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Children with Special Health Care Needs under Health Care Reform

Policy Date: 1/1/1994
Policy Number: 9418

I. Statement of the Problem

All children in America deserve the right to grow in a nurturing environment that encourages their optimal development. This right applies to healthy and able-bodied children as well as children with significant long-term illnesses and chronic disabling conditions including those from unintentional injuries, violence, congenital anomalies, and other conditions. Improved prehospital, medical, and surgical care and the expansion of certain public programs, especially Medicaid, Title V of the Social Security Act, and the Individuals with Disabilities Education Act, have markedly improved the long-term survival, quality of life, and integration in their home communities of children with a variety of chronic illnesses and disabling conditions.1
Children with special health care needs are a relatively small proportion of the total population. An estimated 15% of children have some special health needs, but only 1% to 3% need intensive services. Estimates of the number of children with special needs show that:
• About 5% (nearly l0 million) of all children have some chronic health impairment;
• About 6% (4 million) of all children have a limitation of usual childhood activities;
• About 3% (2 million) of children have a disability severe enough to meet federal disability guidelines;
• About 1% (700 000) have both a disability and a low income that qualifies them for Supplemental Security Income.2
Most children with severe long-term illnesses currently survive to young adulthood. Important strides in the medical care of children with such diseases as cystic fibrosis or leukemia, in surgery for congenital heart disease, and in the treatment of very small newborns and children with injuries from unintentional injuries, violence, congenital anomalies, and other conditions have supported improvements in survival rates.3 At least 80% of children with severe chronic illnesses now survive to the age of 20, although often with disabilities that may be ameliorated only through adequate early intervention and coordinated health care.
Recent research and legislation affirm that this group of children need a comprehensive set of family- and community-based services. Much can be done to prevent some of these conditions and even more to prevent further disease or disability. Even though most children in America can obtain medical and surgical care for their chronic illnesses, significant gaps remain. For example:
Lack of access to basic health services. Children with special health care needs require screening programs and guaranteed access to prehospital, medical, and surgical care as well as comprehensive health insurance that ensures access to preventive and primary care in addition to needed specialty care. Chronic illness creates special jeopardy for poor rural and minority children. For example, children with reduced health status living below the poverty line use ambulatory physician services at substantially lower rates than able-bodied poor children.4
Restricted range of benefits. Even when they are insured, many families find that the increased costs of caring for a child with long-term illness are not met by their coverage. Access to medical and surgical services is often not balanced with access to a variety of other services that may greatly improve the long-term outcome and opportunities for independent living for these children. Thus, families face high out-of-pocket expenses for services such as medications, adaptive equipment, emergency care, home health care, long-term occupational therapy, physical therapy, and speech therapy that are not covered by their benefit packages. Furthermore, other limitations on benefits, such as lifetime ceilings, copayments, and annual benefit caps, pose significant hardships to families caring for a child with a long-term illness or disability.5
Illness-related stresses. Children with chronic illnesses are at greater risk of behavioral disorders than their able-bodied contemporaries. Preventive mental health services can diminish this risk and promote the mental health and well being of children and their families.6
Educational and vocational risk. Children with chronic illnesses and disabilities miss more school than their healthy classmates. Even when in school, they may be placed in inappropriate classrooms. Special health and procedure needs may be available only through special education–related prehospital services, although many of these children do not have cognitive deficits. Children with chronic illnesses and disabilities deserve educational counseling to support their participation in school. In addition, school nurses and other teaching professionals need to be educated in the support of these children. Special education services including Part H and Part B of the Individuals with Disabilities Education Act have supported the development of comprehensive multidisciplinary services for all children with or at risk for disabilities.
Need for a comprehensive service delivery system. The complexity of the lives of children with special needs and their families, along with their dependence on diverse providers and sources of reimbursement, often creates a difficult maze. Services needed by these children include nutritional services, genetic counseling, physical and occupational therapy, and respiratory therapy. Children with chronic illnesses or disabilities require a comprehensive range of services, while many of these services are not needed by other children in America, including access to high-quality, technologically sophisticated tertiary care and prehospital, medical, and surgical services. Few of these needs are specific to any given disease, but rather reflect the special services needed by chronically ill children because of chronicity itself. At the same time children with special health care needs require opportunities to be integrated fully into their communities and to be supported with opportunities to grow and develop as normally as possible like all children.
Case management and service coordination are critical components of quality care for children who are served by multiple agencies and providers. Respite care, financial counseling, and a wide range of family support services are required to support the role of parent as caregiver and partner in the delivery of health care. Families may also need services such as respite care and counseling to cope with the turbulence and demands of caring for a child with special needs. The coordination of services can be complex for families who must make sense of frequently conflicting advice from a variety of professionals. There are many models for how different professionals, including physicians, nurses, prehospital personnel, social workers, mental health professionals, teachers, and lay personnel can work together to provide excellent coordination. It is less important who coordinates services than that there be someone in the system specifically designated to carry out this function.7
Need for community-based services. Most medical services for children with long-term illnesses and disabilities are centered in major hospitals in larger cities. Yet many chronically ill children who live in smaller communities do not have adequate access to large tertiary care hospitals. Much effort has been made to support the development of high-quality prehospital, medical, and surgical services in these centers. Less attention has been given to community-level providers of needed services to ensure integration into community activities and schools. Services for all children with chronic illnesses should be offered in the community rather than in a distant hospital setting. Currently, public involvement with these children takes many forms. The largest public support derives from the tax subsidy of private health insurance as an employment-based benefit. Direct public efforts include Medicaid and the state Title V programs for children with special health care needs. It is the explicit responsibility of state Title V programs to provide enlightened leadership to the diverse public and private providers in the community by organizing and stimulating the provision of coordinated and comprehensive services for children with long-term illnesses and disabling conditions.
Emerging health care reform strategies are considering ways to ensure universal coverage and comprehensive benefits while containing costs. Federal and state policymakers must be apprised of the nature and scope of the population of children with special health care needs and the complexities involved in ensuring comprehensive care for this population. Regardless of the scope of benefits for children with special needs through a basic benefit package, the inherent disincentives and general lack of experience of managed care plans in serving children with special needs necessitate that these children and families have expert resources and advocates to assist them in obtaining and coordinating the medical and support services they require. Title V has the expertise and is currently charged with providing such coordination through federal statute. But many state programs still lack the resources and capacity to provide these services to all children with special health care needs.
Need for home-based health care services. Home care refers to services and interventions that support the ability of a family to meet the needs of an ill child at home and in the community. The need is urgent to improve the organization, implementation, and financing of home care for this population to enhance the capability of families to care for and nurture the development of their children with chronic illnesses over a long period of time.8 Home-based nursing services are essential for supporting the ability of families to care for and nurture their children as well as teaching parents how to manage their children's health needs. The financing of home care to allow for services over a long period of time is critical.
In summary, most children with chronic illnesses and disabilities now survive to young adulthood. To grow to their fullest potential in a nurturing home and community environment, they must have comprehensive and coordinated services. Although some services, especially specialty medical and surgical care, are available to most American children, other needed services are lacking. New policies should stimulate coordinated and comprehensive community-based services for these children and their families.

