The Katie Beckett Option: Which States Let Disabled Children Qualify for Medicaid Regardless of Parental Income

If you’ve got a child with a significant disability and someone has mentioned “Katie Beckett” to you, they’re talking about one of the more quietly important options in the Medicaid system. It’s not a program you’ll find advertised on a billboard, and a lot of caseworkers outside of pediatric specialty circles don’t bring it up unless asked directly. But for families whose income is too high for regular Medicaid, yet too low to cover the cost of caring for a child with serious medical needs, it can be the difference between managing at home and not managing at all.

The option gets its name from a girl in the 1980s who needed a ventilator and other round-the-clock medical support. At the time, the only way Medicaid would pay for her care was if she stayed in a hospital, because that’s where the rules only looked at *her* income, not her parents’. Once she went home, her parents’ income got counted, and they made too much to qualify. Her family and clinicians pushed for a change that let states ignore parental income for kids like her, as long as the care they needed could safely happen at home instead of in an institution. That change became what’s informally called the Katie Beckett option, and it’s been available to states as a choice, not a requirement, ever since.

How household income normally blocks disabled kids from Medicaid, and how this option waives it

Under the regular rules, a child’s Medicaid eligibility is tied to the household they live in. This is called “deeming” — the state treats a portion of the parents’ income and resources as if it belonged to the child when deciding whether the child qualifies. For most families, that’s a reasonable way to run things. But it creates a strange gap for kids with expensive, ongoing medical needs: a two-income household earning a solid middle-class wage can still be financially wrecked by the cost of nursing care, specialized equipment, or therapies for a child with a severe condition, and that family won’t qualify for Medicaid through the normal income-based door.

The Katie Beckett option works by setting that deeming rule aside for an eligible child. Instead of looking at what mom and dad earn, the state looks only at the child’s own income and resources, which for most kids is zero or close to it. That alone is usually enough to open the door to Medicaid, provided the child also meets a medical and institutional-level-of-care standard described further down.

States that offer a Katie Beckett-style pathway vs. states that only offer it through an HCBS waiver

Here’s where it gets genuinely confusing for families moving between states, because there are two different legal roads that can lead to the same destination, and they don’t behave the same way once you’re on them.

Some states have adopted what’s called the “TEFRA option” or state-plan Katie Beckett eligibility. Because it’s written into the state’s Medicaid plan, it generally works like an entitlement — if your child meets the criteria, the state can’t turn you away for lack of funding, and there’s no enrollment cap.

Other states don’t have that state-plan option at all. Instead, they offer the same basic idea — ignoring parental income for a child with significant medical needs — only through a Home and Community-Based Services (HCBS) waiver. Waivers are federally approved but state-run, and almost all of them come with a fixed number of enrollment “slots.” Once those slots are full, new applicants go on a waiting list, sometimes for years, regardless of how clearly their child qualifies medically.

A third group of states offers both: a waiver program and a true Katie Beckett state-plan option running side by side, which usually gives families more than one route in. And a small number of states don’t offer any version of this at all, meaning a child in that state is stuck with standard income deeming no matter how severe the medical need.

Because this landscape shifts as state legislatures and Medicaid agencies change their plans, the most reliable thing you can do is call your state Medicaid agency or your state’s Medicaid waiver unit directly and ask, in plain language, “Does this state have a Katie Beckett or TEFRA option, and is it separate from your HCBS waivers?” Don’t assume that because a neighboring state has it, yours does too, or that the version your state has works the same way.

Medical and functional criteria used to decide if a child qualifies

Every version of this pathway, whether it’s a state-plan option or a waiver, requires the child to meet what’s called an “institutional level of care.” In plain terms, the state has to be convinced that without the services being requested, the child’s condition is serious enough that they’d otherwise need to be in a hospital, nursing facility, or similar institutional setting to be safe and cared for.

States differ quite a bit in how that gets evaluated. Some rely heavily on a treating physician’s certification and medical records, with a fairly broad read of what counts as “institutional level.” Others use a more detailed functional assessment tool that scores a child’s ability to do things like eat, move, communicate, and manage medical equipment, and sets a specific threshold score the child has to meet or exceed. A condition that clears the bar easily in one state’s assessment might land right on the borderline in another state’s, even though the child’s actual day-to-day needs haven’t changed at all.

This is also where the distinction between a diagnosis and functional need matters. Having a specific diagnosis doesn’t automatically qualify a child in any state; what states are measuring is the level of care the condition requires. Two kids with the same diagnosis can have very different functional needs, and the assessment is built around the latter, not the former.

Waitlist realities: states with no cap vs. states with capped enrollment slots

This is the part families moving across state lines feel most sharply. If a family lived in a state with a true state-plan Katie Beckett option, their child may have been approved relatively quickly once medical eligibility was established, because there’s no slot limit to run into.

Move to a state that only offers this through an HCBS waiver, and the picture changes. Waiver programs typically have a legislatively set number of total enrollment slots. When all those slots are filled, the state maintains a waiting list, and movement off that list depends on how often slots open up — which is usually tied to how often existing enrollees leave the program, not how urgently a new child needs services. Depending on the state and the specific waiver, that wait can run anywhere from several months to several years.

Some states manage multiple waivers aimed at different populations, and a child might be eligible for more than one, each with its own separate waitlist and slot count. It’s worth asking specifically which waiver a caseworker is referring to, because “the waiver” can mean different things even within one state’s system.

What happens to this coverage if a family moves to a state without the option

Medicaid eligibility doesn’t transfer across state lines. Each state runs its own program, and moving means reapplying from scratch under that state’s rules, even if your child was approved and stable under a Katie Beckett pathway somewhere else.

If you move from a state with a state-plan option to one that only has a capped waiver, your child’s coverage doesn’t carry over, and you may be looking at a waitlist with no guarantee of a timeline. If you move to a state that offers no version of this option at all, your child’s Medicaid eligibility will likely be determined entirely by household income going forward, the same as any other child in that state. That’s a hard reality to run into after a move has already happened, which is exactly why it’s worth sorting out before boxes get packed.

Questions to ask your state Medicaid office before relocating with a disabled child

Before a move, it’s worth getting specific answers in writing or by phone from the Medicaid agency in the state you’re heading to. A few questions worth asking directly:

Does this state have a Katie Beckett or TEFRA state-plan option, separate from any HCBS waiver?

If the only pathway is a waiver, what is the current waitlist length, and how is the waitlist order determined?

What functional or medical assessment tool does the state use to decide institutional level of care, and can a caseworker walk through how my child’s current records would likely be evaluated?

Will services and equipment my child currently has, such as nursing hours or durable medical equipment, need a new prior authorization once we move, even after Medicaid eligibility is approved?

Is there a transition or “continuity of care” provision for families relocating with an existing Medicaid-funded care plan, or does the clock reset completely?

Getting these answers ahead of time won’t guarantee a particular outcome, but it will tell you what you’re actually walking into, which is the whole point of comparing states before you commit to one.