Katie Beckett Medicaid Waiver: How to Apply for Your Child

The Katie Beckett waiver — also called the TEFRA option or the Katie Beckett Medicaid option depending on the state — is a Medicaid program that allows certain children with disabilities or complex medical needs to qualify for Medicaid coverage based on the child's own income and assets, not the family's household income.

For many families, this distinction matters enormously. Standard Medicaid eligibility is based on household income. A family that earns too much to qualify for Medicaid under standard rules may still be able to enroll their child through the Katie Beckett option — even if the parents are employed and have private insurance.

This guide explains how the program works, who qualifies, what it covers, and how to apply.

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Background: Why the Katie Beckett Option Exists

The program is named after Katie Beckett, an Iowa child who became ill in infancy and required ongoing medical equipment and nursing care. In the early 1980s, Katie qualified for Medicaid only if she remained hospitalized — the moment she went home, the family's income disqualified her. President Reagan approved a waiver that allowed states to extend Medicaid to children in similar situations regardless of family income.

The underlying logic: it is far less expensive for Medicaid to support a child at home with services than to pay for institutional or hospital-level care.

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What "Waiver" Means

The term "waiver" refers to a waiver of standard Medicaid eligibility rules — specifically, the rule that counts the parents' income when determining a child's eligibility. Under the Katie Beckett option, only the child's own income and resources are counted. Most children have little to no income, which means many who would otherwise not qualify can gain coverage.

Not all states operate the Katie Beckett option the same way. Some run it as a true waiver program with limited slots. Others have integrated it as a Medicaid state plan option (called the TEFRA option) with no enrollment cap. The program name, structure, and application process vary by state.

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Who Qualifies

To qualify for the Katie Beckett option, a child generally must meet three criteria:

1. Age. The child must be under 19 years old in most states. Some states set a lower age limit.

2. Medical need. The child must require a level of care that would otherwise be provided in a hospital, nursing facility, or intermediate care facility. This does not mean the child must be hospitalized — it means their care needs are at that level of intensity. Common qualifying conditions include:

• Medically complex diagnoses requiring ongoing skilled nursing care, specialized equipment, or multiple therapies
• Significant developmental disabilities requiring support with daily living activities
• Conditions requiring ventilator support, feeding tubes, or other technology-dependent care
• Severe autism with significant support needs
• Cerebral palsy, spina bifida, Down syndrome with complex medical needs
• Rare genetic disorders with ongoing medical management needs

3. Income and assets. Only the child's own income and resources are counted. This means most children with disabilities will meet the financial eligibility standard even if their parents earn above the standard Medicaid income limit.

Not every child with a disability will qualify. The medical necessity standard is real — the child's care needs must be at the level of institutional care even if provided at home. A child with mild ADHD would not meet this standard. A child with a severe neurological condition requiring daily skilled nursing would.

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What Katie Beckett Medicaid Covers

Coverage varies by state and by how the program is structured, but Katie Beckett Medicaid can cover services that private insurance often does not, including:

• Skilled nursing care at home
• Physical, occupational, and speech therapy — often with higher session limits than private insurance
• Durable medical equipment (DME) — wheelchairs, communication devices, oxygen equipment, feeding pumps
• Home health aide services
• Personal care services — assistance with daily living activities
• Behavioral health services — including ABA therapy for autism in states where it is covered
• Medications — Medicaid typically covers a broader formulary than private insurance
• Respite care — in some states, through the waiver component
• Specialist visits and hospitalizations

In states where Katie Beckett Medicaid also includes HCBS (Home and Community Based Services) waiver benefits, the coverage can extend to:

• Respite care for families
• Day programs or supported employment
• Assistive technology
• Environmental modifications (ramps, accessible bathrooms)

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How to Apply

Step 1: Determine your state's program name and structure. The Katie Beckett option is called different things in different states. Search your state name + "Katie Beckett Medicaid" or "TEFRA option" to find your state's program page. Some states call it the "Model Waiver," the "Home and Community Based Services Waiver," or simply a specific program name.

