s market reforms, in addition to other
applicable federal and state requirements.
107 ACA was enacted on March 23, 2010. Immediate is generally applicable to plan or policy years beginning on or six
months after ACA enactment, i.e., as of September 23, 2010. Many plan or policy years follow the calendar year, but
there is no requirement regarding which month a plan or policy year must begin or end.
108 For additional information about the temporary high-risk pool program, see CRS Report R41235, Temporary
Federal High Risk Health Insurance Pool Program
, by Bernadette Fernandez.
109 Section 1201 of the Patient Protection and Affordable Care Act (ACA); Section 2704 of the Public Health Services
Act (PHSA).
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known as the Pre-Existing Condition Insurance Plan (PCIP) and are operated by the Government
Employees Health Association, Inc. (GEHA), a nonprofit insurance carrier.110 States that operate
their own temporary HRPs may use a different name and insurance carrier.111 To be eligible for
the temporary HRPs, an individual must have a preexisting condition, as determined by HHS, and
be a citizen or national of the United States or be lawfully present in the United States. Eligible
individuals must also have been without “credible coverage” for a six-month period prior to the
date on which he or she is applying for coverage through the federal HRP program.112
ACA includes several other “immediate” insurance reforms that are particularly relevant to the
child welfare population. For example, ACA prohibits (1) lifetime limits113 on the dollar value of
essential health benefits,114 and (2) annual limits on those same benefits, but allows limits defined
by HHS as “restricted.”115 ACA also generally prohibits the retroactive cancellation of coverage,
except in cases where the covered individual committed fraud or made an intentional
misrepresentation.116 In addition, ACA currently prohibits coverage exclusions for preexisting
health conditions117 in children under age 19 (as of January 1, 2014, ACA will prohibit coverage
exclusions for preexisting health conditions for all individuals regardless of age).
Children age 18 and older who were formerly in foster care, including those who are adopted,
may also have expanded private insurance coverage opportunities through extension of coverage
from an insured parent. Health plans that provide dependent coverage must extend that existing
coverage to children under age 26. However, certain health plans are exempt from this
requirement if the adult child has an offer of coverage from his/her employer.

110 Government Employees Health Association, Inc., “Pre-Existing Condition Insurance Plan administered by GEHA:
Benefits Summary,” July 2010, available at http://www.pciplan.com/forms/pdfs/BenefitsSummary.pdf.
111 For a listing of the state-administered temporary HRPs, see http://www.healthcare.gov/law/features/choices/pre-
existing-condition-insurance-plan/index.html.
112 Creditable coverage is defined by Section 2701(c) of the PHSA as a group health plan, health insurance coverage,
Medicare Part A or Part B, Medicaid, coverage from the Department of Defense, a medical care program of the Indian
Health Service (IHS), a state health benefits risk pool, the Federal Employee Health Benefits Program (FEHBP), a
public health plan (as defined in regulations), or a health benefit plan under the Peace Corps Act.
113 Limits essentially cap the amount that a plan will pay out for medical claims, either over the course of an
individual’s life or on an annual basis. Once a covered individual reaches the dollar value limit, s/he is fully responsible
for all additional medical expenses.
114 ACA requires certain health plans to provide “essential health benefits.” Such benefits were not explicitly listed in
the law. Instead, ACA listed ten broad benefit categories, meant to establish a federal floor with respect to minimum
level of benefits covered by a plan.
115 ACA allows health plans to impose annual dollar limits, prior to 2014, but they are restricted according to amounts
specified in regulation. The interim final rule on annual limits adopts a three-stage approach for the restricted annual
limits. Under these regulations, annual limits may not be less than the following amounts: (1) for plan years beginning
on or after September 23, 2010, but before September 23, 2011: $750,000; (2) for plan years beginning on or after
September 23, 2011, but before September 23, 2012: $1.25 million; and (3) for plan years beginning on or after
September 23, 2012, but before January 1, 2014: $2 million.
116 This insurance practice is known as “rescission.” It is not a common practice, but if a policy is rescinded, it
generally occurs after a policyholder has generated large medical claims. Usually the insurer attributes those claims to a
medical condition that existed prior to the policyholder obtaining health coverage. In such instances, an insurer will
generally justify the rescission by claiming that if it knew about the policyholder’s preexisting condition during the
insurance application process, it would not have issued the insurance policy in the first place.
117 A “preexisting health condition” is a medical condition that was present before the date of enrollment for health
coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or received before such
date.
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With respect to other circumstances and characteristics of the child seeking coverage through a
parent’s insurance, the interim final rule on ACA’s dependent coverage provisions clarified that a
health plan may not deny or restrict coverage for a child who has not attained age 26 “based on
the presence or absence of the child’s financial dependency (upon the participant or any other
person), residency with the participant or with any other person, student status, employment, or
any combination of those factors.”118 Moreover, health plans “may not limit dependent coverage
based on whether a child is married.”119 Still, young adults who leave foster care (and are
otherwise ineligible under the new mandatory Medicaid pathway beginning in 2014) may not
necessarily gain coverage under this reform measure, given that some of these young people may
not have relationships (or may have strained relationships) with their parents or their parents may
not have access to employer sponsored health insurance.
Health Insurance Reforms and Programs Effective in 2014
ACA establishes the American Health Benefits Exchanges (‘‘exchanges’’) that will be operational
beginning in 2014. Exchanges will not be insurers, but will provide individuals and small
businesses with access to private health insurance plans. In general, exchange plans will provide
comprehensive coverage and meet all applicable market reforms specified in ACA. Nearly all
individuals will be allowed to purchase insurance in the exchanges. These exchanges could
benefit parents of children who return home from foster care and of children adopted from care,
as well as individuals that have aged out (as long as they meet the eligibility criteria).120
Also beginning in 2014, federal tax credits will be made available to certain low-to-middle
income individuals and families to make exchange coverage more affordable. In addition, some
of those tax credit recipients will receive subsidies to reduce their out-of-pocket spending on
medical expenses. Such financial assistance may be particularly relevant to youth who age out
and the parents of children who return home from foster care or are adopted from care.
A number of ACA’s insurance reforms are designed to provide protection to potentially
vulnerable groups with a high prevalence of preexisting conditions, such as youth previously in
foster care. Among ACA’s reforms are provisions that will subject most health plans to the
following requirements:
• Exclusion of coverage for preexisting health conditions is prohibited, regardless
of the age of the covered individual. (Excluding coverage for preexisting
conditions refers to the practice in which an applicant is offered a health
insurance policy but that policy does not provide benefits for certain medical
conditions.)
• Basing eligibility for coverage on health status-related factors is prohibited.
(Such factors include health status; medical condition, including both physical
and mental illness; claims experience; receipt of health care; medical history;

118 “Interim Final Rules for Group Health Plans and Health Insurance Issuers Relating to Dependent Coverage of
Children to Age 26 Under ACA,” Federal Register, Vol. 75, No. 92, May 13, 2010, p. 27136, available at
http://www.regulations.gov/contentStreamer?objectId=0900006480aecb7d&disposition=attachment&contentType=
html.
119 Ibid., p. 27124.
120 Individuals may enroll in an exchange plan if they are (1) residing in a state in which an exchange was established;
(2) not incarcerated, except individuals in custody pending the disposition of charges; and (3) lawful residents.
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genetic information; evidence of insurability, including conditions arising out of
acts of domestic violence; disability; and any other health status-related factor
determined appropriate by HHS).
• Waiting periods greater than 90 days are prohibited. (A “waiting period” refers
to the time period that must pass before an individual is eligible to obtain health
benefits.)
• Coverage is required to be offered on a guaranteed issue and guaranteed
renewal basis. (“Guaranteed issue” in health insurance is the requirement that a
health plan accept every applicant for health coverage as long as the applicant
accepts the terms of the coverage, such as the premium. “Guaranteed renewal”
in health insurance is the requirement that a plan renew group coverage at the
option of the plan sponsor (e.g., employer) or individual coverage at the option
of the policyholder. Guaranteed issue and renewal alone would not guarantee
that the insurance offered is affordable.)
• The use of adjusted community rating rules is required.121 (“Adjusted, or
modified, community rating” prohibits health plans from pricing insurance
based on health factors, but allows pricing to be based on other key
characteristics such as age or sex.) Under the law, premiums will be allowed to
vary based on the following factors: self-only or family enrollment; geographic
area; age (within limits); and tobacco use (within limits).
• Imposing annual cost-sharing requirements that exceed specified dollar values
is prohibited beginning in 2014. These cost-sharing limits would be annually
adjusted thereafter by the rate of growth in health insurance premiums.122
Issues and Challenges
While federal policies regarding child welfare, Medicaid, and private health insurance seek to
address the unique health-related issues facing individuals in the child welfare system, challenges
to ensuring the health care needs of these children are met remain.
Cross-Agency Collaboration
A multi-state study of health care services by children in foster care (carried out by the
Department of Health and Human Services (HHS), Office of the Inspector General (OIG) from
2003-2005) suggested a role for both state child welfare and Medicaid agencies in improving
health care services.123 The OIG found that access to health care services for children in foster
care who are Medicaid beneficiaries may be hampered by lack of Medicaid providers (or

