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Financing Your Child's Healthcare

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Caring for a child with special health care needs can sometimes be financially overwhelming. If your health insurance does not cover what is needed, or your family has no insurance, the resources listed below may help.
No matter what type of insurance or health care funding you have, it’s a good idea to keep track of your child’s medical records, as well as the times, dates, and names of everyone you talk with about insurance or program applications. Document all of your conversations and messages in a log so you can refer back to them when memories differ (or fail) and when information is needed for applications, etc. School records are also important to keep, especially if your child has an IEP or 504 (see Definitions & Terms). See Care Notebook for medical, home, and school record-keeping tips, sample forms, and examples of how to build a record system that works for you and your child.

Medicaid

Medicaid is a health insurance program, administered by your state government, that helps people who meet certain requirements. Eligibility is based on categories that may include age or being pregnant, disabled, blind, or elderly. Other criteria may include your income and resources (bank accounts, property, or items that can be sold for cash) and whether you are a U.S. citizen or a lawfully-admitted immigrant. The rules for counting income and resources vary by state and by category/group. In many states, individuals with disabilities who are eligible for Supplemental Security Income (SSI) are automatically eligible for Medicaid benefits. Medical care may be covered up to three months prior to application if the individual would have been eligible during that time.

Early Periodic Screening, Diagnosis and Treatment (EPSDT) is a federal provision that requires Medicaid to cover medically necessary health care services for enrolled children under 21, even if the service is not available under the Medicaid State Plan. Other services include immunizations, hearing, vision, and dental screenings, and any medically necessary treatments for physical or mental illnesses that are discovered by a clinician or through a screening process.

Medicaid Home and Community-Based (HCBS) Waiver programs provide a variety of services to people who qualify, including both traditional medical services (e.g., dental services, skilled nursing services) and non-medical services (e.g., respite care, case management, and environmental modifications). States may determine the number of consumers to serve in a waiver program. Eligibility is based on the income of the individual with the special need, not the family's income, allowing more children with disabilities to be eligible for Medicaid and Waiver services.

People who meet other criteria for Medicaid but whose income exceeds the limit may apply for the Medically Needy or Spend-Down program, sometimes referred to as the Excess Income program. This program allows them to receive Medicaid benefits by paying "excess" monthly income to the state or accepting responsibility for a portion of their medical bills. For detailed guidelines, see Medicaid Excess Income Program.

For state specific information, see State Medicaid Programs and the Resources section at the bottom of the page.

Medicare

Medicare is a federal health insurance program for people age 65 or older and people who have been getting Social Security disability benefits for at least two years. Two exceptions allow a child to get Medicare immediately if he or she:
  • has a chronic renal disease and needs a kidney transplant or maintenance dialysis
  • has Lou Gehrig’s disease (ALS - amyotrophic lateral sclerosis).

Children’s Health Insurance Program (CHIP)

This program enables states to provide health insurance to children from working families with incomes too high to qualify for Medicaid but without access to affordable private health insurance. The program provides coverage for health care, prescription drugs, vision, hearing, and mental health services. Each state-designed program has its own eligibility rules. For more information about this program and about coverage for your children go to Insure Kids Now or call 1-877-543-7669.

Health Insurance Marketplace

Also known as the health insurance exchange, the Health Insurance Marketplace helps uninsured people find health coverage that meets their needs and budget and is part of the Affordable Care Act.
The health insurance marketplace is for Americans looking for private individual and family plans, with cost assistance for those eligible. You can use the marketplace if
  • you don’t have insurance and don’t have access to affordable, quality employer-based insurance, y.
  • you make less than 400% of the Federal Poverty Level and don’t have access to employer-based insurance, you may get cost assistance through the marketplace.
  • you make less than 133% of the Federal Poverty Level, you will qualify for Medicaid if your state expanded Medicaid.
You may apply for coverage through the Health Insurance Marketplace during yearly open enrollments to access cost assistance. If you qualify for a special enrollment period or are looking to see if you qualify for Medicaid or CHIP services, you may apply any time. See Health Insurance Marketplace (HealthCare.gov) for more information.