Step 2: Contact your state Medicaid agency. The application is submitted through the state Medicaid agency (not a hospital or doctor's office). In many states, you can also contact the state's Department of Developmental Services or Department of Health, which may administer the waiver component.

Step 3: Gather documentation. You will typically need:

• Proof of the child's age (birth certificate)
• Proof of the child's income and assets (typically minimal for a child)
• Medical records documenting the child's diagnosis and care needs
• A physician's statement or letter of medical necessity describing the level of care required
• Documentation of any current services or equipment the child receives

Step 4: Complete the Level of Care determination. The state Medicaid agency — or a contracted assessor — will review your child's records and conduct an assessment to determine whether the child meets the medical level of care standard. This is the gatekeeping step. The assessment typically includes a review of medical records and may include a home visit or interview.

Step 5: Wait for an eligibility determination. Processing times vary by state. If approved, Medicaid coverage is retroactive to the application date or the date the child first met eligibility in some states.

Step 6: If denied, appeal. If your child is denied, you have the right to appeal. Denials are sometimes based on documentation gaps rather than true ineligibility. Request the denial in writing, review the reason, and consider reapplying with additional documentation or requesting a fair hearing.

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Important Considerations

The program may have a waitlist. In states that operate Katie Beckett as a waiver program (rather than a state plan option), there may be limited slots and a waitlist. Apply as early as possible — waitlist position is typically based on application date.

Katie Beckett Medicaid can coordinate with private insurance. If your child also has private insurance, Medicaid typically acts as the secondary payer, covering costs not paid by private insurance. This can significantly reduce or eliminate out-of-pocket costs.

Approval requires ongoing renewal. Katie Beckett eligibility must be recertified periodically (often annually). Keep documentation of your child's care needs current so renewals are processed without gaps.

Eligibility ends at 18 or 19. Parents need to plan for the transition to adult Medicaid programs before the child ages out of Katie Beckett. Adult programs have different eligibility rules and may include HCBS waivers with their own waitlists. Begin that planning early.

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Frequently Asked Questions

Does the Katie Beckett waiver affect my child's SSI? The Katie Beckett option for Medicaid is separate from Supplemental Security Income (SSI). Having Katie Beckett Medicaid does not automatically entitle a child to SSI, and receiving SSI does not automatically qualify a child for Katie Beckett. They are evaluated separately, though many children who qualify for one may qualify for the other.

My child has private insurance. Can they still get Katie Beckett Medicaid? Yes. Having private insurance does not disqualify a child from Katie Beckett Medicaid. When both coverages exist, private insurance pays first and Medicaid covers remaining costs.

What if my state's waitlist is very long? Apply now and request to be placed on the waitlist immediately. Some families wait years. While waiting, document your child's care needs carefully — this strengthens the application and any subsequent appeals.

Can the Katie Beckett waiver pay for ABA therapy for my child with autism? It depends on the state. Medicaid is required by CMS guidance to cover medically necessary behavioral health services for children, which in many states includes ABA therapy for autism. Whether it is covered under the specific Katie Beckett program in your state depends on how the program is structured. Contact your state Medicaid office or a benefits counselor for state-specific information.

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Navigating Medicaid programs for children with disabilities involves a lot of moving parts. Our Government Benefits Checklist covers the full range of federal and state programs your child may qualify for — including SSI, Medicaid waivers, IDEA services, and more — organized by diagnosis and age so nothing falls through the cracks.

For more on related programs and school-based services, visit our Early Intervention hub or our Transition Planning hub for information on adult services planning.

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Disclaimer: This post is for general informational purposes only and does not constitute legal or benefits advice. Program details, eligibility rules, and availability vary significantly by state. Contact your state Medicaid agency or a certified benefits counselor for guidance specific to your child's situation.