May 2004

Background:

Under current law, many families are unable to obtain critically needed health care for their children with severe mental or physical disabilities. They either earn too much to qualify for Medicaid, are without employer health coverage, or have private insurance coverage with inadequate benefits for meeting their children's needs. In some tragic instances, families have been compelled to relinquish custody of their child to a state agency in order to access intensive mental health and support services in a residential facility.

Last year, the U.S. General Accounting Office (GAO) identified gaps in insurance coverage as one of the key factors in parents' decisions to relinquish custody of their children with disabilities to obtain Medicaid-funded mental health services. In just 18 states, the GAO identified more than 12,700 incidents of custody relinquishment for services in one year. If enacted, the Family Opportunity Act (FOA) would ease the burden of families who lack insurance or have limited insurance coverage and now struggle to pay for the mental health services their children desperately need.

House passage of FOA would allow children with serious mental disorders who are at risk of being placed in a residential treatment center, or who currently receive services in such a center, to access home and community-based services under a Medicaid waiver. (Only children in, or at risk of placement in, a hospital are now eligible for services under the waiver.)

Legislative History:

 Over four years ago, on February 13, 2001, Senators Grassley, Kennedy, Jim Jeffords (I-VT), and Tom Harkin (D-IA) introduced the FOA to allow middle-income families with children who have severe mental or physical disabilities to "buy-into" the Medicaid program. Access to Medicaid's comprehensive benefit of services would promote early intervention, ensure access to medically necessary services and help restore family security. APA took part in drafting this legislation and actively continues to support its enactment. On May 6, 2004, the Senate passed S. 622 by unanimous consent. The House companion bill (H.R. 1811), sponsored by Rep. Pete Sessions (R-TX), has 118 cosponsors. Additionally, Congress has reserved funding in the Senate Budget Resolution for FOA. If Congress passes and the President signs this bill into law, there will be funding available for this vital health and mental health legislation.

Take Action: Urge your Representative to Pass the Family Opportunity Act

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