Protecting Children in Foster Care:
Why Proposed Medicaid Cuts Harm
Our Nation's Most Vulnerable Youth

by David Rubin, MD, MSCE; Neal Halfon, MD, MPH;
Ramesh Raghavan, MD, PhD; Sara Rosenbaum, JD

According to a new report issued by Casey Family Programs and authored by leading national health policy experts, including Center Director Neal Halfon, proposed changes to Medicaid currently being considered by Congress significantly threaten the health and well-being of the nation’s most vulnerable—the 800,000 children and youth who spend time in our foster care system each year. The proposed changes include at least $10 billion in Medicaid cuts.

"This is one more tragic example of how children in foster care are, for the most part, invisible in this country,” said Ruth Massinga, president and CEO of Casey Family Programs, the nation’s largest foundation focused on foster care.  “These are some of our most fragile children and youth, and yet Congress is proposing that we sacrifice the long-term quality of their lives for the sake of short-term budget savings.  We all know what the result will be years from now – ongoing poor health for these children as they grow into adulthood, and higher costs for Medicaid coverage and care.”

Even though Medicaid serves as the health provider of first and last resort for this vulnerable population, any effort to protect children and youth in care  from the impact of these cuts is absent from proposals presented by the Bush Administration, the Medicaid Commission, the National Governors Association (NGA), and the National Conference of State Legislatures (NCSL).  “These proposals have profound implications for children generally – and for children and youth in foster care in particular.  But this most fundamental of all measures of sound Medicaid reform has received virtually no attention in the rush to achieve savings,” said Sara Rosenbaum, a report co-author and Chair of the Department of Health Policy at the George Washington University School of Public Health and Health Services.

Children in foster care are a particularly vulnerable group, with medical, developmental, and mental health needs far surpassing those of other children. For example, a recent study by Casey Family Programs and Harvard Medical School found that over 50% of young adults who had formerly been in foster care will have at least one major mental health problem, and 1 in 4 will suffer from post-traumatic stress disorder, more than double the rate of returning war veterans.

Medicaid coverage is mandatory for children in federally assisted foster care and special needs adoption placements.  Furthermore, Medicaid is an essential service for the great majority of children who enter foster care; 70 percent of children entering foster care had Medicaid coverage before placement.

Proposals that could do the greatest harm include:

• The Administration proposes to eliminate coverage for children who also receive services from programs that share Medicaid’s mission. But in the case of programs such as those available through state child welfare systems, shared mission is integral to adequate performance. Federal child welfare laws provide no independent financing for health care and depend on Medicaid for virtually all necessary medical care services.  Imposition of a “shared mission” test could cost child welfare systems billions of dollars in essential support for health care, case management and rehabilitation funding.

• The NGA and NCSL propose a roll-back in coverage under Medicaid’s Early and Periodic Screening Diagnostic and Treatment Program (EPSDT).  Such a rollback would permit the termination of payments for the broad and critical array of medical and rehabilitation services needed by the most vulnerable children and youth, as well as the full range of preventive care that EPSDT guarantees.  The children and youth most seriously affected would be those in foster care because their health needs often are the most serious.

• The NGA, NCSL, and the Medicaid Commission cost-sharing proposals fail to exempt children who receive foster care and child welfare services. Many studies have shown the impact of cost sharing on children’s access to and use of care, especially preventive care.  This would significantly impede access to diagnosis and treatment coverage at the earliest possible time.  

“At a time when states are being held accountable for assuring the well-being of children in foster care under federally mandated Child and Family Service Reviews, these proposals have the effect of making that task much harder,” said Dr. David Rubin, a report co-author and Director of Research & Policy for Safe Place: Center for Child Protection & Health at The Children's Hospital of Philadelphia.  “If proposals on the table are enacted, it could be a train wreck for young people in foster care.”

The report’s authors offered the following recommendations to Congress to safeguard the health and well-being of children and adolescents:

• Reject adverse reductions in Medicaid that will harm both children and the child welfare systems on which they depend.

• Reject any rollback in the Early and Periodic Screening Diagnostic and Treatment Program (EPSDT), which is critically important given the critical ongoing health care needs of children and adolescents in foster care.

• Reject any proposal that would unravel the working relationship of Medicaid and child welfare   by terminating coverage of, and payment for, the essential medical services furnished by or through child welfare agencies.

• Reject cost-sharing proposals that affect coverage for low-income children, especially children receiving child welfare services or children in foster care.

• Support proposals that strengthen the delivery of preventive services to children in foster care.

• Strengthen existing provisions of Medicaid that provide for continued Medicaid eligibility for adolescents departing foster care in order to ensure continued access to comprehensive treatment.

“The bottom line is Congress must demonstrate its commitment to our most vulnerable children by considering the needs of young people in foster care in any reform of Medicaid,” said Neal Halfon, one of the report’s authors and Professor of Pediatrics, Public Health and Public Policy at the UCLA Schools of Medicine.

The report was written by David Rubin, MD MSCE, Assistant Professor of Pediatrics, University of Pennsylvania School of Medicine, and Director of Research and Policy, Safe Place: Center for Child Protection & Health at The Children’s Hospital of Philadelphia; Neal Halfon, MD MPH, Professor of Pediatrics, Public Health and Public Policy, UCLA Schools of Medicine, and Public Health and Public Affairs Director, UCLA Center for Healthier Children, Families, & Communities; Ramesh Raghavan, MD PhD, Assistant Research Scientist, UCLA Department of Psychiatry and Biobehavioral Sciences; and Sara Rosenbaum, JD, Hirsh Professor and Chair, Department of Health Policy, The George Washington University School of Public Health and Health Services.

Casey Family Programs is the largest national foundation whose sole mission is to provide and improve—and ultimately prevent the need for— foster care.  The foundation draws on its 40 years of experience and expert research and analysis to improve the lives of children and youth in foster care in two important ways:  by providing direct services and support to foster families; and promoting improvements in child welfare practice and policy.  The Seattle-based foundation was established in 1966 by U.P.S. founder Jim Casey and currently has an endowment of $2 billion.  On the internet: Casey Family Programs, www.casey.org