Social Security Benefits

Your child may be eligible for benefits from the Social Security Administration. Listed below are two types of Social Security programs for which your child may qualify.

Supplemental Security Income (SSI) Payments for Children with Disabilities

Supplemental Security Income (SSI) makes monthly payments to people with low income and limited resources who are 65 or older, or blind or disabled. A child younger than age 18 can qualify if he or she meets Social Security’s definition of disability for children and if his or her income and resources fall within the eligibility limits. SSI considers your child’s income and resources, as well as those of family members living in the child’s household. To be eligible, your child must meet all of the following requirements to be considered disabled:
  • Must not be working and earning more than the specified amount set by Social Security, which may change each year as cost-of-living increases
  • Must have a physical or mental condition or a combination of conditions that result in “marked and severe functional limitations.” This means that the condition(s) must very seriously limit your child’s activities
  • The condition(s) must have lasted, or be expected to last, at least 12 months or must be expected to result in death
SSI when your child turns age 18
For the SSI program, a child becomes an adult at age 18, after which different medical and non-medical rules apply when deciding eligibily for SSI disability payments. As an adult, the income and resources of family members are no longer considered, only the young adult’s income and resources are counted. The criteria for disability for adults also differ from those for children.

Social Security Disability Insurance (SSDI) Benefits for Adults Disabled Since Childhood

These are benefits payable to children under the age of 18 on the record of a parent who is collecting retirement or disability benefits from Social Security, or survivors benefits payable to children under the age of 18 on the record of a parent who has died.
Although children under age 18 who are eligible for these benefits might be disabled, they do not need to consider their disability to qualify them for benefits.
Note: A child can continue receiving dependent's or survivor's benefits until age 19 if he or she is a full-time student in elementary or high school.

Social Security Benefits for Adults Disabled Prior to Age 22 (SSDI)

The SSDI program pays benefits to adults who have a disability that began before the age of 22. The SSDI benefit is considered a “child’s” benefit because it is paid on a parent’s Social Security earnings record. The SSDI disabled adult “child” benefits continue as long as the individual remains disabled. For a disabled adult to become entitled to this “child” benefit, one of his or her parents:
  • must be receiving Social Security retirement or disability benefits; or
  • must have died and have worked long enough under Social Security.
You can get more information about these programs at Social Security Administration.

State Title V CSHCN Programs

Children with Special Health Care Needs (CSHCN) - Under federal law every state has a Title V/CSHCN program to assist children with disabilities or chronic conditions and their families. The federal Social Security Act of 1989 requires states to “provide and promote family-centered, community-based, coordinated care … for children with special health care needs … and to facilitate the development of community-based systems of services.” Funded with federal and state dollars, Title V programs help assure that no child or youth with special health care needs goes without required services or programs. From state to state, CSHCN program services and agency names will differ. For more information about the program in your state go to: State Title V Profiles and Contacts.

Other Financial Supports

Federal Income Tax Credits

The Internal Revenue Code (IRC) includes several tax credits for which parents with disabled or special needs children might be eligible, including but not limited to:
  • Health Coverage Tax Credit
  • Earned Income Tax Credit
  • Child Tax Credit
  • Dependent Care Tax Credit
  • Tax Credit for the Disabled and Elderly
Tax credits reduce your tax liability, and in some cases they can result in a refund. This may also apply to parents of adult children with special needs. Each credit has its own specific set of operative rules. A tax advisor or the IRS should be consulted to determine eligibility. See Internal Revenue Service.

