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Financial Burden Deepening for Families of Children With Disabilities

The prolonged recession is deepening the financial burden for some of the country’s most vulnerable families, a new study indicates. Social work researchers at the University of North Carolina at Chapel Hill and Washington University in St. Louis, found more than a quarter of low-income families of children with disabilities are spending more than 3% of their total household incomes to pay for the children’s healthcare needs.

For a family of four living at the federal poverty level, the costs add up to about $1,200 a year, says Susan Parish, PhD, an associate professor at the University of North Carolina School of Social Work and lead investigator of the study.

“These are costs above and beyond any health insurance premiums or copays,” Parish says. “It might not sound like that much for families making $100,000 a year, but that’s a great deal of money for a family that only earns poverty level income.”

How much a family spends depends on the state where they live, says Parish. The study, which is based on a 2005 to 2006 national survey of children with special healthcare needs, appears in Pediatrics.

The researchers analyzed data involving more than 17,000 children. They found a strong relationship between a family’s healthcare expenses and the generosity of a state’s income eligibility policies for Medicaid and the State Children’s Health Insurance Program (SCHIP)—programs that are vulnerable to cuts as the economic climate has worsened and taken a toll on state budgets. Although federal regulations require that families living at or below the federal poverty level receive Medicaid and SCHIP coverage, states set their own eligibility standards. For example, state income caps for SCHIP eligibility in 2005 ranged from $19,350 to $67,725 for a family of four.

“These findings are based on data collected in 2005 and 2006 when the economy was going gangbusters,” says Parish. “The current recession makes the situation for families much worse. We must consider what families are forgoing if they are spending such a high proportion of their income on their children.”

— Source: University of North Carolina at Chapel Hill