121 Section 1201 of ACA (new PHSA Section 2701).
122 Section 1302(c) of ACA.
123 The HHS/OIG conducted these studies in eight states and made findings and recommendations specific to issues
identified in each of those state. (The reports are available on the reports publications website of the HHS OIG website
http://oig.hhs.gov.) For overall recommendations see HHS, OIG “Children’s Use of Health Care Services While in
Foster Care: Common Themes,” Memorandum to Susan Orr, Associate Commissioner for the Children’s Bureau, ACF
and Dennis G. Smith, Director of CMS, from Brian Ritchie, Acting Deputy Inspector General for Evaluation and
Inspections, July 2005 (OEI-07-00-00645).
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providers of a specific service) in a given area; failure of child welfare caseworkers and foster
care providers to know about Medicaid services as well as the state time tables for provision of
those services; failure of state Medicaid and child welfare agencies to fully document services
provided; and failure of state child welfare agencies to provide complete health care information
to foster care providers. Additionally, a more recent study finding that not all child Medicaid
beneficiaries received the preventive screenings covered by EPSDT and suggested a lack of
knowledge on part of Medicaid providers about what those screenings are to include may be a
part of the reason.124
With the 2008 enactment of the Fostering Connections to Success and Increasing Adoptions Act
(P.L. 110-351), federal law requires each state to ensure that the child welfare agency and the
agency that administers Medicaid work together to develop a health oversight and coordination
plan applicable to each child in foster care. Given the distinct roles played by the state child
welfare agency (which acts as a de facto parent to children in foster care) and the state Medicaid
agency (which provides health insurance coverage to foster children, along with many other
vulnerable populations) the exact nature of the collaboration is uncertain.
Federal guidance on how to accomplish cross-agency cooperation in the implementation of the
health care oversight plan has been limited. However, a November 2011 joint letter from the
administrators of ACF, CMS and SAMHSA to their state-level counterparts provides some
concrete examples primarily in the context of better overseeing the use of psychotropic
medication for youth in foster care.125 Awareness raising, training, and technical assistance –
including opportunities for agency leaders to meet – are highlighted for all three agencies (and
their state level counterparts). For example, ACF plans to provide more resources related to
recommended guidelines for medication oversight and to instruct state child welfare agencies on
preparing and including protocols for use of psychotropic medication in state planning
documents; SAMHSA is committed to finalizing guidelines for use of psychotropic medication
for children and youth for community service providers; and CMS intends to continue efforts to
refine and develop children’s health care quality measures (including measures related to
behavioral health) as well as working with states to use Drug Utilization Review to help monitor
drug prescriptions, including psychotropic medications.
The November 2011 letter also suggests ways that additional health oversight plan items might be
acted on – including efforts to adopt use of the medical home concept by state Medicaid agencies
(as permitted by Section 2703 of ACA); further development of electronic health records use by
these agencies; and development of additional resources by SAMHSA for health and mental
health providers related to both addressing trauma and engaging youth in their treatment.
While this letter is suggestive of ways that collaboration might happen, guidance on collaboration
related to many items of the health oversight plan is not available126 and agencies may be

124 HHS, OIG, “Most Medicaid Children in Nine States Are Not Receiving All Required Preventive Screening
Services,” May 2010 (OEI-05-08-00520).
125 Joint HHS Letter from George Sheldon, Acting Assistant Secretary, ACF; Donald Berwick, Administrator, CMS;
and Pamela Hyde, Administrator, SAMHSA to “State Director,” November 23, 2011. http://www.childwelfare.gov/
systemwide/mentalhealth/effectiveness/jointlettermeds.pdf
126 For example, the oversight plan refers to communicating with youth leaving foster care about issues involving
serious illness and death and helping them execute legal documents. Child welfare agencies may lack expertise to do
this work (especially for youth with cognitive disabilities) and in developing educational resources for the youth, child
welfare agencies might look to the state Medicaid agency and/or the Attorney General’s office (or other legal
(continued...)
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challenged to find the resources, including time, for establishing and maintaining collaboration
around improving the quality of health care for children in foster care.
Communicating Across Programs
Both Medicaid and the child welfare program authorized under Title IV-B and Title IV-E of the
Social Security Act are federal-state programs with complex federal policy and data reporting
requirements. Currently even the most basic language used in one program (both in the statute
and/or for purposes of data reporting) does not translate to the other.
For example, for the state child welfare agency a child in foster care generally means a child for
whom a court has given the agency 24-hour care and placement responsibility. Once the court
relieves the state child welfare agency of that responsibility (either because the child with court
sanction leaves care to a permanent home via adoption, guardianship, or reunification, or because
the child reaches the state age of majority and is “emancipated” by the court) the child is no
longer considered a child in foster care. By contrast for purpose of reporting Medicaid data to the
federal government, “foster care children” appear primarily determined by Medicaid’s mandatory
Title IV-E eligibility pathway. 127 This group of beneficiaries includes some children in foster care
(only the part of a state’s foster care caseload that is eligible for Title IV-E foster care assistance),
as well as children who leave foster care for adoption or legal guardianship (provided those
children meet a different set of Title IV-E eligibility criteria).
In FY2010 about 70% of the children receiving Title IV-E assistance were, in fact, children who
had left foster care for adoption. Therefore the major mandatory eligibility category – referred to
in the Medicaid program as serving “foster care children” may well include more adopted
enrollees than foster care enrollees.128 Further many other children who are in foster care (as
understood by the child welfare agency) but who do not meet the Title IV-E eligibility criteria and
who therefore are enrolled in Medicaid via other eligibility pathways (e.g., low income or SSI)

(...continued)
department) for assistance. (This issue was raised by state officials at a July 20, 2010 meeting convened by the
HHS/ACF regarding older youth in foster care and those who age out of foster care.)
127 For purposes of reporting state Medicaid data to the federal government (via MSIS) children who are classified as
“foster care children” include 1) children eligible under the mandatory pathway tied to Title IV-E eligibility (including
those eligible for Title IV-E adoption, foster care, and kinship guardianship assistance; 2) children covered under the
optional pathway related to state-funded adoption assistance agreements; and 3) youth who age out of care
(“independence adolescents”) and are covered by the Chafee option. While there is also reference in the MSIS
codebook (release 3.1, August 2010) to including “children with special needs covered by State foster care payments”
in the foster care children eligibility category, in the absence of any specific statutory or regulatory citation that
indicates who is included in that group (and given that federal child welfare policy does not seem to include a concept
of “special needs children in foster care”), it is unclear how it might be interpreted at the state level. The statutory and
regulatory cites referred to in the MSIS codebook for “foster care children” are 1) Section 1902(a)(10)(A)(i)(I) of the
Social Security Act and Section 42 CFR 435.145 (for the mandatory Title IV-E pathway); 2) Section
1902(a)(10(A)(ii)(VIII), as added by Section 9529 of P.L. 99-272 (for the state-funded adoption assistance pathway);
and 3) [Section 1902(a)(10)(A)(ii)(VXII), as added by Section 121 of the] Foster Care Independence Act of 1999 (for
Chafee option youth).
128 At the same time data reported in MSIS is primarily concerned with Medicaid beneficiaries, rather than enrollees.
There is some reason to believe that Title IV-E children in foster care may be more frequent beneficiaries than those
who are Title IV-E children receiving adoption assistance. That’s because the latter group appears more likely than the
former to be covered by both private insurance and under Medicaid’s third party liability rules, the private insurer
would be required to pay any covered benefit before Medicaid may be held liable. For more information see Appendix
B.

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may not be understood by Medicaid administrators as children in foster care. This could affect the
ability to understand research on services provided to children in foster care (across both
agencies) as well as ability of Medicaid to administer requirements applicable to children in foster
care without regard to their Title IV-E eligibility (e.g., restrictions on TCM claiming related to
any child in foster care, or prohibition on mandatory enrollment in benchmark programs also
eligible to any child in foster care).
Additionally, changes to federal child welfare policy made by the Fostering Connections to
Success and Increasing Adoptions Act of 2008 (P.L. 110-351) broadened Title IV-E eligibility and
consequently expanded the pool of children eligible for mandatory Medicaid enrollment. In some
instances the broadened eligibility is applicable across all states (but on a phased in basis) and in
other instances it is tied to state child welfare agency options (i.e., the agency may amend its Title
IV-E plan to include certain additional groups of children as eligible). To ensure access to and
continuity of Medicaid enrollment for these new groups of eligible children, state child welfare
agencies may need to communicate the changes made in their Title IV-E plan to the state
Medicaid agency.129
Disruptions in Medicaid Coverage for Children in Foster Care and
Leaving Care

While nearly all children in foster care are eligible for Medicaid, some may receive this coverage
immediately upon placement but, coverage may lapse when they change placements, including
when they return home to their families. Children who enter care may not gain Medicaid
coverage if they are in care for a shorter period than the amount of time it takes to establish
Medicaid eligibility. As discussed above, researchers found that nearly all states had mechanisms
to minimize enrollment delays (including immediate or presumptive eligibility), but in nearly a
third of child welfare cases, applications for Medicaid were submitted at least seven days after the
child entered foster care.130
Children may also lose Medicaid coverage when they return home to their parents. In a nationally
representative study of children in families who come into contact with the child welfare system,
researchers found that the child’s placement in foster care—and not characteristics of the child or
a caregiver (a parent or foster care caregiver)—was most influential in whether a child retained
Medicaid coverage. Children in foster care placements were more likely to gain coverage,
because eligibility while they are in care is frequently based on their eligibility status for federal
foster care under Title IV-E of the Social Security Act. At the same time, those who transitioned
back to their own homes were more likely to lose Medicaid coverage.131 Discharge from foster
care would prompt a Medicaid eligibility review that might result in a loss of coverage if an
alternative eligibility pathway (i.e., other than the child’s eligibility for the Title IV-E foster care
program) could not be established.

