State Medicaid and SCHIP Program Characteristics & Financial Burden among Families having Children with Special Health Care Needs

Background and Purpose. Families face high financial costs in raising children with special health care needs (CSHCN), incurred for therapies, medical care, home modifications, assistive devices and other equipment, and elevated supervision needs. Previous research shows that absolute burden (dollar amount spent in a given year for CSHCN's needs) is highest for children with poor health, African-Americans and Latinos, those without insurance, and those with high income. Unlike absolute burden, relative burden (burden per $1,000 of family income) is associated with poverty. Poor families spend a greater portion of their income on their CSHCN than the non-poor. The variability across states in absolute and relative burden facing these families is significant. We investigated how low-income families' financial burden, related to caring for CSHCN, is associated with variability in the income eligibility thresholds of state Medicaid and SCHIP.

Methods. Data on low-income CSHCN and their families were from the National Survey of CSHCN (n=17,039), with a representative sample from each state. State Medicaid and SCHIP eligibility thresholds were from publicly-available sources. We used two-part multilevel logistic regression to model (1) the association between Medicaid and SCHIP program characteristics and the probability of a family having financial burden, and (2) among those families having financial burden, the levels of absolute and relative burdens. We controlled for state median income and child- and family-level characteristics, including income, race and ethnicity, child age, parental education, severity of condition, family status, participation in IDEA and type of insurance.

Results. Among low-income families, 61 percent reported having some financial burden. Of those with any burden, 30 percent reported expenditures between $250 and $500, 34 percent reported expenditures that exceeded $500, and 27 percent experienced burden exceeding three percent of income for the prior 12-month period. Families living in states with higher Medicaid and SCHIP income eligibility standards were 30 percent and 17 percent less likely to have expenditures over $500, respectively (compared to less than $250 burden). Those families living in states with higher Medicaid and SCHIP income eligibility standards were 23 percent and 32 percent less likely to have burden greater than three percent of total income, respectively (compared with burden under one percent total income).

Conclusions and Implications. Policymakers interested in reducing these vulnerable families' financial burdens should consider increasing the income caps for Medicaid and SCHIP eligibility. States are likely to cut their public health programs as they face difficult budget choices, and these cuts may be particularly devastating for families of CSHCN. President Obama signed SCHIP legislation on Feb 4, 2009, which allows states to cover children in families with income up to three times the federal poverty line. This is expected to cover approximately 4.1 million additional children. It is unclear if this expansion will sufficiently offset family financial burden. Further research is necessary, but these results suggest it will.