Health Conditions, Utilization, and Expenditures of Children in Foster Care. Introduction


Little is known about many of the health-related characteristics of children in foster care, such as their health status, health care utilization, and expenditures. Existing data provide only a limited snapshot of children in foster care, due to incomplete and inconsistent reporting across states (U.S. House of Representatives 1996). Ongoing concerns, however, about the adequacy of health care services for children in foster care make such information essential, especially with the increasing role of managed care organizations in providing health care to this population (National Academy for State Health Policy 1999).

Most children in foster care are eligible for Medicaid coverage although such coverage is by no means automatic for a large share of children. Instead, Medicaid eligiblity is based on a patchwork of provisions that varies across states (English and Freundlich 1997). The most direct pathway is through the "IV-E linkage." Children in foster care automatically are eligible for Medicaid coverage if they receive Title IV-E foster care assistance.(1) Similarly, children receiving Title IV-E adoption assistance due to special needs are automatically eligible for Medicaid, but the adoptive parents must apply for coverage.(2)

Foster care children who are not "IV-E eligible" can qualify for Medicaid through one of the other mandatory eligibility categories (such as the poverty-related Medicaid expansions) or through one of the optional categories (for example, qualifying as medically needy after "spending down" to meet Medicaid income requirements). According to English and Freundlich (1997), "there is no consistency concerning the degree to which children in foster care or receiving adoption assistance are assured of having Medicaid coverage."

Children in foster care are of special concern to policymakers because they are a particularly vulnerable population. Many of these children have physical, emotional, or developmental problems, frequently stemming from abuse or neglect, substance abuse by their mothers during pregnancy and beyond, or their own substance abuse. This means that the foster care population often has special health care needs, needs that are often "unknown and unmet" (General Accounting Office 1995).

Recognizing the special  and largely unmet  health care needs of this population, the Child Welfare League of America (CWLA), in collaboration with the American Academy of Pediatrics (AAP), developed Standards for Health Care Services for Children in Out-of-Home Care (CWLA 1988). The introduction to the standards states:

As a society we have failed to meet the health needs of many of the children in out-of-home care. Most of these children have been medically neglected or abused before placement and suffer from a higher than average incidence of serious health problems when they enter the out-of-home care system. Failure to diagnose and treat these children adequately upon their entry into the out-of-home care system may mean community neglect is allowed to replace parental abuse or neglect.

A recent task force report concerning the state of health care for foster care children in California reinforced this assessment, declaring that the health system for foster children is "code blue." The task force found that health care assessments are not routinely performed, that providers are not willing to serve this population, and that treatment frequently is delayed due to red tape and paperwork. These problems are compounded by inadequate documentation of children's medical histories (California State University 1998).

A recent review of the health care needs of children in foster care identified a variety of obstacles that impede access to care (Simms and Halfon 1994). These include:

  • Lack of health care policies among child welfare agencies that result in "poor quality, crisis-oriented care"
  • Barriers in financing health care despite Medicaid coverage, such as lack of providers willing to accept Medicaid, delays in obtaining Medicaid cards, and delays in obtaining authorization for services
  • Lack of a "medical home" and continuity of relationships with the same providers
  • Complexity of required services, such as multiple evaluation and treatment services, and the burden of coordinating multiple appointments
  • Lack of stable and continuing relationships with adults who are familiar with and can advocate for children's needs

Simms and Halfon identified a broad research agenda for evaluating the services provided to children in foster care. At the top of their agenda was the recommendation that future studies provide a clearer understanding of the "health status, utilization of health care services, and the natural history of children's health care" in out-of-home care. This study attempts to address this research priority.

In addition, past research on the health conditions and utilization of health care services for foster care children has generally focused on a small number of children in a few locations. This study expands on previous research by using State Medicaid Research Files (SMRF) from three states (California, Florida, and Pennsylvania).

Anecdotal evidence suggests that there is a high level of dependence on Medicaid to meet the health care needs of children in foster care; yet some suggest that there is a high degree of variability across states in the extent to which children in foster care utilize Medicaid-reimbursable services (English and Freundlich 1997). Among the factors that may contribute to state level variation are: (1) variations in the types of services covered by Medicaid, particularly optional services; (2) the extent to which states have implemented the early and periodic screening, diagnosis, and treatment (EPSDT) program under Medicaid; (3) the level of understanding the among child welfare workers about the potential role of Medicaid in serving the foster care population; and (4) the effectiveness of child welfare workers and foster parents in advocating for the needs of children (English and Freundlich 1997).

This study was funded by the Office of the Assistant Secretary for Planning and Evaluation (ASPE) in the Department of Health and Human Services to inform policymakers about the health care of children in foster care who were enrolled in Medicaid. The following research topics were addressed by this study:

  • What are the demographic characteristics of children in foster care, and how do they differ from those of other low-income children?
  • What are the Medicaid eligibility dynamics among children in foster care, and how do they differ from those of other low-income children?
  • What are the diagnosed health conditions among children in foster care, and how do they differ from those of other low-income children?
  • What are the Medicaid expenditure and utilization patterns of children in foster care, and how do they differ from those of other low-income children?
  • How do the diagnosed health conditions, utilization, and expenditure patterns differ within subgroups of the foster care population?

This report contains three additional chapters. Chapter II describes the data source and methods. Chapter III presents the results and Chapter IV discusses the implications of our findings.



1.  Title IV-E of the Social Security Act provides federal matching funds to states for payments on behalf of children who have been removed from their homes, provided they were receiving cash assistance prior to placement (or were eligible for assistance) and provided that reasonable efforts were made to prevent removal (English and Freundlich 1997; Schneider and Fennel 1999).

2.  Children may have special needs because of their age, race, ethnicity, membership in a sibling group, or health status (such as a physical, mental, or emotional condition) (English and Freundlich 1997).