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TEFRA / Katie Beckett Option: Medicaid Regardless of Parent Income

Verified by Daniel and Jessica Plasencia, parents who navigated this system in Florida. Last reviewed .

What it is

The TEFRA option, also called the Katie Beckett option, lets a state cover a disabled child on Medicaid based only on the child's own income and resources, ignoring the parents' income entirely. It is named for Katie Beckett, a child in the 1980s who could get Medicaid in a hospital but not at home. TEFRA is the Tax Equity and Fiscal Responsibility Act of 1982, which created this state plan option.

For a family whose income is too high for regular Medicaid, this is often the cleanest path to getting an autistic child covered, because coverage triggers the EPSDT mandate for ABA and therapies. See medicaid-epsdt-aba-coverage.

How a child qualifies

A child qualifies for the TEFRA state plan option when (source: CSG research memo, Sept 2024):

  • The child needs an institutional level of care (hospital, nursing facility, or intermediate care facility level), but
  • The child can be cared for safely at home, and
  • Care at home does not cost more than institutional care.

Eligibility is based on the child's level of care, not the diagnosis. Only the child's own income and resources count. The child's income limit is generally 300 percent of the SSI federal benefit rate (about $2,523 per month as cited in the 2024 CSG memo) with a $2,000 asset limit.

The single biggest advantage: no waiting list

A state using the true TEFRA state plan option cannot cap enrollment, so there are no waiting lists. Every child who qualifies must be covered. This is the key difference from an HCBS waiver, which can cap slots and have a years-long waitlist. See medicaid-hcbs-waivers.

Some states charge families a monthly premium on a sliding scale based on income (for example Idaho, Maine, Arkansas, Tennessee, per the CSG memo). A premium is allowed. A waiting list under the true state plan option is not.

State-by-state adoption (the load-bearing facts)

States deliver "Katie Beckett" coverage in one of three ways: the TEFRA state plan option, a Medicaid waiver (1915(c) or 1115), or both.

Verified national counts, as of 2024 (source: Council of State Governments research memo, Sept 27, 2024, citing CMS and KFF):

  • 44 states reported offering Katie Beckett coverage through a TEFRA state plan option or a Medicaid waiver.
  • Of those: 17 offer it through the state plan (true TEFRA, no waitlist), 22 offer it through a waiver (can have a waitlist), and 5 offer both.

That means roughly 22 states use the true TEFRA state plan option (17 state-plan-only plus 5 that do both). The remaining Katie Beckett states deliver it through a waiver, so a waitlist is possible there.

Verify your own state before relying on this

A clean, current, state-by-state list of exactly which states use the state plan versus a waiver changes over time and is not published in one authoritative federal table. Do not assume. Confirm your state two ways:

  1. Your state Medicaid agency (search "[state name] TEFRA Katie Beckett Medicaid"). Georgia, Washington, and many others have dedicated program pages.
  2. kidswaivers.org, which tracks each state's Katie Beckett and waiver programs.

States commonly reported as not offering a Katie Beckett pathway in the 2024 to 2026 period include Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Texas, Virginia, Washington, and Wyoming. Treat this as a starting point to check, not a final answer. Programs open and close, and some of these states offer a similar HCBS waiver instead. UNVERIFIED at the individual-state level. Confirm with the state directly.

What to do

  1. Search "[your state] TEFRA Katie Beckett Medicaid" and find the state agency page.
  2. Ask whether it is a state plan option (no waitlist) or a waiver (possible waitlist).
  3. If your state has no Katie Beckett option, ask about autism or developmental-disability HCBS waivers instead. See medicaid-hcbs-waivers.
  4. If the child already gets SSI, they usually already have Medicaid. See ssi-for-disabled-children.

Primary sources