129 This issue is raised in HHS, CMS, Family and Children’s Health Programs Group, Letter to Associate Regional
Administrators [regarding impacts on Medicaid eligibility from the Fostering Connections to Success and Increasing
Adoptions Act of 2008] (P.L. 110-351), April 15, 2009. Available at http://aaicama.org/cms/federal-docs/
CMS_MA_Elig_FostConnect_0409.pdf.
130 Anne M. Libby et al., “Child Welfare Systems Policies and Practices Affecting Medicaid Health Insurance for
Children: A National Study,” pp. 44-45.
131 Ramesth Raghaven et al., “Effects of Placement Changes on Health Insurance Stability Among a National Sample
of Children in the Child Welfare System,” Journal of Social Service Research, vol. 35, no. 4, pp. 352-363.
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A 2003 report from the Kaiser Commission on Medicaid and the Uninsured identified procedural
barriers to maintaining Medicaid that can produce gaps in health care coverage for children who
return home after being reunified with their parent(s).132 Among the challenges cited were
frequent eligibility reviews and paperwork, complex forms for renewing coverage, cumbersome
renewal procedures, and lack of coordination upon renewal for children whose eligibility shifts
between Medicaid and separate CHIP programs. In addressing loss of Medicaid eligibility for
children in care, the report suggests that states should monitor the loss of coverage at foster care
discharge through the state’s existing process for reviewing cases of children whose Medicaid
coverage has been terminated, denied, or suspended. As part of this process, states could also
monitor changes in Medicaid coverage for specific subpopulations through what are known as
alternative case action reviews. Such reviews could be targeted to children in care to learn more
about the extent to which children leaving care lose Medicaid coverage and the reasons for losing
such coverage.
Implementation of the New Pathway for Young Adults Formerly in
Foster Care

The requirement that states provide Medicaid coverage to youth who have aged out of foster care
up to their 26th birthday parallels a requirement made by ACA that applies to the private health
insurance sector. Specifically, the law requires health insurance carriers to allow (but not require)
most children under age 26 to enroll in their parent’s health plan. The effective dates for these
provisions vary, however. This requirement became effective in 2010 for some plans. In contrast,
the Medicaid pathway for former foster youth becomes effective on January 1, 2014. In short,
some of these young adults may not have coverage for at least a few years (and in fact may age
out during that time), while others without coverage may be more likely to gain coverage via their
biological parents’ insurance plans, if their parents have access to such a plan. In a study of
former foster youth in Midwest states who were age 23 or 24 in 2008 and 2009 (before ACA was
enacted), about 2% had coverage under their parents’ plan compared to about 13% of their same-
age peers.133 By age 26 (in 2010 and 2011, as the private health insurance requirement was going
into effect), about 1% to 2% of former foster youth and their same-age peers were covered
through their parents’ insurance.134 This could be due to the fact that at the time of the study,
nearly all of the young people would not have been eligible to be covered under their parents’
plan by virtue of reaching age 26.
Although the intent of the law may be to extend a new Medicaid eligibility pathway to any young
person who was in foster care on their 18th birthday (or a higher age at the state’s option), the
provision raises questions. For example, would a youth be eligible if she/he lives in a state that
allows young people to remain in foster care beyond age 18 but that youth decides to leave care
upon reaching age 18? Age 18 is the legal age of majority in most states. If a state extends care
until age 21, it is unclear whether former foster youth who exited at age 18 or 19 would be

132 Pat Redmond, Center on Budget and Policies Priorities for the Kaiser Commission on Medicaid and the Uninsured,
Children Discharged from Foster Care: Strategies to Prevent the Loss of Health Coverage at a Critical Transition,
January 2003, pp. 11-16, http://www.kff.org/medicaid/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=
14317.
133 Courtney et al., Midwest Evaluation of the Adult Functioning of Former Foster Youth: Outcomes at Ages 23 and 24.
134 Courtney et al., Midwest Evaluation of the Adult Functioning of Former Foster Youth: Outcomes at Age 26.
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eligible under the new pathway. Also, would a young person be eligible through this pathway if
they aged out prior to 2014 and are under the age of 26 when this provision takes effect?
Varying Income Counting Rules Across Medicaid Eligibility
Pathways

Unlike nearly every other mandatory Medicaid eligibility pathway, income rules do not always
apply for certain child welfare populations. Specifically, the Medicaid provision (effective on
January 1, 2014) for young adults who age out of foster care does not require those youth to meet
any income rules. Further, under current law, the adoptive parents or legal relative guardians of
children who have left care but remain eligible for Title IV-E kinship guardianship assistance
payments or adoption assistance agreements also do not need to meet any income rules in order
for those children to be eligible for Medicaid. However, for children receiving Title IV-E foster
care maintenance payments or Title IV-E kinship guardianship assistance payments there are
income eligibility rules that are tied to the home from which the child was removed to foster care.
Income eligibility rules tied to a child’s “home of removal” currently apply, as well, to a declining
share of those children covered by Title IV-E adoption assistance agreements. (This means the
income of the child’s biological—rather than their adoptive family—is relevant to his/her
Medicaid eligibility pathway.) However, changes made in federal child welfare policy will
effectively remove (as of FY2018) all income rules associated with Medicaid eligibility of a child
on whose behalf a Title IV-E adoption assistance agreement is in place. (Those rules however are
to be retained for children in foster care as well as those who leave foster care for guardianship.)
Further, beginning in 2014, income eligibility for most Medicaid eligibility groups will be based
on Modified Adjusted Gross Income (MAGI).135,136 The transition to MAGI income counting
rules for most Medicaid-eligible populations (e.g., most nondisabled children, parents, pregnant
women, and other caretaker relatives) was intended, in part, to reduce the variability and
complexity of the definition of income under the current Medicaid program.137 The new MAGI
income counting rules will make the Medicaid program’s categorical eligibility requirements
moot for most individuals. However, Congress chose to retain (or create new) categorical
eligibility criteria for certain Medicaid-eligible populations. Specifically, and among others
groups, categorical eligibility requirements were retained for some children in foster care, most
children who leave foster care for adoption, some children who leave foster care for kinship
guardianship, and (as of January 1, 2014) all youth who age out of foster care. The categorical
eligibility criteria tied to some of these populations include income and resource rules that do not
conform to MAGI. Going forward, it remains to be seen how Medicaid agencies will balance the
move toward administrative simplicity promoted by the use of MAGI, while continuing to
capture the detailed information necessary to make the categorical and financial distinctions that

135 MAGI is defined as the Internal Revenue Code’s (IRC’s) adjusted gross income (AGI) plus certain foreign earned
income and tax-exempt interest. AGI reflects a number of deductions, including trade and business deductions, losses
from sale of property, and alimony payments, increased by tax-exempt interest and income earned by U.S. citizens or
residents living abroad.
136 For information on modifications to the MAGI income counting rule that were enacted subsequent to ACA’s
enactment see CRS Report R41997, Definition of Income in ACA for Certain Medicaid Provisions and Premium
Credits
, coordinated by Janemarie Mulvey.
137 See U.S. Department of Health and Human Services, “Medicaid Program; Eligibility Changes Under the Affordable
Care Act of 2010,” 76 Federal Register 51142, August 17, 2011.
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will be required in determining Medicaid eligibility for groups that are exempt from the MAGI
income counting criteria.138
Balancing State Fiscal Constraints
Beginning in 2014, states will have a choice as to whether they will accept or reject the new ACA
expansion funds and requirements that come with those funds to extend Medicaid coverage to
certain individuals under the age of 65 with income up to 133% FPL. States that choose to extend
coverage to the ACA expansion group may enable more families with children in foster care to
qualify for Medicaid. Medicaid (and CHIP) program rules provide states with numerous tools to
promote enrollment, retain coverage, and facilitate eligibility renewal (e.g., state use of electronic
data matches to obtain or verify information at the time of enrollment and/or renewal; reliance on
presumptive eligibility determinations to enable certain Medicaid-eligible populations to receive
care until a formal eligibility determination has been completed; use of 12 months of continuous
eligibility regardless of fluctuations in family income, assets, or other circumstances; etc.).139 In
general, states also use these same tools to reduce program enrollment and control program costs
during times of fiscal constraint.140 While ACA includes enhanced federal matching funds to
assist states with some of the costs associated with anticipated program growth, states will likely
face an increase in their Medicaid spending. Thus, state fiscal challenges will continue to be a
primary focus as states attempt to balance the costs associated with Medicaid’s future expanded
role in providing insurance coverage for low-income populations and ongoing state fiscal
pressures during economic downturns.
Accessing Private Health Insurance
ACA includes several “immediate” private health insurance reforms that are particularly relevant
to this population. For example, ACA prohibits (1) lifetime limits on the dollar value of essential
health benefits and (2) annual limits on those same benefits, except for limits defined by HHS as
“restricted.” Prior to ACA, the ability of many individuals to gain and maintain coverage in the
private market was limited to some degree by their health status. However, youth aging out of
foster care may continue to struggle to obtain private health insurance until full implementation of
ACA’s insurance reforms and programs in 2014, including the establishment of American Health
Benefits Exchanges. These exchanges will provide new opportunities for individuals to access
private health insurance, and provide access to premium tax credits and cost-sharing subsidies
offered through the exchanges to make coverage in the private insurance market more affordable
for former foster youth who are no longer eligible for Medicaid.

