Children With Special Needs May Receive Medicaid Coverage for Home Care Despite Parents' Assets

Red CrossIf you have a child with special needs who requires an institutional level of care that can be provided in your home instead of in a hospital or other institution, the Katie Beckett Medicaid Waiver program may allow you to keep your child at home, even if you think that your assets are too high to qualify for Medicaid.

The Medicaid program offers low-cost health care for many people with special needs, including children. However, Medicaid is a "means-based" program, which means that beneficiaries receive services only if they meet very stringent income and asset requirements. When a child with special needs applies for Medicaid and is living at home, some or all of her family members' income and assets are generally counted as hers for purposes of qualifying for benefits. But if a child with special needs requires care in an institutional or hospital setting, Medicaid counts only the child's income and assets when evaluating her financial eligibility. This leads to an often difficult dilemma -- should a child who can't qualify for Medicaid in the community because her family's assets are too high remain in an institution in order to receive sometimes essential Medicaid benefits?

In the 1980s, Katie Beckett found herself in this very situation. When she was six months old, Katie contracted viral encephalitis and was temporarily paralyzed. She was placed on a ventilator and was not able to breathe on her own until she was two years old. During this entire time, Katie remained in the hospital. However, as her treatment progressed, it became apparent that Katie could receive care at home, and her parents wanted to take her out of the hospital. Unfortunately, the Beckett family could not afford to bring Katie home because their assets were too high to qualify for Medicaid in the community, but too low to pay for Katie's care themselves. It looked like Katie would have to remain in the hospital in order to continue to receive life-sustaining Medicaid coverage.

Although it took a while, Katie's story eventually prompted the federal government to change its Medicaid regulations to allow states to adopt what is now known as the Katie Beckett Waiver program. Under this program, if a child with special needs requires an institutional level of care but can receive that care at home, and is otherwise eligible for Medicaid, she can qualify for coverage based only on her income and assets; her parents' funds will not disqualify her. However, the cost of the Medicaid beneficiary's in-home care cannot exceed the cost of her care in an institutional setting.

A qualified special needs planner can help determine if a Katie Beckett Waiver program can help your child receive important Medicaid benefits. Since not all states offer these waivers, it is even more important to speak with a planner who knows the law in your specific state. To find a special needs planner near you, click here.

To read Katie's story in her own words, click here.

Article Last Modified: 11/03/2009