Medicaid and the Children’s Health Insurance Program (CHIP) together provide coverage for nearly half of the 13.9 million children with special health care needs, who have or are at higher risk of developing chronic conditions and have greater health care needs than children overall. As Congress considers additional funding to improve and expand Medicaid home and community-based services (HCBS) as part of budget reconciliation legislation, new research from the Kaiser Family Foundation (KFF) uses 2019 data from the National Survey of Children’s Health to highlight Medicaid/CHIP’s role in ensuring access to needed care and providing financial protection for low-income children with special health care needs, children with disabilities, and their families.

Children with Special Health Care Needs: Coverage, Affordability, and HCBS Access, Kaiser Family Foundation

What it Finds:

• Nearly half (44%) of children with special health care needs have Medicaid/CHIP coverage. Thirty-six percent rely on Medicaid/CHIP as their only source of coverage, while another 8 percent have Medicaid/CHIP in combination with private insurance. Nineteen states cover more than half of the children with special health care needs in their state through Medicaid/CHIP.
• Medicaid/CHIP serve more low-income and non-white kids with special health care needs. Children with special health care needs with Medicaid/CHIP coverage only were nine times as likely to live in households under 138% of poverty, three times as likely to be Black and 1.5 times as likely to be Hispanic, and were more likely to be under age 12 than those who had private insurance only.
• Children with Medicaid/CHIP had greater health care needs compared to children with private insurance only. Those children with special health care needs with Medicaid/CHIP coverage only and those with Medicaid/CHIP in combination with private insurance were three times as likely to be in fair or poor health, were more likely to report that their health affected daily activities, were more likely to have multiple chronic conditions (like a physical or behavioral condition and an intellectual or developmental disability), and were more likely to report four or more functional difficulties (like dressing/bathing, hearing, seeing, walking, or concentrating).
• Medicaid/CHIP are doing a good job meeting these increased health care needs. Rates of preventive visits and needed mental health care visits were statistically similar across coverage sources. Furthermore, more than two-thirds (69%) of families of children with special health care needs with Medicaid/CHIP coverage only reported that their benefits were always adequate to meet their needs, a significantly higher share than those with Medicaid/CHIP in combination with private insurance (48%) or those with private insurance only (51%).
• Medicaid/CHIP offer much-needed financial protection to families of children with special health care needs. Sixteen percent of children with special health care needs with Medicaid/CHIP coverage only lived in families that sometimes or often had trouble affording enough to eat, and more than one-third (37%) lived in families that sometimes or often had trouble covering basic needs after the child was born. Medicaid’s cost-sharing protections are all the more important for these families, who overwhelmingly (81%) reported that their out-of-pocket costs were always reasonable.

Why it Matters:

• Medicaid is the largest payer of long-term services and supports (LTSS) and home and community-based services (HCBS), which are critical benefits that help children with special health care needs live at home with services like private nursing, transportation, and case management. These benefits are not typically covered by private insurance.
• KFF also recently found that 25 states had at least one HCBS provider close permanently during the pandemic. Because data suggest that many children have missed care during the public health emergency and because children with special health care needs may be at increased risk of contracting Covid-19 or facing serious complications, it is essential to further invest in rebuilding and expanding HCBS. The American Rescue Plan Act included a temporary bump in the federal matching rate for states to improve and expand HCBS, but the permanent increase in the federal matching rate currently on the table in the House budget reconciliation bill would better ensure that states can provide these critical services to children with special health care needs and their families over the long-run.