138 See U.S. Department of Health and Human Services, “Medicaid Program: Eligibility Changes Under the Affordable
Care Act of 2010; Final Rule,” 77 Federal Register 57, March 23, 2012.
139 For more information on state use of these and other eligibility and enrollment simplification strategies, see Kaiser
Commission on Medicaid and the Uninsured, Holding Steady, Looking Ahead: Annual Finding of a 50 State Survey of
Eligibility Rules, Enrollment and Renewal Procedures, and Cost Sharing Practices in Medicaid and CHIP, 2010-2011,
January 2011, http://www.kff.org/medicaid/upload/8130.pdf.
140 Because states are prohibited from curbing the cost of Medicaid through restricting eligibility standards,
methodologies, or procedures due to the Maintenance of Effort Requirements (MOE) requirements included in the
American Recover and Reinvestment Act (ARRA, P.L. 111-5) and ACA, states have focused cost containment
strategies on reducing provider rates, making changes to their benefit packages, or implementing limitations on the use
of benefits. However, states want greater flexibility to restrain their Medicaid expenditures through eligibility
restrictions.
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Once the exchanges are operational, this population may struggle to assess all the insurance
options potentially available to them, and to find their way through government and corporate
bureaucracies to obtain the most appropriate coverage. ACA provides consumer assistance for
prospective enrollees in exchanges. Specifically, ACA requires exchanges to establish a grant
program for “Navigators,” which would receive funding from exchanges (not the federal
government) to conduct public education activities. Those activities will include information
about the availability of exchange plans, based on fair and impartial information on enrollment in
plans and subsidies. However, it is not clear which organizations could best serve as Navigators
for this special population, nor what the costs would be. Finally, staff in child welfare and
Medicaid agencies and those who run the state exchanges must be trained to understand the new
law and its implementation in their state to enable them to assist applicants in obtaining
insurance.
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Appendix A. Research on the Health Needs of
Current and Former Foster Children and Youth

Children in Foster Care
As discussed above, children who are placed in foster care are at a higher risk of having a
medical, social, or behavioral disability than children in the general population. Select research
further highlights these health care issues.
In a CRS analysis of 2008 total fee-for-service spending in Medicaid,141 expenditures for
nondisabled children coded as “foster care children”142 in the Medicaid Statistical Information
System (MSIS)143 outpaced expenditures for all other groups of nondisabled children served by
the program. Although these foster care children represented only 3% of the nondisabled
Medicaid child recipients in FY2008, they accounted for 10% of expenditures for all children.144

141 There are two major types of service delivery systems under Medicaid: fee-for-service (FFS) and managed care
(MC). Under a FFS model, states pay providers directly for each covered service received by the Medicaid beneficiary.
Under MC, states typically pay a monthly fee to a managed care plan for each person enrolled in the plan. The
managed care plan then pays providers for the Medicaid services an enrollee receives that are covered in the plan’s
contract. In many cases, these two delivery systems are not entirely independent approaches to providing medical care
under Medicaid. In a number of states, there are hybrid models (such as primary care case management (PCCM)) that
combine various features of fee-for-service and managed care for a given population or set of interrelated services.
Under a PCCM model, providers receive a per-person monthly fee for coordinating each enrollee’s care, but services
are provided through the fee-for-service delivery system. In the PCCM model, the provider acts as a care coordinator
and/or gatekeeper to the services specified under the PCCM contract. In FY2010, comprehensive managed care plans
accounted for nearly 21% of total Medicaid spending on benefits while limited benefit plans and PCCM programs
accounted for less than 3%. (See MACPAC, Report to the Congress on Medicaid and CHIP, March 2011)
142 In the Medicaid Statistical Information System (MSIS), which was used to generate this analysis, the “foster child”
population is both more and less inclusive than how that population is understood for child welfare purposes.
Specifically, the MSIS “foster care child” category includes (1) children for whom the state makes adoption assistance
foster care maintenance payments (and beginning in FY2009) kinship guardianship assistance payments under Title IV-
E of the Social Security Act, (2) children with special needs covered by state foster care payments or under a state
adoption assistance agreement that does not involve Title IV-E, and (3) children who leave foster care due to age. This
definition is less inclusive than a child welfare understanding of the population because it appears to excludes children
who are ineligible for federal foster care maintenance payments under Title IV-E of the Social Security Act (nationally,
this is estimated to be more than half of all children in foster care on a given day). At the same time, it is more inclusive
than a child welfare definition because it includes some children and youth who have left foster care—including
children who leave for adoption (whether they receive Title IV-E assistance or state-only assistance) and those who age
out, presumably under the Chafee option, which is available in some states for children who aged out of foster care
through the age of 21. It is unclear what “children with special needs covered by state foster care payments” means in
MSIS.
143 The Medicaid Statistical Information System (MSIS) is one of the primary federal data sources for the Medicaid
program. MSIS is a national Medicaid enrollment and claims repository and includes information on demographic
characteristics of beneficiaries, service utilization by enrollment group, and payments for benefits. The MSIS consists
of standardized, quarterly submittals of eligibility and claims files from each state to the federal government. These
submissions contain data extracted from states’ claims processing systems, called the Medicaid Management
Information Systems (MMIS). Since 1999, all states have been required to participate in MSIS but not all do.
144 Congressional Research Service (CRS) analysis of MSIS data for FY2008. Non-disabled children were identified as
those Medicaid recipients whose basis of eligibility was reported as “foster care child,” “child,” and “child
(unemployed parent).” There are two ways these data may not capture all expenditures for a given category of service
provided to non-disabled children. First, these variables represent the last basis of eligibility reported for the child
during the year and thus may not capture expenditures associated with an individual who was previously classified
under another Medicaid eligibility category. Second, Medicaid recipients include both those individuals for whom fee-
(continued...)
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CRS analysis of Medicaid program data for that same year found that annual per capita Medicaid
spending for children in foster care (including those adopted from foster care) was $5,694,
compared to $1,891 per nondisabled child recipient and $13,509 per disabled child recipient.145 In
FY2008, just over 46% of all Medicaid fee-for-service spending for children in foster care
(including those adopted from care) was for prescription drugs ($743 million), rehabilitative
services ($660 million),146 inpatient psychiatric care services ($509 million), inpatient hospital
care services ($501 million), and targeted case management ($302 million).147
Given the significant physical and mental health issues faced by children in foster care, this per
capita spending level is not necessarily surprising. Children who are placed in foster care are
more likely to receive mental health care services than similarly situated children who are not
placed in out-of-home care.148 At the same time, some research suggests that per capita spending
for children in foster care may be overstated. One large study that matched foster care
administrative data with Medicaid administrative data found that as many as one-third of all
children who were in foster care after one year were not classified as such in the Medicaid data
system. Further, these incorrectly coded children represented the majority (78%) of children in
foster care who did not use any Medicaid services after entering foster care. Thus, the researchers
concluded that failure to include these incorrectly coded children in the Medicaid spending for
children in foster care “modestly” understated total Medicaid spending for children in foster care,
but it “significantly overrepresented the per-capita health care utilization by individual
children.”149
Still, researchers have identified concerns about access to health care services for children in
foster care. Most Medicaid-eligible individuals under the age of 21 are entitled to early and
periodic screening, diagnostic, and treatment (EPSDT) services, but it appears that not all foster
care children receive these services. The purpose of EPSDT is to ensure screening for physical

