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March 5, 2021 · 3 Comments

How to Get Funding Available for Residential Treatment for Children

Fund Treatment

In this article, we’ll explain how to get funding available for residential treatment for children and youth in need of services outside the home environment. If you know your child needs care but you need help to pay for it, we will explain the options available.

Table Of Contents
  1. How Much Does Residential Treatment Cost?
  2. Funding Available for Residential Treatment for Children and Youth
    • Medicaid
    • Private Insurance
    • Court System
    • School District
    • Foster Care System
    • Adoption Subsidy
    • Private Pay
    • Termination of Parental Rights (TPR)
    • Grants for Metal Health Services
  3. Frequently Asked Questions (FAQ) About Paying for Child & Youth Residential Treatment

How Much Does Residential Treatment Cost?

The cost of residential care varies widely depending on the type of services offered, but according to Pasedena Villa,

Prices for residential treatment range from $10,000-$60,000 per month (or about $320-1,930 per day) for full service programs.

-Pasedena Villa

Very few people can afford to pay for residential care on their own or “out of pocket”.

Residential care is very expensive and sadly there are times that children do not receive the help they need, not because the care isn’t available, but because there isn’t a way to pay for it.

This situation is not hopeless, though. Financial assistance for mental health treatment is available and we explore different options below.

Funding Available for Residential Treatment for Children and Youth

Here are ways that residential treatment is paid for.

Medicaid

Medicaid is the primary way many children receive residential treatment. A child may qualify for Medicaid if the parents’ income is below a certain threshold, if they child is in foster care or as part of an adoption subsidy package for a child who was in foster care.

If a family currently receives private insurance (such as through a parent’s employer), there are situations when the family can request Medicaid enrollment to cover costs not paid for with insurance. These are called “medically needy” or “spend down” plans. Some states also offer waivers for those who might not otherwise receive services.

Managing the Medicaid system can be tricky, so inquire about an advocate available who can help you get access to needed care for your child. These advocates are provided and paid for by the Medicaid system.

Private Insurance

Insurance companies (such as Blue Cross, Aetna, Cinga, and many others) typically cover a portion of the cost of residential treatment. This may mean that families are required to pay a deductible and then a percentage of the cost of care thereafter.

Insurance may cover only a portion of the care, such as medical and mental health care only. Insurance may also have a cap or total dollar amount they will cover.

If insurance determines to only pay for part of the needed care, parents have the option to appeal the decision. It may be wise to hire an attorney to help with appeals in these situations.

Court System

If a youth has committed a crime, placement will be made by a judge and the burden of cost will fall to the court system.

School District

Although rare, it is possible for a school district to pay for an out-of-district placement if parents can prove this is the least restrictive option and no in-district option is suitable to meet the needs of the child.

Typically, a school district pays only for the educational portion of a child’s placement in treatment.

Foster Care System

For children who are currently in foster care, the foster care system (and Medicaid) will pay for residential treatment.

If a child is not in foster care, there are times when he or she may be placed in foster care (either voluntarily, by the court system, or by the Department of Human Services) in order to fund treatment.

Please be aware that if your child is your biological child or adopted and is placed in foster care in order to fund treatment, you may be court-ordered to pay for part of your child’s treatment. This varies by state but can be up to 19% of the total amount of the child’s care.

If your child is adopted from foster care, this payment cannot legally be more than his or her adoption subsidy. If you adopted a high-needs child who now needs residential treatment, please click here for additional helpful information.

Adoption Subsidy

If your child was adopted from foster care, you might receive an adoption subsidy. Part of these subsidy funds can be used to pay for a child’s care. If the funds are insufficent to pay for needed services (as they often are), you can request that the funds be re-examined. Some states also have additional funding for higher-level services for special needs children who are adopted from foster care.

Private Pay

Parents can pay out of pocket for a child’s treatment. Many facilities offer a sliding scale or payment plan for these situations. Loans for treatment are also available.

Termination of Parental Rights (TPR)

When parents no longer wish to maintain a relationship with the child (most often this is the case with an adoption situation), they have the option to relinquish parental rights. Depending on the state, relinquishment is not easy to obtain. Often another adoptive family needs to be arranged before a judge will grant relinquishment.

In the case of a child with severe mental health or behavioral issues, a judge may grant relinquishment in order for the child to receive needed services.

If you feel that TPR is in the best interests of your family and your child, seek the help of an attorney who specializes in adoption issues.

Grants for Metal Health Services

While there are some grants available for mental health services, such as these SAMHSA grants and NIMH funding grants, typically these grants are for organizations who provide mental health care to the community, not individuals.

The American Counseling Association lists information about federal grants for counseling.

Here is a link with information about substance abuse treatment grants.

Frequently Asked Questions (FAQ) About Paying for Child & Youth Residential Treatment

Here are answers to commonly asked questions about finding funds for residential treatment for children.

Our insurance has denied treatment for our out-of-control son but he needs the help. What can we do?

Every insurance company has a resolution dispute process. If you feel that funds for treatment were wrongly denied, use this process to attempt to seek funds. You may find that hiring an insurance advocate or attorney is necessary. You can also seek funding from other sources.

We’ve reached the limit on what our insurance will pay for, but our child still needs more treatment. What do we do next?

In select situations, a family can request Medicaid enrollment to cover costs not paid for with insurance. These are called “medically needy” or “spend down” plans. Some states also offer waivers for those who might not otherwise receive services.

What grants are available for mental health services?

Most grants for mental health services are provided for larger programs that provide services to the community, but you can find more information about mental health grants at SAMHSA grants and NIMH funding.

Is there alternate funding available to residential treatment for teens and youth?

Funding for residential treatment comes from Medicaid, private insurance, courts, the foster care system, adoption subsidies, school districts, grants, and private pay funds. If you have not had success with one funding source, seek additional sources.

What is a free military school?

Unfortunately, there are no free military schools. All require parents to pay tuition. Click here for information about how to pay for military school.

How can we pay for therapeutic boarding school?

Almost all therapeutic boarding schools are private-pay which means that parents are required to pay tuition. Click here for 10 ways to pay for boarding school.

While finding funding for residential treatment for children and youth can be an overwhelming process, we encourage you not to give up. Help is available from a variety of sources in order to provide your child with the needed mental health care.

Child residential treatment funding

About Alyssa Carter

Alyssa is a certified Family Advocate who has worked with hundreds of parents and children. She has extensive experience working with children with attachment issues, RAD, foster care, adoption, trauma, developmental delays, autism (ASD), medical issues and more. She is a parent by birth and special needs adoption and was a foster parent to many children. She has personal experience placing a child into residential treatment successfully.

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Reader Interactions

Comments

  1. A concerned parent says

    August 17, 2022 at 5:54 pm

    I am sorry but with all the typos in your pages it really makes people think twice about taking you seriously.

    **It makes you look like an incompetent company/agency.

    Reply
    • Alyssa Carter says

      August 17, 2022 at 6:16 pm

      Thanks for your honest feedback. I apologize that the errors are a distraction. Like so many of us here, I am busy mom of children with special needs who is doing her best to juggle many responsibilities. My goal in creating the site was to get the information out that is desperately needed. I appreciate your grace with some typos that slip through in the editing process.

      Reply
      • Laquita Howell says

        August 24, 2022 at 2:07 pm

        IO don’t find anything wrong with typoes. It makes me feel like I am reading something that a real person has written as an adult with dislexia. I get comments like that all the time. Typeo does not take away from my ability to understand what you are saying at all. It does not make you seem less ligament or incompetent. People place so much attention to writeing but not enough on the messeage.

        Reply

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