Tax-Advantaged Financial Accounts (FSAs, HSAs, and HRAs)

A Flexible Spending Account (FSA) is a type of account that can be set up through some employers’ benefit plan and will allow you to set aside a portion of your earnings to pay for qualified expenses. Most commonly, FSA funds are used to pay for medical expenses, but they can often be used for dependent care. The money you put into an FSA is not taxed, however, you must use the funds by the end of the benefit year; they do not roll over.
Another type of tax-advantaged medical savings account is the Health Savings Account (HSA), which is available to taxpayers enrolled in a High-Deductible Health Plan (HDHP). As with an FSA, these funds are not subject to federal income tax, but with an HSA you are not required to spend all of the money each year; the funds will roll over from year to year. HSA funds can be used to pay for medical expenses at any time, but you cannot use them to pay for over-the-counter medications without a prescription.
Health Reimbursement Accounts or Health Reimbursement Arrangements (HRAs) are IRS-sanctioned programs that allow an employer to set aside funds to reimburse medical expenses paid by participating employees. Using an HRA yields "tax advantages to offset health care costs" for both employees and employers. According to the IRS, an HRA "must be funded solely by an employer," and contributions cannot be paid through a voluntary salary reduction agreement. There is no limit on the employer's contributions, which are excluded from an employee's income. HRAs are initiated by the employer and serviced by a third-party administrator or plan service provider. The employer decides if the funds are rolled over from year to year, as with a savings account, and how much rolls over (which can be either a flat amount or a percentage). The HRA plan will state whether a credit balance in an employee's HRA account can be rolled over from year to year. Check with the IRS and your employer’s benefit plan to learn which kinds of expenses will be covered, and which plan makes the most sense for you. You can learn more about these types of accounts at this link: US Department of the Treasury Health Savings Accounts.

ABLE Accounts

The ABLE Act will change the tax code to allow for tax-advantaged savings accounts for qualified individuals with disabilities to save for certain expenses, such as education and transportation. Similar to existing “Section 529” education savings accounts, ABLE accounts will allow individuals and families to save for disability-related expenses to supplement, but not replace, benefits provided through Medicaid, Supplemental Security Income, the beneficiary’s employment, and other sources. If properly managed, funds in an ABLE account will not jeopardize eligibility for critical federal benefits. With a full understanding of account features, individuals and families can use ABLE accounts as another tool in planning for the lifetime needs of an individual with long-term disabilities. You can learn more at: ABLE Accounts.

Special Needs Trust

Another way of providing for your child with special needs is through a Special Needs Trust (SNT). Also called a "supplemental care trust," an SNT is a reliable, legal way to ensure that the resources left to your child are available when he or she needs it. An SNT allows your child access to more flexible funds while ensuring that the assets are handled responsibly. To be sure that the money for your child can be used as supplementary income, and that public benefits such as medical assistance or SSI will continue, the assets must be placed in the SNT and set up correctly. Although the government states that a person with a disability cannot have a trust, the SNT is acceptable because the trust does not belong to the person with the disability. He or she is nominated as a beneficiary of the trust and is usually the only one who receives the benefits. To learn more see The Pacer Center Special Needs Trusts.

Foundations

Many large health insurance-related companies have foundations to which consumers can apply for financial help. Call your local insurance company or hospital association to learn if they have a foundation or charity care organization that may help with your health care financing needs. One example of such a foundation is the UnitedHealthcare Children’s Foundation that provides medical grants for financial assistance for the family's share of the cost of medical services. For more information visit UnitedHealthcare Children's Foundation.

Local Organizations

Check with your local volunteer and social organizations that may be looking for projects and willing to do fund-raising and other charitable tasks. Explain your family’s needs, including a full description of the medical and other needs, and how the funding would help your family.
Some of the organizations that might be able to help could include: Rotary clubs, Lions clubs, Elks lodges, Shriners Hospitals, scout troops, religious groups, etc.
Be sure to recognize and thank everyone who helps your family. Find ways to acknowledge the support of organizations publicly by contacting the local newspapers or media. This recognition also raises public awareness and reinforces the need for donations.

Resources

Information & Support

For Parents and Patients

Rhode Island Personal Assistance Services and Supports (PASS) Fact Sheet (PDF Document 196 KB)
Personal Assistance Services and Supports (PASS) helps families of children with special health care needs improve a child’s ability to do activities of daily life; their ability to maintain safety and to gain social skills. Medicaid program.

Rhode Island Cedar Family Centers Fact Sheet (PDF Document 234 KB)
Cedar Family Centers provide services supporting Rhode Island's children and youth with special health care needs and their families. No cost for Medical Assistance, RIte Care or RIte Share.

