Medicaid Helps Children and Youth with Special Health Care Needs

In Partnership with:

Children and Youth with Special Health Care Needs (CYSHCN) Depend on Medicaid

Children and Youth with Special Health Care Needs (CYSHCN) are defined as children who have chronic physical, developmental, behavioral, or emotional conditions and who also require health and related services of a type or amount beyond that required by children generally.¹ Affordable health coverage for care to address these needs is vital.

One in five children² under age 18 have special health care needs—representing 14 million children in the U.S.—with nearly half being covered by Medicaid and/or the Children’s Health Insurance Program (CHIP).³ 

For more than one third of this group, Medicaid/CHIP is the only source of coverage and a small proportion (8%) have supplemental private coverage.⁴

For CYSHCN and disabilities, Medicaid covers a wide range of medical and long-term services and supports, many of which are not covered at all or available only in limited amounts through private insurance.⁵ These services keep children with complex and chronic needs living at home with their families, in their communities.

Medicaid is a Lifeline for CYSHCN

Medicaid is a lifeline that allows all eligible children with disabilities to receive a full range of health care and long-term services and supports. Medicaid coverage helps to ensure that CYSHCN and disabilities are able to thrive, achieve optimal health, and grow into self-sufficient adults

Many CYSCHN live with serious conditions such as asthma, autism, cerebral palsy, epilepsy, genetic disorders, sickle cell disease, and Type 1 diabetes.

Most require more specialized health services such as medications, therapies (e.g., physical, occupational, or speech-language-hearing) and care of specialty physicians. 

Across the spectrum of severity, Medicaid is vital, providing CYSHCN with the care and supports they need to maintain and improve their health, live at home, stay in school, and thrive.⁶

One quarter of CYSHCN experience functional limitations (e.g., difficulty with activities of daily living or walking). Among those covered by Medicaid/CHIP, two-thirds have a physical disability and 44% have four or more functional difficulties.⁷

Medicaid Benefits Help CYSHCN get Needed Care

Private insurance often places limits on services such as speech, physical or occupational therapy or durable medical equipment such as wheelchairs. Medicaid can pay for these services and items when needed. Medicaid is able to play this role because of its strong child-specific benefit, known as the Early and Periodic Screening, Diagnostic and Treatment or EPSDT benefit, which requires children be provided with all care that is medically necessary to improve and/or maintain their health.^{8 9}

Medicaid Works for CYSHCN in Varied Family Circumstances

CYSHCN are eligible for Medicaid through several coverage pathways, including some mandatory and some optional.¹⁰ Many CYSHCN qualify based solely on low income. Others become eligible through a disability pathway. Some families “buy in” or “spend down” as a result of high costs for health care for their child.

Nearly all states have adopted optional coverage for children with disabilities, who are a subset of the larger population of CYSHCN. Medicaid is the primary source of financing for home and community-based services, which help to ensure that children can live at home with their families rather than living in more costly institutions. This began with the bipartisan Katie Beckett Medicaid option, signed into law in 1981 by President Ronald Reagan. By 2024, 43 states covered some children with significant disabilities living at home under the “Katie Beckett” state plan option or a comparable waiver.¹¹

Medicaid Helps Support CYSHCN with Disabilities

Under the federal Individuals with Disabilities Education Improvement Act, Medicaid provides funding for eligible medical and related services for with disabilities from birth to age 21.¹² Many schools use Medicaid to help support services, pay for the personnel, supports, and equipment they are required to provide students with disabilities who have Individualized Education Plans. For younger children birth to three, Medicaid finances early intervention services that address conditions affecting infants and toddlers. These services range from physical therapy sessions to transportation to specialized equipment for children with severe disabilities. They help children stay in school and achieve their full potential.

Medicaid provides critical support for CYSHCN and their families. It provides access to services such as prescription medicines for asthma, physical therapy for cerebral palsy, or the right-sized wheelchair for a child with spina bifida. Supporting Medicaid is critical to supporting CYSHCN. 

Endnotes

1. Maternal and Child Health Bureau, Children and Youth with Special Health Care Needs, National Survey of Children’s Health Data Brief, Health Care Resources and Services Administration, June 2022. Available here.  ↩︎
2. Child and Adolescent Health Measurement Initiative, 2022-2023 National Survey of Children’s Health (NSCH) data query, Data Resource Center for Child and Adolescent Health supported by the U.S. Department of Health and Human Services, Health Resources and Services Administration (HRSA), Maternal and Child Health Bureau (MCHB). Retrieved February 19, 2025. Available here. ↩︎
3. E. Williams and MB. Musumeci,  Children with Special Health Care Needs: Coverage, Affordability, and HCBS Access, Issue Brief, KFF, October 4, 2021. Available here. ↩︎
4. E. Williams and MB. Musumeci,  Children with Special Health Care Needs: Coverage, Affordability, and HCBS Access, Issue Brief, KFF, October 4, 2021. Available here.  ↩︎
5. MB. Musumeci and P. Chidambaram, Medicaid’s Role for Children with Special Health Care Needs: A Look at Eligibility, Services, and Spending,  Issue Brief, KFF, June 2019.  Available here. ↩︎
6. Special Education– Early Intervention Program for Infants and Toddlers with Disabilities (ALN: 84.181), Office of Special Education and Rehabilitative Services (OSERS), U.S. Department of Education. Available here. ↩︎
7. E. Williams and MB. Musumeci, Children with Special Health Care Needs: Coverage, Affordability, and HCBS Access, Issue Brief, KFF, October 4, 2021. Available here. ↩︎
8. K. Whitener, EPSDT: A Primer on Medicaid’s Pediatric Benefit, Georgetown University Center for Children and Families, March 4, 2016.  Available here.  ↩︎
9. Centers for Medicaid and Medicare Services, EPSDT – A Guide for States: Coverage in the Medicaid Benefit for Children and Adolescents, U.S. Department of Health and Human Services, June 2014.  Available here.   ↩︎
10. MB. Musumeci, P. Chidambaram, and M.O’Malley Watts, “Medicaid Financial Eligibility for Seniors and People with Disabilities: Findings from a 50-State Survey,” (Washington: KFF, June 14, 2019), available here. ↩︎
11. KFF, “Medicaid Eligibility for Katie Beckett Children with Significant Disabilities and Special Income Rule” (2024), available here. ↩︎
12. Congressional Research Service. The Individuals with Disabilities Education Act (IDEA), Part B: Key Statutory and Regulatory Provisions. (CRS Report No. R41833) Updated August 20, 2024. Available here. ↩︎

Additional resources:

• As posted by AAP and National Center for System of Services for Children and Youth with Special Health Care Needs.
• National Center for System of Services for Children and Youth with Special Health Care Needs. Blueprint for Change Strategies: At-a-Glance Overview. American Academy of Pediatrics.January 30, 2024. Available here.
• Sarah E. McLellan, Marie Y. Mann, Joan A. Scott, Treeby W. Brown; A Blueprint for Change: Guiding Principles for a System of Services for Children and Youth With Special Health Care Needs and Their Families. Pediatrics June 2022; 149 (Supplement 7): e2021056150C. 10.1542/peds.2021-056150C
• Health Resources and Services Administration, Maternal and Child Health, Children and Youth with Special Health Care Needs (CYSHCN). Available here.