TEFRA & TEFRA Look-alike Programs

TEFRA State Plan Option for Severely Disabled Children (formerly Katie Beckett waivers)

Under the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), states may provide Medicaid coverage to children with severe disabilities, disregarding their family income, if these children require care at an institutional (hospital, nursing home or intermediate care facility) level.

When a child receives extended care in an institutional setting, family income is disregarded as a qualification for Medicaid. The TEFRA 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 choose to care for their child at home. Currently, 18 states and the District of Columbia have chosen to implement the TEFRA State Plan Option. Because states vary widely in the availability of institutional care for children and the clinical criteria for admitting children to these institutions, the numbers of children and youth with special health care needs (CYSHCN) who receive Medicaid benefits under this option also varies widely from state to state.

TEFRA Look-alike Programs

New Hampshire and Pennsylvania have implemented programs that are similar to the TEFRA option, but make use of state statutes or other state plan amendments. These programs extend Medicaid eligibility to a broader group of children with disabilities than the TEFRA programs.

New Hampshire’s Home Care Program uses a single pathway to Medicaid eligibility for children with disabilities under a state statute. It disregards parental income for children who meet Supplemental Security Income (SSI) clinical criteria and need an institutional level of care, including the type of care associated with Intermediate Care Facilities for the Mentally Retarded (ICF/MRs). The Home Care Program has enrolled 1,300 children with disabilities, including those with serious emotional disturbances, developmental disabilities, or physical disabilities, and thus is much broader than most TEFRA programs.

Under a Pennsylvania program called PH 95, family income is disregarded for all children who meet the SSI disability criteria.  Over 32,000 children whose families would otherwise ex­ceed Medicaid income limits receive Medicaid benefits through this state plan option.

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

PDF format. Printable version of table (PDF)

TEFRA State Plan Option

StateTEFRA 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
StateTEFRA State
Option Plan
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


Catalyst Center State Medicaid Surveys, 2010.

Musumeci, M. "Modernizing Medicaid Eligibility Criteria for Children with Significant Disabilities: Moving from a Disabling to an Enabling Paradigm," American Journal of Law and Medicine, 37(2011): 81-127.

Learn More

The TEFRA Medicaid State Plan Option and Katie Beckett Waiver for Children:
Making It Possible to Care for Children with Significant Disabilities at Home

TEFRA and FOA Medicaid Buy-in Programs: An Educational Worksheet from the Catalyst Center

Policy Brief: Expanding Access to Medicaid Coverage: The TEFRA Option and Children with Disabilities



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