(...continued)
for-service claims were paid during the year and those for whom capitation payments were made during the year in the
50 states and the District of Columbia. However, information about service use under capitated service delivery
systems is limited and does not allow for analysis of specific services. (Since 1995, capitated payments have become
more prevalent under Medicaid, primarily enrolling non-disabled adults and children.) Because this analysis necessarily
includes only those services provided under the fee-for-service delivery system, the percent of children receiving a
given service likely underestimates the true share.
145 The MSIS data files generally available do not permit analysis to identify which individuals among those coded as
foster care children also have a disability.
146 Medicaid rehabilitative services include any medical or remedial services recommended by a physician or other
licensed practitioner of the healing arts within the scope of his/her practice under state law for maximum reduction of
physical or mental disability and restoration of a recipient to his/her best possible functional level.
147 Medicaid targeted case management services are defined as services that are furnished to individuals eligible under
the plan to gain access to needed medical, social, educational, and other services.
148 Ramesh Raghaven, et al, “A Preliminary Analysis of the Receipt of Mental Health Services Consistent with
National Standards Among Children in the Child Welfare System,” American Journal of Public Health, April 2010, pp.
742-749.
149 David M. Rubin, et al, “A Sampling Bias in Identifying Children in Foster Care Using Medicaid Data,” Ambulatory
Pediatrics,
May-June 2005, pp. 185-190. An additional data concern arises from the fact that Medicaid administrative
data (MSIS) categorizes both children adopted from foster care and those in foster care as “foster children.” At least
one study based on nationally representative data found that children adopted from foster care had somewhat greater
special health care needs then children in foster care. See U.S. Department of Health and Human Services,
Administration for Children and Families, Office of Planning Research and Evaluation, National Survey of Child and
Adolescent Well-Being (NSCAW), “Special Health Care Needs Among Children in Child Welfare,” Research Brief
No. 7, no date.
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and mental conditions or developmental delays and to pay for that screening, diagnosis, and any
treatment needed to correct or ameliorate any defects or chronic conditions discovered. This may
include payment for services that may not otherwise be covered under a given state’s Medicaid
plan (i.e., optional benefits). However, while a large majority of public child welfare agencies
reported having policies to ensure screening of physical health needs of children entering foster
care (94%), less than half (43%) had policies calling for comprehensive assessments that screened
for any physical health, mental health, and developmental needs of children entering foster
care.150 A series of studies conducted in eight states (during the first half of the 2000s) by the
Office of Inspector General (OIG) at the Department of Health and Human Services concluded
that some children in foster care did not receive the basic services mandated by EPSDT.151
In addition to these reviews by HHS, the Government Accountability Office (GAO) examined
how 10 states addressed challenges in identifying and responding to the health care needs of
children in foster care.152 According to GAO, these states reported that they had policies that
specified the timing and scope of health assessments for children in care, which were intended to
identify their health needs and related follow-up. Further, states took steps to deliver appropriate
health care services to children in foster care, including facilitating access to Medicaid coverage.
This review, however, did not assess the extent to which states are adequately meeting health care
needs of children or whether states are providing adequate services.
Separate from this federal oversight, researchers have raised concerns about findings that children
in foster care are receiving one specific kind of treatment—psychotropic medication—at roughly
three times the rate of all other children served by Medicaid. Although evidence of their clinical
safety and effectiveness for children is often lacking, psychotropic medications are typically
prescribed to address mental, emotional, or behavioral issues ascribed to children in foster care.153
A national study found that as many as 18% of Medicaid-enrolled children in foster care received
psychotropic medication at a given point in time while the comparable percentage for all children
in Medicaid (based on several statewide studies) was 5% to 6%.154 Studies that estimated use of
psychotropic medication for some part of a child’s stay in foster care showed that the medicines
were being prescribed to much higher percentages of these children compared to other Medicaid-
enrolled children or other children who have had contact with child welfare but were not in an
out-of-home placement.155 Some research also shows interstate variation in the prescription of

150 Laurel K. Leslie, et al, “Comprehensive Assessments for Children Entering Foster Care: A National Perspective,”
Pediatrics, July 2003, pp. 134-142.
151 U.S. Department of Health and Human Services, Office of the Inspector General, “Children’s Use of Health Care
Services While in Foster Care: Common Themes,” Memorandum to Susan Orr, Associate Commissioner for the
Children’s Bureau, Administration for Children and Families and Dennis G. Smith, Director of Centers for Medicare
and Medicaid Services, from Brian Ritchie, Acting Deputy Inspector General for Evaluation and Inspections, July 2005
(OEI-07-00-00645).
152 U.S. Government Accountability Office, Foster Care: State Practices for Assessing Health Needs, Facilitating
Service Delivery, and Monitoring Children’s Care
, GAO-09-26, February 2009.
153 Michael Naylor, M.D., Director, Division of Child and Adolescent Psychiatry, “Improving the Quality of Care for
State Wards: The Illinois Department of Children and Family Services Centralized Psychotropic Medication Consent
Unit,” testimony before Subcommittee on Income Security and Family Support, House Committee on Ways and
Means, July 19, 2007.
154 Ramesh Raghavan, et al, “Psychotropic Medication Use in a National Probability Sample of Children in the Child
Welfare System,” Journal of Child and Adolescent Psychopharmacology, Vol. 15, No. 1, 2005, pp. 97-106.
155 Mollie Zito, et al, “Psychotropic Medication Patterns Among Youth In Foster Care,” Pediatrics, July 2008, pp e157-
e163 and U.S. Department of Health and Human Services, Administration for Children and Families, Office of
Planning, Research, and Evaluation, National Survey of Child and Adolescent Well-Being, “Psychotropic Medication
(continued...)
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psychotropic medication that is based on a child’s characteristics rather the child’s mental health
needs.156 Additional research indicates that foster children in one state who qualify for Medicaid
were more likely to receive two or more psychotropic medications simultaneously and for longer
periods of time than children who participate in Medicaid under other pathways. Nearly half of
these foster children used two or more psychotropic medications at the same time. The share of
other medically enrolled children who used two or more of these medications ranged from 13% to
40%.157 Nearly one-fifth of foster children took the medications for 180 days or more; no more
than 14% of children who qualified for Medicaid under other pathways used the medications for
this same amount of time.158
Young Adults Who Were Formerly in Foster Care
The research literature regarding children who age out of foster care shows that physical and
mental health problems persist into adulthood.159 Two studies—the Northwest Foster Care
Alumni Study and the Midwest Evaluation of the Adult Functioning of Former Foster Youth—
have tracked outcomes for a sample of youth across several domains, either prospectively
(following youth in care and as they age out) or retrospectively (examining current outcomes for
young adults who were previously in care and comparing these outcomes to those of young
people in the general population).
Researchers with the Northwest Foster Care Alumni Study interviewed and reviewed the case
files of 479 foster care youth who were in public or private foster care any time from 1988 to
1998 in Oregon or Washington.160 The study compared the mental health status and education and
employment outcomes for the foster care alumni to those of the general population. Over 54% of
foster care alumni had at least one mental health problem—depression, social phobia, panic
disorder, and post-traumatic stress disorder, among others—compared to 22.1% of the general
population.161 About one-quarter of the alumni experienced post-traumatic stress disorder
(PTSD). This figure is greater than the occurrence of PTSD among Vietnam or Iraq War veterans,

(...continued)
Use by Children in Child Welfare,” Research Brief No. 17, 2012, http://www.acf.hhs.gov/programs/opre/
abuse_neglect/nscaw/reports/psychotropic-meds/NSCAW-Psychotropic-Meds-Brief-No-17.pdf.
156 Ramesh Raghavan, et al, “Interstate Variations in Psychotropic Medication Use Among a National Sample of
Children in the Child Welfare System,” Child Maltreatment, vol. 15, no. 1 (May 2010), pp 121-131.
157 This includes foster children who also qualified for Medicaid during the year under another pathway.
158 Researchers examined the use of psychotropic drugs for a period of 30 or more days. This timeframe was intended
to omit children who were tapering off of one drug and introducing another. Susan dosReis et al., “Antipsychotic
Treatment Among Youth in Foster Care,” Pediatrics, vol. 128, no. 6 (December 2011).
159 The studies do not posit that foster care, per se, is associated with the challenges former foster youth face in
adulthood. In fact, children tend to have a range of challenges upon entering care. Wulczyn et al. Beyond Common
Sense
, p. 116.
160 Peter J. Pecora et al., Improving Foster Family Care: Findings from the Northwest Foster Care Alumni Study, Casey
Family Programs, 2005, at http://www.casey.org/Resources/Publications/pdf/ImprovingFamilyFosterCare_FR.pdf. On
average, they interviewed youth who were 24.2 years old, with a range of 20 to 33 years old. The youth tended to have
entered care as adolescents and exited care between the ages of 15 and older. These youth were placed in care prior to
the enactment of the Foster Care Independence Act of 1999 (P.L. 106-169) and most entered care because of sexual
abuse and other type of maltreatment.
161 In a nationally representative study of children ages 11 to 14 entering foster care, 56.1% had a clinical/borderline
score based on the Child Behavior Checklist (CBCL) “total problems” score. Researchers often use the CBCL as a
proxy for measuring mental health concerns. Wulczyn et al., Beyond Common Sense, p. 108.
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which is about 15%. Foster care alumni tended to have recovery rates similar to their counterparts
in the general population for major depression, panic syndrome, and alcohol dependency, but
lower rates of recovery for other disorders such as generalized anxiety disorder, PTSD, social
phobia, and bulimia.
Few foster care alumni studies are prospective, meaning that they follow youth while in care
through the time they leave care and beyond. The Midwest Evaluation is an ongoing study that
tracks approximately 600 former foster youth in three states—Illinois, Iowa, and Wisconsin.162
Table A-1 displays the physical health and mental health outcomes for alumni at ages 25 and 26
compared to their same-age peers in the general population. Overall, youth formerly in foster care
reported having more negative health outcomes than their general population peers and
participating in counseling and substance abuse treatment more often. They were also less likely
than their peers to be covered by employers’ health care plans, and more likely to have public
health insurance.
Table A-1. Comparisons of Select Outcomes Between Young Adults in the Midwest
Study and Young Adults in the Add Health Study
Midwest
Add Health—
Evaluation (Wave
Peers Surveyed
Outcome
4)—Former Foster
Youth at
at Ages 25 and
26
Ages 25 and 26
Description of General Healtha

