Financing the Special Health Care Needs of Children and Youth in Foster Care: A Primer

Foster Care Primer.

This primer focuses on an often overlooked population of children and youth with special health care needs: children and youth in foster care. State Title V Maternal and Child Health (MCH) and CYSHCN programs can play a significant role in improving the system of coverage and care for this group of vulnerable children. Some of the ways in which Title V programs are currently doing so include leading or participating in initiatives related to medical home, benefits counseling, child abuse and neglect prevention, service quality monitoring and measurement, and transition.

The primer includes descriptions of the foster care population and their special health care needs, the types of out-of-home placements children may experience, a synopsis of the funding, federal legislation and key players of the child welfare system; important elements in providing comprehensive health care for children in foster care; steps that federal and state officials have taken to improve the system of health care for children in foster care and examples of programs and models of providing health care services for children in foster care.

Executive Summary

Children in foster care are children with special health care needs.

Currently, approximately 700,000 children in the U.S. receive foster care services over the course of a year, and an estimated 400,540 children were reported to be in foster care on September 30, 2011.1 A high percentage of children enter foster care after having experienced extreme poverty, parental substance abuse, homelessness, neglect, and sexual and/or physical abuse.2,3 Children in foster care are vulnerable in many ways and should be considered important members of the population of CYSHCN because of their increased risk for and prevalence of poor physical, developmental and mental health status and outcomes.4 Compared with children from similar socioeconomic backgrounds, children in foster care are in poorer overall health, and have higher rates of serious emotional and behavioral problems, chronic medical conditions, and developmental delays.3 Children in foster care also have a higher level of diagnosed disability than the general populationof children do.13

Children in foster care face challenges in the coverage and financing of their health care.

The child welfare system is a complex arrangement of federal, state, and private partnerships with multiple stakeholders. Only a small percentage of children who enter the child welfare system are placed in some form of out-of-home care.5 There are a variety of different types of foster care settings, and where children end up is based on their level of need and the resources available to meet that need. Different foster care settings have varying implications for coverage and financing of health care for children. For example, children in formal kinship care placement are five times more likely to lack health insurance than children in non-relative foster care and are also less likely to receive mental health services.6

Children in foster care face challenges in access to quality care.

Although over time there has been increased recognition of the vulnerabilities of children in foster care, their basic health needs frequently go unmet.7 A federal review of state child welfare agencies found that 30% of children sampled never received a health care assessment or treatment.8 Even if children in foster care are enrolled in a public insurance program, they face significant barriers in accessing health care. In some cases, they face the same challenges as anyone who uses public insurance, such as a lack of providers who are able and willing to serve Medicaid recipients.8 Removal from the care of biological parents often makes tracking children’s health history difficult, and while in foster care, they may move to several foster homes or treatment settings and encounter a number of different providers.8 All of these factors complicate efforts to document health care histories and ensure children receive the health care services they need.

Children in foster care should have access to a comprehensive system of care.

To support a comprehensive system of care, states must ensure that needed services are properly financed and accessible. The Child Welfare League of America (CWLA) and the American Academy of Pediatrics (AAP) have identified the following four components of health care services that are necessary when caring for children in foster care:

  • Initial health assessment
  • Comprehensive medical/dental assessment
  • Developmental and mental health evaluation
  • Ongoing care and monitoring of health status3

At the state level, child welfare agencies are largely responsible for the health needs of children in foster care; however, they operate within a large, fragmented system that includes other stakeholder agencies and providers such as Title V, Medicaid, mental health, and children’s health. To make significant strides in improving health care for children in foster care, all of these agencies will have to play a part.7

Health care coverage and financing is fundamental to meeting the health care needs of children in foster care.

Title IV-E is the largest source of funding for child welfare services, but states cannot use these funds for the purpose of providing direct health care services. States can finance health care services for children in foster care using Medicaid, CHIP or Supplemental Security Income (SSI). Most health care that children in foster care receive is financed through Medicaid. Children who are receiving Title IV-E foster care maintenance payments are categorically eligible for Medicaid.9 Children in foster care who do not qualify for Medicaid coverage or whose placements are supported by child-only TANF payments may be eligible for health insurance under the state CHIP program.10 SSI cash payments along with the associated entitlement in most states to Medicaid for SSI enrollees are particularly helpful in covering children’s health care needs after permanent placement or reunification with their biological families.11

As both public and private agencies have released reports on the health conditions of children in foster care, federal and state lawmakers have taken steps to improve the system of care for this population. Several major federal efforts have sought to reform foster care and improve access to health care services. These federal laws have important implications for coverage and financing of care for children in foster care. Most recently, the Patient Protection and Affordable Care Act (ACA) of 2010 (PL 111-148) extends Medicaid coverage for former foster youth coordination and supports through health homes. States have taken additional steps to improve the quality of services for children in foster care by:

  • Enforcing Medicaid entitlement services by requiring all children to be provided medically necessary care under the Early and Periodic Screening, Diagnostic and Treatment program (EPSDT)
  • Expanding Medicaid/CHIP programs
  • Adopting a managed care model as a method of obtaining comprehensive care for children in foster care3,12

Title V can work with states and other stakeholders to improve the system of care for children in foster care.