II. Recommended Action

The following list of specific steps must be taken at the federal and state levels:

A. Health Insurance for All
The nation must guarantee access to comprehensive, affordable coverage for all children with special health needs, regardless of preexisting medical conditions, age, likelihood of need for medical services, family structure, or employment status, as health care reform plans are developed and implemented. An improved system for health care financing must meet the following criteria:
1. Universal coverage. There should be no preexisting condition or other exclusion clauses and no waiting periods for coverage for children with special health care needs. Portability of coverage must also be guaranteed so that changes in employment, geographic area of residence, or income status do not jeopardize the continuity of health insurance benefits.
2. Comprehensive benefits. Any basic benefit package must be designed comprehensively to meet the complete preventive, primary, and acute care needs of all children, including those with chronic illnesses and disabilities. Further, access to more specialized health and related services should be coordinated through a supplementary wraparound package designed to meet the needs of this population and their families. An extended benefits package must include services such as vision care; home health care; nutritional counseling; adaptive equipment; health education; medications; specialized oral health care; hospice care; long-term occupational therapy; physical therapy; speech, language, and hearing services; and preventive mental health services, in addition to primary preventive and acute episodic health care services and other health services as needed.
3. Elimination of financial barriers. The cost of premiums and copayments or deductibles should be based on family income and not on individual health risk factors or need for particular services.
4. Equitable financing. Risk adjustment and reinsurance mechanisms that consider the particular issues presented by children with chronic illness and disabilities must be developed and implemented.
5. Organization and administration. Solutions designed for this specialized population must be created in conjunction with solutions for the general population of the uninsured. The particular role of state Title V agencies must be articulated and funding ensured to provide care coordination services to all children with special health care needs. The level of service should be determined by family need according to established guidelines with information and referral to intensive assistance.
6. Quality and efficiency assurance. Standards that define quality specialty health care for children must be adopted by all payers and providers, both public and private. The standards must guarantee a strong consumer role in both the design and the delivery of these services.
7. Payment mechanism. Provider reimbursement schemes should acknowledge the additional time required to provide comprehensive and high-quality specialty and primary family-centered care to children with chronic illnesses and disabilities. Further, the health care financing system should encourage delivery of services in the setting that provides quality care at the lowest cost.
8. Planning and evaluation with consumer and provider participation. Mechanisms must be established to ensure consumer participation in governance and redress of grievances.
9. Disease prevention and health promotion. Targeted care coordination and early intervention must be deployed to prevent secondary disabilities among children with special health care needs. Disease prevention and health promotion initiatives such as age-appropriate immunizations are as applicable for this population as for healthy children.
10. Consumer education. Public agencies must inform consumers and providers about individual rights, entitlements, and standards that define quality health care.
11. Attention to nonfinancial barriers to service. Support should be made available for demonstration of new models of comprehensive community-based programs (e.g., regional systems of care) for children with special health needs and their families. Further, public programs must ensure the coordination of health, education, and social services necessary to maximize the effectiveness of those services. Individualized service plans should be provided for children receiving service from two or more agencies.