Excel ent

25.8%

18.5%
Very good

29.4%

40.1%
Good
27.0%

32.7%
Fair
15.6%

7.5%
Poor
2.2%

1.1%
Health Condition or Disability Limits Daily Activitiesa,b
14.8% 8.1%
Mental Health and Behavioral Care Servicesa
(from survey of youth at age 23 and 24)c
Received psychological or emotional counseling

11.3%

6.5%
Attended substance abuse treatment program

5.1%

2.4%
Has Medical Insurancea
58.7%
78.0%
Source of Medical Insurancea




Parents’ insurance

1.2%

2.0%
Spouse’s insurance

6.3%

10.7%
Employer provided insurancea
20.2%

56.3%
School provided insurance

0.9%

3.7%

162 Courtney et al., Midwest Evaluation of the Adult Functioning of Former Foster Youth: Outcomes at Age 26. All of
the surveyed youth entered care prior to their 16th birthday. Surveyed youth responded to researcher questions about
outcomes in five data collection waves, most recently when the youth were age 25 or 26. For each of the data collection
waves, wherever possible, researchers asked the same questions that were taken directly from the National
Longitudinal Survey of Adolescent Health (“Add Health”), a nationally representative survey that tracks a cohort of
youth over time.
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Midwest
Add Health—
Evaluation (Wave
Peers Surveyed
Outcome
4)—Former Foster
at Ages 25 and
Youth at
26
Ages 25 and 26
Purchase own private insurance

1.2%

3.9%
Medicaid or medical assistancea
47.6%

9.4%
State Children’s Health Insurance Program (S-CHIP)

19.6%

n/ad
Other
3.2%

2.3%
Don’t know type of insurance

0%

1.7%
Last Physical Exama




Less than a year ago

66.9%

59.3%
1 to 2 years ago

15.8%

17.1%
More than 2 years ago

16.4%

22.0%
Missing or don’t known

0.8%

1.5%
Did Not Receive Needed Medical Carea
13.0%

22.6%
Source: Congressional Research Service presentation of data in Mark E. Courtney et al., Midwest Evaluation of
the Adult Functioning of Former Foster Youth: Outcomes at Ages 23 and 24
, Chapin Hal Center for Children, University of
Chicago, 2010.
Note: The Midwest Evaluation has tracked the outcomes of foster youth across five waves when these youth
were age 17, age 19, age 21, age 23 and 24, and age 26 (a small number of youth were age 25 or 27). For each of
the data col ection waves, wherever possible, researchers asked the same questions that were taken directly
from the National Longitudinal Survey of Adolescent Health (“Add Health”), a nationally representative survey
that tracks a cohort of youth over time.
a. Indicates that the difference between the youth in the Midwest Evaluation and youth in the Adolescent
Heath Survey is statistically significant.
b. The Add Health Study questions asked whether any health conditions limited their ability to engage in
moderate activities.
c. The Add Health survey instrument for youth surveyed at ages 25 and 26 did not have comparable data.
d. The Add Health Study did not report this figure.
Children Adopted from Foster Care
Children adopted from foster care are those children who were removed from their biological
parents – typically because of abuse or neglect – and for whom reuniting with those biological
parents was determined not possible or not in the child’s best interest. Roughly 50,000 to 55,000
children leave foster care for a permanent adoptive family each year.163 The large majority of
these children (88% in FY2010)164 were determined by the state to have “special needs” that
made it “reasonable” for the state to conclude the child would not be adopted without provision of
an adoption subsidy and/or medical assistance.165

163 HHS, ACF, ACYF, Children’s Bureau, “Trends in Foster Care and Adoption, FY2002-FY2010,” based on data
submitted by states as of June 2011.
164 National percentage calculated by CRS based on HHS, ACF, ACYF, Children’s Bureau, “Child is Identified as
Special Needs Adoption: October 1, 2009 to September 30, 2010 (FY2010),” June 2011.
165 States determine which children have “special needs” within certain federal parameters (included at Section 473(c)
(continued...)
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Greater Health and Mental Health Needs
A nationally representative survey conducted in 2007 found children who were adopted – whether
from foster care, domestically by private arrangement, or from another country – tended to have
greater health and mental health needs than children in the general population.166 Further among
all adopted children those who were adopted from foster care had the greatest needs. For
example, 19% of all children in the nation were reported by their parents as having special health
care needs in 2007, compared to 39% of all children who were adopted and 54% of children
adopted from foster care. Additionally, among children ages 6 though 17, about 1 in 10 (10%) in
the general population had been formally diagnosed with attention deficit disorder (ADD) or
attention deficit hyperactivity disorder (ADHD) at some point and, at the time of the 2007 survey,
the parents of about 1 in 25 children (4%) considered their child’s diagnosed ADD/ADHD
condition to be moderate or severe. The comparable rates among all adopted children in this age
range was more than 1 in 4 ever diagnosed (26%) and roughly 1 in 8 with a current moderate or
severe condition (14%); for those in this age range who were adopted from foster care more than
1 in 3 had ever received an ADD/ADHD diagnosis (37%) and fully 1 in 5 (20%) had a current
moderate or severe condition as reported by their adoptive parents.
The 2007 survey also found that 2% of all adopted children (ages 8 through 17) had spent some
time in a residential psychiatric facility or hospital following their adoption; the comparable share
reported for children adopted from foster care was 7%.167 (Because this question is linked
specifically to services provided after a child was adopted there is no comparable percentage for
children in the general population.) Table A-2 shows these and additional data on the health and
mental health needs of children adopted from foster care compared to all adopted children and
children generally.
More Likely to Have Insurance Coverage
At the same time, children who are adopted are more likely to have had continuous (over past 12
months) health insurance coverage than children in general. The 2007 survey of adopted parents
found that 85% all children had this continuous coverage, compared to 91% among all adopted
children and 94% of children adopted from foster care.168 Federal law provides that the children
adopted from foster care who have “special needs” (which may be but are not necessarily related
to health or mental health needs) are eligible for Medicaid (or a comparable state benefit plan).169

(...continued)
of the Social Security Act). As part of this determination, states must find that a factor or condition specific to the child
would make it reasonable to conclude that a child can not be placed in an adoptive family without adoption assistance
and/or medical assistance. Such factors include the child’s age, membership in a sibling group, race and ethnicity, or
physical, social, or emotional disability.
166 2007 National Children’s Health Survey and related 2007 National Adoptive Parents Survey. For more information
see Sharon Vandivere, Karin Malm, and Laura Radel, AdoptionUSA: A Chartbook Based on the 2007 National Survey
of Adoptive Parents,
HHS, Office of the Assistance Secretary of Planning and Evaluation, 2009, p. 1.
167 Ibid, pp. 21-27, 47-49. See also Tables 7, 8, and 19.
168 Ibid, pp. 22-24. See also Table 7.
169 According to the 2007 National Survey of Adoptive Parents, 92% of children adopted from foster care were the
subject of an adoption assistance agreement between a state and the adoptive parent. Under federal law all of these
children would be expected to be eligible for Medicaid coverage or a comparable public benefit plan. States are
required to enter into an adoption assistance agreement on behalf of any child who meets “special needs” criteria
(Section 473(a)(1)(A) of the Social Security Act), including those who meet all the Title IV-E eligibility criteria and
(continued...)
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Not surprisingly then, public health insurance is the most common form of coverage among
children adopted from foster care. Nearly 6 in 10 (59%) were reported by their adoptive parent as
covered by Medicaid or CHIP – roughly double the 3 in 10 (29%) children generally who were
covered by those public programs.
Although 37% of children adopted from foster care were covered by private insurance coverage,
some of these privately insured children were also enrolled in Medicaid.170 In fact, parents of
children adopted from foster care reported that 65% had ever received a Medicaid benefit, over
half (55%) used Medicaid for dental care, and nearly one out of three (32%) used Medicaid to pay
for mental health services. In those instances where a child is covered by both Medicaid and
private insurance, the law provides that Medicaid is the payer of last resort. This means that the
private insurer must pay any covered benefits first. However, Medicaid coverage could
supplement those benefits (if the private insurance benefits are exhausted) and it might wholly
fund services not covered by private the adopted children’s private insurance carriers (e.g., many
private insurers do not cover residential psychiatric treatment).171
Table A-2. Presence of Certain Health and Mental Health Conditions Among All
Children, All Adopted Children, and Children Adopted from Foster Care
Children
All
Adopted
CONDITION
All
Adopted
From
(Children are ages 0 through 17 years of age unless otherwise noted)
Children
Childrena Foster Care
Special health care need: Parent reported that the child currently
19% 39% 54%
experiences at least one of five consequences attributable to a medical,
behavioral, or other health condition that has lasted or is expected to last
for at least 12 months. The consequences include: 1) ongoing limitations in
ability to perform activities that other children of the same age can
perform, 2) ongoing need for prescription medications, 3) ongoing need
for specialized therapies, 4) ongoing need for more medical, mental health,
or educational services than are usual for most children of the same age,
and 5) the presence of ongoing behavioral, emotional, or developmental
conditions requiring treatment or counseling.

