On any given day, over a half million American children and youth are living away from their families in foster care, generally prompted by issues of neglect or abuse. While the child welfare system is designed to keep children safe, that isn't enough. All children need and deserve to be connected permanently to a nurturing family that offers unconditional support.

"In many respects, we succeed at removing children from dangerous environments only to put them in a different kind of harm's way," says Casey Foundation President Douglas W. Nelson. "We simply cannot make any child truly secure until we can ensure that he or she will again become part of a loving and lasting family."

Three key steps to improving the child welfare system include improving federal child welfare financing, supporting measures to ensure permanent family connections for every child, and expanding Medicaid support so children get needed health services.

The way federal child welfare financing is now structured runs counter to key goals like seeking permanent family connections for every child or ensuring the well-being of children who have been maltreated. For example, the current system offers an open-ended entitlement to care for children removed from their families but only limited funds to provide more support to troubled families and prevent out-of-home placements in the first place.

Remedies include:

• Allow states flexibility to use their federal funding to prevent children from being placed in foster care and promote permanence through measures including reunification of families, adoption, and guardianship.
• Provide federal reimbursement to states for every child, regardless of family income, by no longer linking child welfare funding eligibility with the income standards in the long-abandoned Aid to Families with Dependent Children welfare program.
• Supplement current incentives offered to states for timely adoption with similar incentives for timely, safe, reunification and for permanent legal guardianship.

To ensure a healthy, enduring family relationship for all children—regardless of age, race, culture, national origin, special need, or complex circumstances—the federal government should:

• Focus special attention on populations most likely to be separated from families and least likely to return home in a timely fashion, if at all, such as African American, Native American, Latino, and immigrant populations, as well as older foster care youth. The federal government should report child welfare outcomes and require states to report them, disaggregated by race.
• Provide the special supports needed by older youth leaving the foster care system, such as expanded tuition assistance and continued Medicaid coverage to age 25.
• Build on promising state models that provide incentives, flexibility, services, and supports to respond differently when poverty, not maltreatment, is the primary threat facing a child in a case of alleged abuse or neglect.

Many children and youth in state custody, especially older youth aging out of foster care, go without needed health and mental health services.

Steps to address this issue include:

• Rescind recent Medicaid rules narrowing access to Medicaid rehabilitative and targeted case management services for children and youth in the child welfare system. Encourage the flexible use of Medicaid regulations to ensure that those in foster care get the health and therapeutic services they need.
• Expand Medicaid coverage to age 25 to ensure that youth and young adults aging out of the foster care system have their health needs met.