Mission Statement: TEFRA is a program that allows disabled children to be cared for in their homes as an alternative to institutionalization.
Overview: TEFRA 134(a), a provision of the Tax Equity and Fiscal Responsibility Act of 1982, allows states to extend Medicaid coverage to certain disabled children. Also known as the Katie Beckett option, TEFRA is a category of Medicaid that provides care to disabled children in their homes rather than in institutions. In Arkansas, TEFRA is a “waiver” program. A “waiver” is an agreement between the federal government and the state’s Medicaid program that allows the state to “waive” some of its normal rules to provide Medicaid coverage. The Arkansas TEFRA waiver requires families to buy into the Medicaid program by paying a monthly premium based upon parental income.
To qualify for TEFRA benefits, a child: (1) must be disabled according to the Supplemental Security Income (SSI) definition of disability; (2) must meet the medical necessity requirement for institutional care; (3) must be younger than 19; (4) cannot have income that exceeds the Long-Term Care Medicaid limit; and (5) cannot have countable resources that exceed $2,000. Parental income and resources are not considered; only the income and resources of the child are counted. Appropriate medical services must be available to provide care for the child in the home, and the estimated cost of care in the home cannot exceed the estimated cost of care for the child in an institution. Children who receive SSI but lose coverage intermittently due to fluctuating parental income may be eligible for TEFRA benefits during the months they do not receive SSI. Children who live in institutions or who receive extended care in institutions are not eligible for TEFRA.
A parent or guardian can apply for TEFRA at the DHS office in the child’s county of residence. Applications also are accepted at Arkansas Children’s Hospital and by Children’s Medical Services service team workers.