TEFRA

Under the Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 (PL No. 97-248, Section 134), states may provide Medicaid coverage to children with severe disabilities younger than 19 who require a level of care that could be reasonably provided in a hospital, skilled nursing facility, or an intermediate care facility for individuals with intellectual disabilities (ICF/IID), without using household income as an eligibility criterion.

When a child receives extended care in an institutional setting, Medicaid disregards family income as an eligibility requirement and makes the determination based solely on the child’s income. The TEFRA/Katie Beckett State Plan Option makes it possible to do the same for a family whose child requires care at the level provided in an institution, but who can safely be cared for at home, as long as it is cost neutral to the state to do so. Currently, 18 states and the District of Columbia have chosen to implement the TEFRA/Katie Beckett State Plan Option. Because states vary widely in the availability of institutional care for children and in the clinical criteria they use for determining a child’s level of care needs, the number of children and youth with disabilities who receive Medicaid benefits under this state option varies widely from state- to-state.

In Minnesota, the TEFRA program is for children who require an institutional level of care. Children are eligible as a household of one up to 100% FPL or with an income spend-down, but without regard to parental income. Families may have to pay a monthly parental fee based on family size and income.

TEFRA Look-alike Programs 

Two states have implemented programs that are similar to the TEFRA option, but which make use of state statutes or other state plan amendments rather than the TEFRA option. These programs extend Medicaid eligibility to a broader group of children with disabilities than a TEFRA program.

In Arkansas, families whose children qualify for TEFRA Home Care for Children (a look-alike program) may be assessed on a sliding-scale fee based on income. Title V/CSHCN staff explain the fee structure and provide an estimate of the premium a family would have to pay to help them decide if the fee would be more or less than the out-of-pocket expenses they are currently paying for their child’s medical services.

New Hampshire’s Home Care for Children with Severe Disabilities program uses a single pathway to Medicaid for children with disabilities under a state statute. It disregards parental income for children who need an institutional level of care, including the type of care associated with Intermediate Care Facilities for Individuals with Intellectual Disabilities (ICF/IID). This includes children with disabilities, including those with serious emotional disturbances, developmental disabilities, or physical disabilities, and thus is much broader than most TEFRA programs.

Other Alternate Pathways to Medicaid for Children with Disabilities

Pennsylvania Medicaid has an eligibility category for children who meet the SSI disability criteria, but whose household income and assets exceed the SSI resource limits. Unlike TEFRA, the state does not require the child to need an institutional level of care. Similar to TEFRA, the PH-95 Children with Special Needs pathway to medical assistance disregards family income. Regardless of household income, in order for a child with disabilities to be eligible for PH-95, the family must first apply for SSI for the child. Once the Social Security Administration deems the child ineligible based on household resources, the child can then apply for PH-95 as a family of one. Families do not pay co-pays, participation fees, or monthly premiums for this type of Medicaid coverage for a child with a disability. PH-95 can be used as the child’s sole form of health insurance or to supplement other insurance the family might have that also covers the child. Generally, if the family has other health insurance, they must keep the child on it. If the states determines it is financially beneficial to do so, it will help the family pay the private insurance premiums and use PH-95 to supplement the child’s coverage and reduce the family’s out-of-pocket expenses for the child’s deductible, co-insurance, or co-payments. However, if the other health insurance does not provide access to needed services, such as behavioral health services, therapies, diapers, or nutritional supplements, or if the child’s providers are not in the health plan’s network, with prior authorization, the family can opt out of other coverage for the child and use PH-95 as the child’s sole form of insurance.  


TEFRA State Plan Option

State TEFRA State Option Plan
Alabama N
Alaska Y
Arizona N
Arkansas Look-alike program
California N
Colorado N
Connecticut N
Delaware Y
District of Columbia Y
Florida N
Georgia Y
Hawaii N
Idaho Y
Illinois N
Indiana N
Iowa N
Kansas N
Kentucky N
Louisiana N
Maine Y
Maryland N
Massachusetts Y
Michigan Y
Minnesota Y
Mississippi Y
Missouri N
State TEFRA State Option Plan
Montana N
Nebraska Y
Nevada Y
New Hampshire Look-alike program
New Jersey N
New Mexico N
New York N
North Carolina N
North Dakota N
Ohio N
Oklahoma Y
Oregon N
Pennsylvania N
Rhode Island Y
South Carolina Y
South Dakota Y
Tennessee N
Texas N
Utah N
Vermont Y
Virginia N
Washington N
West Virginia Y
Wisconsin Y
Wyoming N
  19 TEFRA/2 Look-alike
State TEFRA State Option Plan
Alabama N
Alaska Y
Arizona N
Arkansas Y
California N
Colorado N
Connecticut N
Delaware N
District of Columbia Y
Florida N
Georgia Y
Hawaii N
Idaho Y
Illinois N
Indiana N
Iowa N
Kansas N
Kentucky N
Louisiana N
Maine N
Maryland N
Massachusetts Y
Michigan Y
Minnesota Y
Mississippi Y
Missouri N
Montana N
Nebraska Y
Nevada Y
New Hampshire Y
New Jersey N
New Mexico N
New York N
North Carolina N
North Dakota N
Ohio N
Oklahoma Y
Oregon N
Pennsylvania N
Rhode Island Y
South Carolina Y
South Dakota Y
Tennessee N
Texas N
Utah N
Vermont Y
Virginia N
Washington N
West Virginia Y
Wisconsin Y
Wyoming N
  19 Total

Source: O’Malley Watts, M., Cornachione, E., and Musumeci, M. Medicaid Financial Eligibility for Seniors and People with Disabilities in 2015. (March 2016). The Kaiser Commission on Medicaid and the Uninsured. Available at http://files.kff.org/attachment/report-medicaid-financial-eligibility-for-seniors-and-people-with-disabilities-in-2015

 


RESOURCES RELATED TO TEFRA