Approximately 641,000 children spend some time in foster care each year. Most enter care because they have experienced neglect or abuse by their parents. Between 35% and 60% of children entering foster care have at least one chronic or acute physical health condition that needs treatment. As many as one-half to three-fourths show behavioral or social competency problems that may warrant mental health services. A national survey of children adopted from foster care found that 54% had special health care needs. Research on youth who aged out of foster care shows these young adults are more likely than their peers to report having a health condition that limits their daily activities and to participate in psychological and substance abuse counseling.
The Social Security Act addresses some of the health care needs of children in, or formerly in, foster care through provisions in the titles pertaining to child welfare (Titles IV-B and IV-E) and to the Medicaid program (Title XIX). Under child welfare law, state child welfare agencies are required to have a written plan for each child in foster care that includes, among other items, the child's regularly reviewed and updated health-related records. In addition, state child welfare agencies, in cooperation with state Medicaid agencies, must develop a strategy that addresses the health care needs of each child in foster care. Upon aging out of foster care, youth must receive from the state child welfare agency a copy of their health record and information about health insurance options and designating other individuals to make health care decisions on their behalf if they are unable to do so on their own.
States are not permitted to use federal child welfare program funds to pay medical expenses of children in care or those who left foster care due to their age or placement in a new permanent family. However, states can (and do) receive federal support through Medicaid to pay a part of the medical expenses, including well-child visits, dental care, and other services for many of these children and youth. In FY2010, the most recent year for which these data were available from all states, Medicaid agencies reported spending $5.754 billion to provide services to foster care children. Most of this Medicaid services spending was provided on a fee-for-services basis (82%) with the remainder provided through managed care arrangements.
Most children in foster care are eligible for Medicaid under mandatory eligibility pathways, meaning that states must provide coverage because these children receive assistance under the Title IV-E program, or, because they meet other eligibility criteria such as low income, or receipt of Supplemental Security Income (SSI). Children in foster care who are not eligible under mandatory pathways generally qualify for Medicaid because the state has implemented one or more optional eligibility categories allowing coverage. Further, children who leave foster care for legal guardianship and nearly all children with state-defined "special needs" who leave foster care for adoption retain mandatory eligibility for Medicaid provided they receive Title IV-E assistance. Additionally, special needs adoptees who receive state-funded support may also be eligible under an optional Medicaid eligibility pathway specifically for them.