B. Expanded Role of Public Health

Expanded public programs must include population-based assessment of need, quality assurance for specialty health care, interagency coordination and individual service planning, provision of needed support services not covered by health insurance, and support for the development of community-based and regionalized systems of care for children with special health care needs. Enhanced public programs must include the following components:
1. Needs assessment, monitoring, and evaluation. To conduct one of Title V’s core public health functions, Title V programs should identify linkages and coordination among agencies, institutions, organizations, and individuals providing comprehensive services, including health services. Information collected for these purposes must be monitored and evaluated to ensure that programs are in fact accomplishing their objectives.
2. Policy development. Advocacy for children with special health care needs and their families must be provided by the federal government and state and local health agencies. Guidelines for the care of children with special health care needs should be developed with broad consumer and provider involvement.
3. Assurance. The specialty and comprehensive care needs of this group of children, including primary prevention, suggest the need for a particular emphasis on the assurance of appropriate services and systems to support the optimal growth and development of children with chronic illnesses and disabilities. The following services have particular relevance:
a. Support services. An expanded array of support services required by children with special health care needs and their families must be provided. These services include psychosocial services, case management, information and referrals, early identification and screening, early intervention, family support, respite care, housing adaptation, individual service planning, parent-to-parent support, prevention, and parent training and education.
b. School-based health services. Cooperative agreements must be established between state and local health and education agencies to ensure access to school-based health and education services for children with special care needs regardless of eligibility for special education and related programs. School nurses and other teaching professionals need to be trained to support children with special health care needs.

C. Development and Expansion of Consumer Roles, Rights, and Responsibilities

Consumer organizations outside the public system should be involved in assisting families with information and support. Families and voluntary organizations should participate in a partnership with public agencies so that up-to-date information about needs can inform the design of services and policies. Families of children with special health care needs must also be guaranteed certain rights with regard to their children's health care. These include
• The right to be treated with respect and dignity.
• The right to be full partners in the design and delivery of health care for their children.
• The right to receive clearly written and understandable insurance policies that fully define benefits.
• The right to the delivery of health care services in a manner that supports the integrity of the family. This includes the right to coordinate community-based services and support services and the right to protect the fiscal integrity of the family unit.


  1. Ireys HT, Nelson RP. New federal policy for children with special health care needs: implications for pediatricians. Pediatrics. 1992;90:321–327.

  2. Newacheck PW, Hughes D, McManus M, et al. Meeting children’s long term care needs under the Health Security Act’s home and community based services program, January 1994. Prepared for the Child Health Consortium.

  3. Hobbs N, Perrin J, eds. Issues in the Care of Children with Chronic Illness. San Francisco, Calif: Jossey-Bass; 1985.

  4. Newacheck PW, Taylor WR. Childhood chronic illness: prevalence, severity, and impact. Am J Public Health. 1992;82: 364–370.

  5. Taylor AB, Epstein SG, Crocker AC. Health care for children with special needs. In: Schlesinger MJ, Eisenberg L eds. Children in a Changing Health System: Assessments and Proposals for Reform. Baltimore, Md: Johns Hopkins University Press; l990:27–48.

  6. Drotar D, Bush M. Mental health issues and services. In: Hobbs N, Perrin J, eds. Issues in the Care of Children with Chronic Illness. San Francisco, Calif: Jossey-Bass; 1985:514–550.

  7. Department of Health and Human Services. Developing community-based systems of services for children with special health care needs and their families: An overview. 155 pages. Maternal and Child Health Bureau Workgroup on Systems Development, June 1991.

  8. Perrin JM, Shayne MW, Bloom SR. Home and Community Care for Chronically Ill Children. New York, NY: Oxford University Press; 1993.