(...continued)
those with special needs who do not meet all of the Title IV-E eligibility criteria. For adoptive children with state-
determined special needs who meet all the federal Title IV-E eligibility criteria federal law provides mandatory
Medicaid eligibility (Section 1902(a)(10)(A)(i)(I) and Section 473(b)(3)(A) of the Social Security Act). For adoptive
children with state-determined special needs who do not meet all the Title IV-E eligibility criteria, federal law requires
states to provide those children with health insurance coverage via Medicaid or another comparable state plan (Section
471(a)(21 of the Social Security Act). States may use a number of optional pathways to provide Medicaid to these
children, including one specifically for such children (Section 1902(a)(10)(A)(ii)(VIII) of the Social Security Act).
170 Seventy-five percent of children adopted from foster care were reported to be covered by an adoption assistance
agreement that included Medicaid coverage. See Karin Malm, Sharon Vandivere, Amy McKlindon and Laura Radel,
Children Adopted from Foster Care: Adoption Agreements, Adoption Subsidies, and Other Post-Adoption Supports,
HHS, ASPE, May 2011, pp. 8-9.
171 Section 1902(a)(25) of the Social Security Act. This is referred to as Medicaid’s “third party liability” rule. In
general, this rule provides that any other program or insurer (e.g., Medicare, employer-sponsored health insurance,
other private insurance, workers compensation, or other federal and state programs) must pay any covered benefit or
service before Medicaid can be made liable for the cost.
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Children
All
Adopted
CONDITION
All
Adopted
From
(Children are ages 0 through 17 years of age unless otherwise noted)
Children
Childrena Foster Care
Diagnosis of Attention Deficit Disorder (ADD) or Attention
4% 14% 20%
Deficit Hyperactivity Disorder (ADHD): Parent of child (ages 6
through 17) was at some point told by a doctor or other health care
provider that the child has ADD/ADHD and at time of the survey the
parent reported the child’s condition was moderate or severe.
Diagnosed with Attachment Disorder: Parent of child was at some
Not
12% 21%
point told by a doctor or other health care provider that the child has
included in
attachment disorder (or reactive attachment disorder). This disorder,
general
which is associated with severe neglect of a young (under age 5) child’s
survey.
basic emotional needs, may make a child be excessively inhibited or
indiscriminately sociable.
Diagnosis of conduct or behavior problems: Parent of child (ages 2
4% 17% 24%
through 17) was at some point told by a doctor or other health care
provider that the child has conduct or behavior problems, and at the time
of the survey the parent reported the condition was moderate or severe.
Child received mental health service(s) since adoption (ages 5
Not
39% 46%
through 17)
applicable.
Child received psychiatric residential treatment/hospitalization
Not
4% 7%b
since adoption (ages 8 through 17)
applicable.
Source: Data are as reported by parents in the 2007 National Children’s Health Survey and the related 2007
National Adoptive Parents Survey as included in Sharon Vandivere, Karin Malm, and Laura Radel, Adoption USA: A
Chartbook Based on the 2007 National Survey of Adoptive Parents,
HHS, Office of the Assistance Secretary of
Planning and Evaluation, 2009.
Note: The difference in percentage shown between all children and all adopted children is statistically significant
for each of these outcome measures. Also, the differences between all adopted children and by private domestic
arrangement and children adopted from another country are statistical y significant unless otherwise noted.
a. Includes children adopted from foster care, those adopted domestically by private arrangement, as well as
those adopted from other countries. However, children adopted by stepparents were excluded from this
analysis.
b. This percentage is significantly different from the share reported for child adopted from another country
but not for domestic, privately arranged adoptions.

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Appendix B. Medicaid Pathways for Current and Former Foster Children
and Youth

Table B-1. Major Mandatory and Optional Medicaid Pathways for Current and Former Foster Children and Youth
Pathway
Key Eligibility Criteria
(Statutory Citation
in Title XIX of the
Income (and Assets for
Social Security Act)
Selected Pathways)a
Age Selected
Other
Major Mandatory Groups
Title IV-E Foster Care Must have been removed from a
Under age 18, or, if still
- Child is removed from home of a parent, or other relative
(§1902(a)(10)(A)(i)(I))
family whose income met the state’s completing high school or
specified in prior law cash welfare program (AFDC).
need standard as it existed on July
equivalent education or
- At removal child is “deprived” of parental care or support
[States that receive Title
16, 1996 for purposes of
training, under age 19;
(i.e., single parent household) or principal earner in two-
IV-E funding (all states
determining eligibility under the
OR
parent household meets unemployment criteria.
do) must provide foster
prior law cash welfare program, Aid
Up to age 19, 20, or 21 in
- A judge determined that removal was necessary because
care maintenance
to Families with Dependent
states that elect to extend
the home was “contrary to the welfare” of the child and that
assistance.]
Children (AFDC). Income standards
foster care to such older
state made reasonable efforts (when required) to prevent
may not be adjusted for inflation.
age. (Older youth must
the removal of the child from his or her home.b
meet certain employment,
- Judge gives care and placement responsibility to the state
Child must have assets under
education, or medical
child welfare agency.
$10,000.
criteria.)
- Child is placed with an eligible caregiver in a licensed

setting (e.g., foster family home, group home, or other

residential institution).

- No less often than every 12 months a judge determines
that the state is making reasonable efforts to achieve a
permanent home for the child.
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Child Welfare: Health Care Needs of Children in Foster Care and Related Federal Issues

Pathway
Key Eligibility Criteria
(Statutory Citation
in Title XIX of the
Income (and Assets for
Social Security Act)
Selected Pathways)a
Age
Selected Other
Title IV-E
Child must have been removed
Under age 18, or, if still
Child met all of the Title IV-E foster care eligibility criteria
Guardianship
from a family whose income met
completing high school or
prior to being placed in legal guardianship with a relative.
Assistance
the state’s need standard as it
equivalent education or
and
(§1902(a)(10)(A)(i)(I))
existed on July 16, 1996 for
training, under age 19;
—Child resided with the relative guardian for no less than 6
purposes of determining eligibility
OR
consecutive months prior to the guardianship placement and
(States that receive Title
under the prior law cash welfare
If a state elects this
the child welfare agency has determined that 1) return home
IV-E funding (all states
program, Aid to Families with
definition of “child” in its
(to biological parents) or adoption are not appropriate
do) may choose to
Dependent Children (AFDC).
Title IV-E plan, up to age 19, permanency options; 2) the child demonstrates a strong
provide kinship
Income standards may not be
20, or 21 (Older youth
attachment to the prospective relative guardian; and 3) the
guardianship assistance
adjusted for inflation.
must meet certain
relative guardian has a strong commitment to caring
but are not required to
employment, education, or
permanently for the child;c; and
do so.)
No income or resource rules are
medical criteria.).
—Relative guardian with whom child is placed meets
applicable to the guardian.
applicable requirements;d and
In addition, the state may
—If the child is 14 years or older regarding the kinship
provide coverage up to age
guardianship arrangement.
21 (on a case-by-case basis),
if the child welfare agency
Any child who was receiving Title IV-E guardianship
determines the youth has a
assistance on September 30, 2008 (under Section 1130 child
physical or mental condition welfare waiver authority) remains eligible for Medicaid.
warranting continued
kinship guardianship
assistance to that age.
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Pathway
Key Eligibility Criteria
(Statutory Citation
in Title XIX of the
Income (and Assets for
Social Security Act)
Selected Pathways)a
Age
Selected Other
Title IV-E Adoption
Title IV-E foster care income/asset
Under age 18, or, if still
Child must be determined by the Title IV-E child welfare
Assistance
rules (tied to biological family from
completing high school or
agency to have “special needs.” This means that that agency
(§1902(a)(10)(A)(i)(I))
which a child was removed to foster equivalent education or
has determined that:
care) are being phased out between
training, under age 19;
—child cannot or should not return home (to biological
[States that receive Title
FY2010-FY2018. As of FY2012 any
OR
parents);
IV-E funding (all states
child adopted from foster care at
If a state elects this
—because of a specific factor or condition, the child is
do) must provide
age 12 or older does not need to
definition of “child” in its
unlikely to be adopted without provision of adoption
adoption assistance.]
meet any of those prior family
Title IV-E plan, up to age 19, assistance and/or medical assistance. Specific factors are
income or resource criteria. The
20, or 21 (Older youth
established by each state but may include factors related to
phase out of income rules will apply
must meet certain
child’s age, race/ethnicity, membership in a sibling group,
to progressively younger adoptees
employment, education, or
race or ethnicity, medical condition, or physical, emotional,
in subsequent years and, as of
medical criteria.).
or mental disabilities; and
FY2018 will apply to an adoptee of
—reasonable but unsuccessful efforts have been made to
any age.
In addition, the state may
place the child for adoption without assistance (either
provide coverage up to age
adoption or medical) but only if this is in child’s best
Any youth who has been in foster
21 (on a case-by-case basis)
interest.
care for 60 consecutive months
if the child welfare agency
does not need to meet the Title IV-
determines the youth has a
Also eligible: Child who has special needs and who is eligible
E foster care income/asset test.
physical or mental condition for SSI. (Until FY2018 some of these children will need to
warranting continued
continue to meet income and resources rules of the SSI
Siblings of a child to whom the
kinship guardianship
program, but beginning with FY2018 those rules no longer
income and resource rules (related
assistance to that age.
apply).
to prior family) may also be eligible
as along as they are placed in same
adoptive family.
No income or resources rules are
applicable to adoptive families.
Eligible for aid under
Meets state income and asset
Under age 18, or under age
Must be a child in a single parent household or in a two-
prior law cash welfare
criteria for receipt of assistance
19 if enrolled in high school
parent household if principal wage-earner meets certain
rules
under the prior law AFDC program
or equivalent program, or
unemployment criteria, or an adult in such a household.
(§1902(a)(10)(A)(i)(I) and
as it existed on July 16, 1996.
an adult who is responsible
§1931)
Income and asset standards may be
for a child.
adjusted for inflation and special
income counting rules may apply.
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Child Welfare: Health Care Needs of Children in Foster Care and Related Federal Issues

