In recent years, state Medicaid programs have implemented significant change and innovation in delivering health and behavioral health services. Prepaid capitated financing and the provider networks created by Medicaid managed care expansions have altered systems of medical and mental/behavioral health. Most children in foster care receive services from the same community-based providers that serve low-income and publicly insured children and that are affected by managed care transitions. Most of these new prepaid delivery models have not been fully evaluated to determine their impact on access to services for children during their entry to foster care, placement, and exit from protective custody. Key health care financing issues for foster children continue to include Medicaid eligibility, enrollment and retention procedures, benefit limitations, payment mechanisms, transition procedures upon return to the biological family, use of managed care, and payment adequacy, among others. This brief presents a national overview of financing policies and their impact from the perspectives of state Medicaid, child welfare, and mental health agencies by evaluating Medicaid policies on eligibility, enrollment, retention, and coverage of physical as well as dental, developmental, and mental health services for children in foster care and comparing the perspectives of state child welfare agencies and state Medicaid programs on eligibility and coverage. The authors conclude that there are gaps in coverage, services that are not being reimbursed, and other administrative problems that result in incomplete coverage. Moreover, child welfare and mental health agencies charged with assuring that children in foster care receive appropriate, timely, and high quality health services report difficulty paying for needed services. This shows that states may be having difficulty implementing the ASFA requirement to promote children's well-being. Key recommendations and action steps are discussed. (Contains 4 figures, 2 tables, and 2 endnotes.)