Implementing Changes to Medicaid Coverage for Former Foster Youth Could Be a Long, Bumpy Path but States Have Easier Option Available

One of the most popular provisions of the Affordable Care Act (ACA) – allowing young adults to stay on their parent’s health plan until age 26 – would neglect a vulnerable group were it not for another ACA provision extending Medicaid to former foster youth (FFY). Unlike other young adults, youth transitioning out of foster care do not have families to fall back on. The ACA protects these youth by allowing them to retain Medicaid until age 26, a pivotal time as they transition to adulthood and independence. Sounds good, right? But as we know the devil is in the details.

Like other aspects of the ACA’s expansion of coverage, the former foster youth group became effective on January 1, 2014. While the intent of the law was to cover ALL FFY and the provision seems straightforward, the way the law was constructed has posed certain implementation barriers and left FFYs without this path to coverage if they leave the state in which they were in foster care. This was due a technical error in the ACA that was finally corrected in the SUPPORT Act of 2018 with implementation delayed until January 1, 2023. Unfortunately, there is also a problem with the “fix,” which is that it is to be phased in over the next SEVEN years. The layers of red tape have created missed opportunities to provide health care access for FFY who have higher physical and mental health care needs than their peers mainly due to the trauma they have suffered as the result of abuse or neglect.

So, what are the problems?

  • The simple use of the word “the” state versus “a” state meant that the law was interpreted to require states to only cover FFY who were in the state’s custody when they aged out. However, nearly a dozen states have approved Section 1115 waivers to cover FFY from all states (CA, DE, GA, KY, MA, NM, PA, SD, UT, VA, WI).
  • The ACA required states to examine whether FFY were eligible for other mandatory eligibility pathways, including child, pregnancy coverage, and parent/caretakers. This means that states have been required to gather income and other information to rule out eligibility for other categories before they can enroll in the FFY group.
  • And while the SUPPORT Act will eventually eliminate these problems, it only applies to FFY who turn 18 on or after January 1, 2023. States are not yet required to cover all FFY from other states and must continue to apply the hierarchy of eligibility for older FFY until the phase in by age is finally complete in 2030!!!

There is a remedy as suggested in CMS guidance released in mid-December 2022. Specifically, states can seek approval of a section 1115 demonstration (1) to cover FFY who aged out of foster care in another state, and (2) to enroll FFY without screening for eligibility under other mandatory groups, even if the individual turned 18 on or before December 31, 2022.

According to the Annie E Casey Foundation, about 20,000 foster youth age out of the foster system nationally each year. In California, the state with the largest foster youth population, a ten-year average indicates that about 3,500 foster youth age out each year. In other large states like Pennsylvania, Florida, and Texas, the number averages about 1,000 – 1,200. Although we don’t know how many of them move to other states, we are talking about a small share of the youth who move after aging out.

So, states are going to have to go through a whole lot of trouble to administer eligibility for a small number of FFY over the next seven years unless the state chooses to move ahead and support these youth by seeking approval of a Section 1115 demonstration. And keep in mind that the added administrative burden comes at a time when states are focused on the unwinding of the continuous coverage protection, likely meaning FFY can easily slip through the cracks.

A phased-in approach to the SUPPORT Act also complicates efforts to streamline the application and renewal processes for FFY. As long as states are required to assess eligibility for other mandatory categories of eligibility, they will still need to collect income information via ex parte processes (which don’t work well in all states) or directly from the individual. If states move ahead to cover all FFY using Section 1115 demonstration authority, they can assume ongoing eligibility at renewal unless the individual moves out of state. This is much easier to confirm via linkages to data sources like motor vehicles for driver’s license or car registration information. And short of that, unless mail is returned with an out-of-state or no forwarding address order, no further action would be needed.

And with Section 1115 demonstration approval, states can move ahead with creating a separate, simplified application for youth formerly in foster care. Such an application would require only information to determine eligibility. If income is not considered, a simplified application can remove barriers to enrollment for individuals who are deterred by a longer application form.

Not only will choosing the Section 1115 route to align eligibility for all former foster youth reduce administrative burden, it will greatly benefit these youth as they become adults and seek higher education or training and move into the workforce. This was what former Senator Mary Landrieu from Louisiana intended when she sponsored the FFY provision in the ACA. Specifically, she stated on the Senator floor – “I was proud to work on a provision that Leader Reid included in this bill to ensure that every young person who ages out of the foster care system will be able to stay on Medicaid until the age of 26 starting in 2014.” States can wait until the next decade to do this, or they can step up and do the right thing now.


Tricia Brooks is a Research Professor at the Georgetown University McCourt School of Public Policy’s Center for Children and Families.