Pathway
Key Eligibility Criteria
(Statutory Citation
in Title XIX of the
Income (and Assets for
Social Security Act)
Selected Pathways)a
Age
Selected Other
Low-Income Infants
Annual income of less than133%
Under age 6.

and Young Children
federal poverty level (FPL). Special
(§1902(a)(10)(A)(i)(IV); §
income counting rules may apply.a

1902(l)(1)(A); §

1902(a)(10)(A)(i)(VI); and
1902(l)(1)(C))


Low-Income Children
Annual income of less than 100% of
At least age 6 through age

(§1902(a)(10)(A)(i)(VII);
FPL (133% FPL beginning on January
18.
§1902(l)(1)(D))
1, 2014). Special income counting

rules may apply.a

Pregnant Women
Annual income less than 133% FPL.
Any.
Eligible during pregnancy, labor, and delivery, and for 60 days
(§1902(a)(10)(A)(i)(IV);
Special income counting rules may
post-partum.
§1902(l)(1)(A))
apply.a



Supplemental
Meet federal SSI income (up to
Any.
Must also meet SSI disability criteria.
Security Income (SSI)
about 75% FPL), and asset eligibility
(§1902(a)(10)(A)(i)(II))
standards. (Assets may not exceed

$2,000 for an individual and $3,000

for a couple. Certain assets, such as
a person’s home, are exempt.)

Youth in Foster Care
None.
At least age 18 through age
Must have been in foster care on 18th birthday and covered
on 18th Birthday
25.
under Medicaid while in care. Must not be eligible or
(§1902(a)(10)(A)(i)(IX))
enrolled under other Medicaid mandatory eligibility groups
(except the pathway for non-disabled adults with income
less than 133% FPL). Effective January 1, 2014.





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Pathway
Key Eligibility Criteria
(Statutory Citation
in Title XIX of the
Income (and Assets for
Social Security Act)
Selected Pathways)a
Age
Selected Other
Major Optional Groups
Chafee Youth
No federal criteria but states are
Under age 21.
Must have been in foster care on 18th birthday. States can
(Independent Foster
permitted to establish income and
limit coverage to any “reasonable” category of independent
Care Adolescent)
asset criteria lower than criteria
foster care adolescents. States may also restrict coverage to
(§1902(a)(10)(A)(ii)(XVII); under the prior law AFDC program.
those who received federal foster care maintenance
§1905(w)(1))
payments (before age 18) or those who received
independent living services under Title IV-E of the Social
Security Act.
State-funded
Child –based on his or her own
Under age 21 (or under age
State child welfare agency must have entered into an
Adoption Assistance
income and resources—meets (or
20, 19, or 18 as the state
adoption assistance agreement with the parent of the child
(§1902(a)(10)(A)(ii)(VIII)
met) eligibility criteria for a
may elect).
(other than agreement under Title IV-E); and
mandatory or optional categorically
needy pathway at time when
State child welfare agency must have determined that child
adoption assistance agreement is
cannot be placed for adoption without medical assistance
executed (or before that time).
because the child has special needs for medical or
rehabilitative care; and
No federal income/asset criteria for
adoptive families need apply.
Before the state-funded adoption assistance agreement was
However, state may choose to
executed, child must have been receiving Medicaid (under
apply such criteria to their state-
either a mandatory or optional categorically needy category)
funded adoption assistance program
OR child would have been eligible for Medicaid given his/her
(which would effectively limit the
own income and resources (and based on Title IV-E income
coverage under this category by
and resource levels).
income/resources of adoptive
family).
“Reasonable
Meets state income and asset
Under the age of 21, or at
State defines “reasonable categories.” Reasonable category
categories” of low-
criteria for receipt of assistance
state option under the age
can include children residing in state based institutions or
income children
under the prior law AFDC program
of 20, 19 or 18 as the state
foster care.
(“Ribicoff option”)
without regard to whether state
may choose.
(§1902(a)(10)(A)(ii)(I);
granted this aid. Standards may be
§1905(a)(i))
adjusted for inflation.
Infants and Pregnant
Annual income more than 133% but
Under age 1, or for
Pregnant women eligible during pregnancy, labor and
Women
less than 185% FPL. Special income
pregnant women, any age.
delivery, for 60 days of post-partum care.
(§1902(a)(10)(A)(ii)(IX))
counting rules may apply. a

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Pathway
Key Eligibility Criteria
(Statutory Citation
in Title XIX of the
Income (and Assets for
Social Security Act)
Selected Pathways)a
Age
Selected Other
Medicaid Expansion
Annual income under 200% FPL, or
Through age 18, or for
Targeted low-income uninsured children, and certain
Under State
50 percentage points above
pregnant women, any age.
pregnant women.
Children’s Health
applicable Medicaid level that is
Insurance Program
equal to or greater than 200% FPL.
(SCHIP)
(§1902(a)(10)(A)(ii)(XIV);
(§1905(u)(2)(B);
§2110(b))
Medically Needy
Annual income up to 133⅓% of the
Under age 18 and for
States may extend Medicaid coverage to persons who are
Children and Adultse
maximum payment amount
certain other individuals,
members of one of the broad categories of Medicaid
(§1902(a)(10)(C)(ii), (iii))
applicable under a state’s former
any age.
covered groups (e.g., over 64, disabled, families with
AFDC programs. For families of one
dependent children), but do not meet the applicable income
(i.e., child in foster care), the statute
requirements and, in some instances, assets requirements
gives certain states some flexibility
for other eligibility pathways.
to set these limits to amounts that
are reasonably related to the AFDC

payment amounts for two or more
persons.
Section 1115 Waiver
Upper income eligibility thresholds
Any age.
Eligibility groups and income counting rules as specified in
(§ 1115)
and income counting rules as
CMS approved Special Terms and Conditions.
specified in CMS approved Special
Terms and Conditions.
Time limited demonstrations.

Source: CRS analysis of Title XIX of the Social Security Act.
Notes: Section 1902(10)(A)(i)(I) authorizes a mandatory Medicaid pathway for individuals who are receiving aid or assistance under any plan of the state approved under
Titles I, X, XIV, or XVI. These pathways provide aid to individuals who are old, disabled, and blind, and reside in the territories.
a. As per Section 1902(r)(2), for many Medicaid eligibility groups, states may use more liberal standards for counting income and assets than are specified within each of
the groups’ specific definitions. Because of the 50-state variability in terms of how these income counting rules are applied, only reported rules regarding asset tests
that apply universally across the 50 states are included in this table.
b. Alternatively a child may enter foster care via a voluntary placement agreement between the state child welfare agency and the parent(s)/guardian(s) of the child. That
child may be Title IV-E eligible for up to six months. However, for eligibility to continue beyond that period, a judge must determine that the placement continues to
be in the child’s best interest.
c. If the agency places a sibling of the child in the same kinship guardianship arrangement that child may be eligible even if he/she does not meet all of the Title IV-E foster
care related requirements.
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d. As interpreted by HHS, ACF, ACYF, Children’s Bureau, states have some flexibility to provide somewhat more restrictive eligibility criteria for this assistance than the
broadest eligibility permitted by federal law. For example, a state may limit assistance to youth age 12 or older, or may require that youth have lived with prospective
guardian for longer than 6 months. See HHS, ACF, ACYF-CB-PI-10-
e. If states elect to provide medically needy coverage, they must include children under age 18 (as wel as certain adults) whose income and resources are too high to
qualify under former AFDC-related rules. If a child has a disability that meets the SSI disability standard, then SSI-related financial standards will apply to medically
needy coverage. States may also provide medically needy coverage to individuals under age 21 (or 20, 19, or 18 years) if such persons do not fall into reasonable
classifications such as individuals in foster care, in publically subsidized adoptions, in nursing homes and intermediate care facilities for the mentally retarded, and
persons receiving active treatment as inpatients in psychiatric facilities.
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