Rhode Island ABA Fact Sheet 2016 (PDF Document 290 KB)
ABA discrete trial learning is a medically necessary, highly specific and curriculum-driven approach with rigorous goals, objectives, and measurement for children diagnosed with an Autism Spectrum Disorder (ASD). ABA provided in the home or an agency setting. Medicaid, RIteCare or RIteShare eligibility.

Rhode Island Hoja Informativa de Terapia de Analisis Conductual Aplicado 2016 Spanish (PDF Document 173 KB)
La enseñanza de tareas discriminadas como parte de la terapia de Análisis Conductual Aplicado, ABA por su sigla en inglés, es un método de necesidad médica altamente específico, guiado por un plan de estudios con metas, objetivos y mediciones rigurosos para niños y jóvenes diagnosticados con trastornos del espectro autista.

Rhode Island Early Intervention Program (PDF Document 405 KB)
Early Intervention (EI) is a program designed to help families support the growth and development of their infants and toddlers, birth through 3, who are delayed in their development or have a diagnosed condition known to cause developmental delay. Providers and RI Parent Information Network. 2016

Rhode Island Katie Beckett Fact Sheet 2016 (PDF Document 185 KB)
Katie Beckett is a Rhode Island Medical Assistance coverage group that allows for very disabled and/or medically complex children to be cared for at home instead of in a hospital or an institution. Eligibility, how to apply, no direct family cost for services.

Rhode Island Hoja Informativa de Katie Beckett - Spanish (PDF Document 121 KB)
Katie Beckett es un grupo de cobertura de Rhode Island Medical Assistance que permite a menores de edad muy discapacitados o con problemas médicos complejos recibir atención médica en casa en vez de en un hospital o institución.

Rhode Island Respite Fact Sheet 2016 (PDF Document 146 KB)
The Respite for Children Program allow parents or guardians caring for a child with disabilities, to have time off for themselves. Eligibility and application process are explained for this Medicaid program.

National Center for Family - Professional Partnerships (F2F HICs)
Family-to-Family Health Information Centers (F2F HICs) are nonprofit, family-staffed organizations that assist families of children and youth with special health care needs. State-based F2Fs provide support, information, resources, and training around health care funding. Staff is uniquely able to help with firsthand experience navigating the maze of health care services and programs.

Family Voices
A national, nonprofit, family-led organization promoting quality health care for all children and youth, particularly those with special health care needs. Locate centers by state, F2F HICs (Family-to-Family Health Information Centers).

Catalyst Center: Financing Care for CSHCN
The Catalyst Center is dedicated to improving healthcare coverage and financing for children and youth with special health care needs (CYSHCN). It is funded by the federal Maternal and Child Health Bureau, Health Resources and Services Administration, and US Department of Health and Human Services.

Social Security Benefits for Children with Disabilities
An electronic booklet outlining the kinds of Social Security and Supplemental Security Income (SSI) benefits a child with a disability might be eligible for; call toll-free 1-800-772-1213.

Managing Your Finances
An online tutorial from the PACER Center, "Managing Your Finances" includes these modules: Make a Spending Plan, Track Your Spending Leaks, Set S.M.A.R.T. Financial Goals, Manage Your Debt, and Protect Your Identity.

Need Help Paying Bills?
Information on assistance programs, charity organizations, and other resources listed by state for help paying bills, mortgage and debt, how to save money, and tips to pay bills when money is tight.

UnitedHealthcare Children's Foundation
The UnitedHealthcare Children's Foundation is a nonprofit charity. Apply for grants for medical needs not covered or not fully covered by a commercial health insurance plan.

US Department of the Treasury Health Savings Accounts
Taxpayers can find out more about Health Savings Accounts here.

Health Insurance Marketplace (HealthCare.gov)
Sometimes known as the health insurance exchange, the new Health Insurance Marketplace helps uninsured people find health coverage that meets their needs and budget. Part of the Affordable Care Act.

