According to the Tennessee Disability Coalition, a new TN TEFRA/Katie Beckett Waiver bill is progressing through the TN legislature. If approved, this bill will provide health insurance to children and adolescents with disabilities who don’t currently qualify for Medicaid because of their parent’s income.

The TN Katie Beckett Waiver bill would allow states to give Medicaid to children with disabilities as a way of preventing their placement in an institution, even if their parents earn too much for them to qualify.

Similarly, the TEFRA program provides Medicaid coverage to children with severe disabilities younger than 19 who require an institutional level of care, without using their family income as an eligibility criterion. The TEFRA program would benefit children who receive extended care in an institution and would make the eligibility determination based solely on the child’s income.

The current proposed bill addresses the need in TN for a Katie Beckett Program. The “Whereas” section that outlines the bill’s rationale establishes that the financial and personal costs of caring for a child with a long-term disability or complex medical need at home are often “excessive” and private insurance is insufficient. 

The bill amendment authorizes two departments of state government to implement this program. These are the TennCare Bureau as the Bureau of Medicaid in Tennessee and the Department of Intellectual and Developmental Disabilities as state law designates the department with overseeing policy and services for Tennesseans with intellectual and developmental disabilities.

The bill amendment specifies that to establish this program Tennessee shall submit an amendment to our state’s current Section 1115 Waiver to the Federal Centers for Medicare and Medicaid Services (CMS).

What is a Section 1115 Waiver? 
Federal guidelines impose some uniformity across states. Section 1115 of the Social Security Act allows states to use federal Medicaid funds in ways that depart from existing federal rules. Tennessee’s current Section 1115 waiver relies on per capita caps. Section 1115 Waivers and their amendments are approved at the discretion of the Secretary of Health and Human Services through negotiations between a state and CMS. They are generally approved for a three or five year period and then must be renewed. 

The “Whereas” section also introduces a two-part approach to Tennessee’s Katie Beckett Program.

Katie Beckett Program Part A
Part A would establish a pathway to Medicaid services and essential wraparound home-and community-based services for children (under age 18) at home who qualify as disabled individuals under §1614(a) of the Social Security Act, provided certain conditions are met, regardless of parent income and resources.

To be eligible, children will also need to meet a new level of care criteria that is yet to be designed. Were the legislation to be enacted, the TennCare Bureau would need to craft criteria specifically for children. Stakeholder input and advocacy will be necessary to ensure these are appropriate.

The bill amendment establishes a priority enrollment for Part A for children with the most significant disabilities or complex medical needs whose families are most likely to be financially burdened by medical expenses.

Part A authorizes the TennCare Bureau to require that parents of enrolled children purchase and maintain available private or employer-sponsored insurance if it does not exceed 5% of gross income. The bill amendment also authorizes TennCare to establish buy-in or premiums using a sliding fee scale based on parent or guardian income.

Katie Beckett Program Part B
Part B is designed as a Medicaid diversion plan. The bill amendment authorizes the Tennessee Department of Intellectual and Developmental Disabilities to administer Part B. It would offer a capped package of essential wraparound services and supports as well as premium assistance on a sliding fee scale for children. Children enrolled in Part B would not be enrolled in full TennCare/Medicaid.

What are wraparound services and supports?
The bill amendment describes that the Katie Beckett Program would provide supplemental benefits known as “wraparounds” to provide much needed services to support child health and family stability. These are the long-term supports and services traditionally provided as home-and community-based care. The bill amendment does not define the wraparound services the program would provide. Were the bill enacted, the TennCare Bureau would be responsible for determining this. Stakeholder input and advocacy would have a role to ensure that wraparound services included are those families need most. Wraparound services typically include things like: case management; personal care services; respite care; medical supplies; specialized therapies like physical, occupational, and speech therapy.

What determines eligibility for Tennessee’s Katie Beckett Program?
The bill amendment outlines that eligibility for Part A of the Katie Beckett Program will require that children qualify for institutionalization in an acute care hospital, nursing facility or intermediate care facility for individuals with intellectual disabilities.

Eligibility for Part B is extended to children who are also “at risk of institutionalization” in these settings.

The new level of care criteria developed for children will determine eligibility based on functional limitation. It is possible that there may be a separate criteria developed for each part of Tennessee’s Katie Beckett Program.

What number of Tennessee children might benefit from a Katie Beckett Program?
Tennessee does not currently operate a program like this. The Tennessee Disability Coalition has worked alongside the bill sponsors, the TennCare Bureau and partners including leading economists to develop our best estimates. We also looked at data from other state Medicaid Bureaus that serve children through a Katie Beckett Program. 

There are approximately 3,600 Tennessee children with long-term disability or complex medical needs who are not currently on TennCare and may benefit from a Katie Beckett Program.

What will this program cost?
Several major factors yet to be determined will impact the budget for Tennessee’s Katie Beckett Program. Sponsors, staff for the House TennCare Subcommittee, TennCare Bureau and Tennessee Disability Coalition are working to understand what the costs may be to meet the needs of our families. 

We are considering the potential cost if all 3,600 children were to be served. We also understand the political and budgetary realities of what funding may be available for this important program.

Our Position
The Tennessee Disability Coalition is grateful for the work of Representative Sam Whitson, Senator Kerry Roberts and the bill co-sponsors for their championing of a Katie Beckett Program for Tennessee. Tennessee’s middle-income families should not have to go bankrupt, nor have to give up custody of their child, nor get divorced, nor move to another state simply to get healthcare for their child with complex medical needs or long-term disability. 

It is critical that legislation define a robust program that provides real access to health care for our kids and relieves the devastating financial burden on families. The TennCare Bureau has proposed this two-tier model as a potentially cost-effective way to serve more families. The Tennessee Disability Coalition realizes the need to make limited dollars go as far as possible. It is equally important that the program design ensures that children receive needed services and families get the assistance they need to support their child at home.

What are next steps?
As of April 23, 2019, the TN House Finance Committee has passed their version of the state budget—which includes $27 million funding for the Katie Beckett bill! We are so grateful to the House Leadership, Sponsor Representative Sam Whitson and Representative Matthew Hill for championing this legislation. We anticipate that the House of Representatives will pass their version of the budget in their session tomorrow morning. Immediately afterwards, we will be holding a press conference with Speaker Glen Casada to share our gratitude. 

Once the full House of Representatives has passed their version of the budget, the House Finance Subcommittee will take up all the bills that were “put behind the budget” including the Katie Beckett Bill. We anticipate that the Subcommittee will pass the bill itself as written. Then the bill will go to the full House of Representatives for a vote.

The Senate will still need to consider its budget plan. It is critical that the Senate include funding for the Katie Beckett Bill in its version of the state budget as well. The House and Senate versions of the state budget will need to be aligned before the full Tennessee General Assembly passes a state funding plan for the coming fiscal year.