In several states across the U.S., Title V programs are working to improve the system of care for children in foster care through initiatives which include:

  • Provision of quality health care and coordination
  • Interagency collaboration
  • Child abuse and neglect prevention
  • Quality monitoring and measurement

Read on to learn more about financing the special health care needs of children in foster care. The primer also includes three examples of innovative program models of health care delivery for children in foster care.


1U.S. Department of Health and Human Services, Administration for Children and Families, Administration on Children, Youth and Families, Children’s Bureau. (2012). The AFCARS Report: Preliminary FY2011 estimates as of July 2012. Retrieved August 7, 2012 from http://www.acf.hhs.gov//sites/default/files/cb/afcarsreport19.pdf

2U.S. Department of Health and Human Services, Administration for Children and Families, Administration on Children, Youth and Families, Children’s Bureau. (2011). Child maltreatment 2010. Retrieved May 1, 2012 from http://www.acf.hhs.gov/programs/cb/stats_research/index.htm#can

3American Academy of Pediatrics. (2002). Health care of young children in foster care. Pediatrics, 109(3), 536 – 541.

4American Academy of Pediatrics, District II Task Force on Health Care for Children in Foster Care. (2005). Fostering Health: Health care for children and adolescents in foster care. 2nd Ed. Retrieved June 10, 2011 from http://www2.aap.org/fostercare/FosteringHealth.html

5Waldfogel, J. (2003). Welfare reform and the child welfare system. Children and Youth Services Review, 26(10), 919-939.

6Berman, S. & Carpenter, S. (2004). Findings brief: Children in foster care and kinship care at risk for inadequate health care coverage and access. Retrieved August 7, 2012 from Changes in Health Care Financing Organization, Academy Health website: http://www.hcfo.org/pdf/findings0704.pdf

7Halfon, N., Inkelas, M., Flint, R., Shoaf, K., Zepeda, A., & Franke, T. (2002). Assessment of factors influencing the adequacy of health care services to children in foster care. Retrieved July 6, 2011 from UCLA Center for Healthier Children, Families and Communities website: http://www.healthychild.ucla.edu/AssessmentFactors.asp

8U.S. Government Accountability Office. (2009). Foster Care: State practices for assessing health needs, facilitating service delivery and monitoring children’s care. Retrieved July 7, 2011 from http://www.gao.gov/ new.items/d0926.pdf

9Schneider, A., Elias, R., Garfield, R., Rousseau, D. & Wachino, V. (2003). The Medicaid resource book. Retrieved June 6, 2012 from the Kaiser Family Foundation website: http://www.kff.org/ medicaid/2236-index.cfm

10McCartney, S. (2010). 2010 AAICAMA Training: Medicaid eligibility. Retrieved June 17, 2012 from the Association of Administrators of the Interstate Compact on Adoption and Medical Assistance website: http://aaicama.org/cms/resources-docs/MA_ Eligibility_2010.pdf

11U.S. Department of Health and Human Services, Administration for Children and Families, Office of Planning, Research and Evaluation. (2009). National survey of child and adolescent well-being - No. 12: Estimates of Supplemental Security Income eligibility for children in out-of-home placements. Retrieved July 14, 2011 from http://www.acf.hhs.gov/programs/opre/ abuse_neglect/nscaw/reports/est_suppl/est_suppl.pdf

12Giliberti, M., & Schulzinger, R. (2000). Relinquishing custody: The tragic result of failure to meet children’s mental health needs – Executive summary. Retrieved July 8, 2011 from Bazelon Center for Mental Health Law at: http://www.bazelon.org/LinkClick. aspx?fileticket=-hWbIbUX5v8%3D&tabid=104

13U.S. Department of Health and Human Services, Administration for Children and Families, Administration on Children, Youth and Families, Children’s Bureau. (2011). National Child Abuse and Neglect Data System (NCANDS) Child File, FFY 2010 [Dataset]. Retrieved May 15, 2012 from the National Data Archive on Child Abuse and Neglect website: http://www.ndacan.cornell.edu

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