Healthcare Financing Factsheet (PDF Document 263 KB)
A series of one page healthcare financing fact sheets from focus groups of physicians, nurse practitioners, and other healthcare providers assembled by Family Voices New Jersey, 2011.

Healthcare Financing Factsheet, Spanish (PDF Document 319 KB)
In Spanish, a series of one page healthcare financing fact sheets from focus groups of physicians, nurse practitioners, and other healthcare providers, assembled by Family Voices New Jersey, 2011.

National Disability Navigator
This fact sheet is intended to help Navigators answer specific questions that people with disabilities might ask about benefits and coverage available through the Health Insurance Marketplace, supported by the American Association on Health and Disability (AAHD).

Children's Health Insurance Program (CHIP)
This is the official U.S. government site for CHIP services; information includes eligibility, enrollment and general information about health insurance for kids.

Tutorial on Medicaid and CHIP Health Insurance
A tutorial on the basics of Medicaid and CHIP, the many different populations these programs serve, the changes they are undergoing as a result of health care reform and some options to help readers think about opportunities to improve services for CSHCN through communication and collaboration with Medicaid and CHIP staff. A collaboration of NASHP and the Catalyst Center. 2012

EPSDT Fact Sheet (Early Periodic Screening, Diagnosis and Treatment) (PDF Document 48 KB)
Medicaid’s child health component, known as the Early Periodic Screening, Diagnosis and Treatment (EPSDT) program, has been shaped to fit the standards of pediatric care and meet the special physical, emotional, and developmental needs of low-income children. Prepared by Utah Family Voices.

EPSDT Medicaid Benefits for Children
Medicaid's EPSDT benefit provides comprehensive and preventive health care services for children under age 21 who are enrolled in Medicaid. EPSDT is key to ensuring that children and adolescents receive appropriate preventive, dental, mental health, and developmental, and specialty services. Early and Periodic Screening, Diagnostic, and Treatment (EPSDT)

Disability Medicaid Fact Sheet, Utah (PDF Document 48 KB)
Information, tips, and resources about Disability Medicaid in Utah. Prepared by Utah Family Voices.

State Title V Snapshots
Title V programs for children with special health care needs (CSHCN) with measures and goals. Maternal and Child Health Bureau, Federal-State Partnerships

Supplemental Security Income (SSI)
The Supplemental Security Income (SSI) program pays benefits to disabled adults and children who have limited income and resources.

Social Security Administration
Official site for the U.S. Social Security Administration; offers programs including disability benefits (SSDI) and Supplemental Security Income (SSI).

State Title V Profiles and Contacts
Title V programs by state with contact information. Association of Maternal and Child Health Programs

ABLE Accounts
State-sponsored tax-favorable ABLE accounts for people with disabilities who became disabled before age 26, becoming available in 2016.

Internal Revenue Service
Income tax information.

Services

Adolescent Health Transition Programs

We currently have no Adolescent Health Transition Programs service providers listed; search our Services database for related services.

CHIP, State Children's Health Insur Prog

We currently have no CHIP, State Children's Health Insur Prog service providers listed; search our Services database for related services.

Financial Assistance, Other

See all Financial Assistance, Other services providers (4) in our database.

Health Insurance Counseling and Advocacy

See all Health Insurance Counseling and Advocacy services providers (2) in our database.

Medicaid

See all Medicaid services providers (5) in our database.

Medical Care Expense Assistance

See all Medical Care Expense Assistance services providers (6) in our database.

Medicare Special Needs Plan

See all Medicare Special Needs Plan services providers (1) in our database.

Prescription Drug Patient Assistance Programs

We currently have no Prescription Drug Patient Assistance Programs service providers listed; search our Services database for related services.

For other services related to this condition, browse our Services categories or search our database.

Authors & Reviewers

Initial Publication: June 2008; Last Update: June 2016
Current Authors and Reviewers (click on name for bio):
Author: Gina Pola-Money
Reviewers: Tina Persels
Alfred Romeo, RN, Ph.D.
Authoring history
(Limited detail is available on authoring dates before 2014.)
2003: first version: Robin PrattA
AAuthor; CAContributing Author; SASenior Author; RReviewer