For years, Sharon and Doss Steed have depended on a little-known Georgia Medicaid program called the Katie Beckett waiver, designed, quite literally, to keep families together.

For most of their 16-year-old daughter Merrell's life, it's helped the Franklin County couple pay for the hundreds of thousands of dollars in therapy and treatment needed by Merrell, who suffers from autism. The brain disorder severely affects the teen-ager's ability to communicate and socially interact with other people, and shows up in surprising ways.

Talking is not a strong point, for example, but Merrell, a talented pianist, plays duets with her guitar-playing father and sometimes weeps when she hears Brahms.

Now, thanks to recent changes in state rules, the Steeds may lose the state help that's allowed them to keep them going financially.

For years, workers in the state Department of Human Resources approved the family for help from the Katie Beckett waiver, meant to help families with incomes too high to qualify for Medicaid or PeachCare, state programs which provide no- or low-cost health insurance.

Though the Steeds' private insurance pays for most costs, even a 10 percent co-pay on medical costs like Merrell's is a financial burden enough to sink most family budgets. Born premature in 1989, Merrell also suffered other medical complications as a child. Medical bills in her first year of life alone amounted to $500,000, said Sharon Steed.

The Katie Beckett waiver program, named for the Iowa girl whose parents convinced President Ronald Reagan to authorize Georgia's and 19 similar state programs in 1982, gives financial help up through the age of 18 when a child's disabilities are severe enough to warrant long-term institutional or skilled nursing care. It's called a waiver because normal federal rules for how Medicaid money can be spent were waived -with federal approval - to create it. Funded partly by state and partly by federal dollars, it's available to help families who want to keep their children at home - though the rules say parents must demonstrate that the cost of keeping their child at home is less than the cost of institutionalization.

Two years ago, the state of Georgia changed the rules, however, saying many children whose families were getting the help did not have disabilities severe enough to qualify.

Of about 6,000 families getting aid, by January about 1,600 had been denied continuing coverage in the program, which requires annual renewal, said Heidi Moore, an Alpharetta woman who has become an advocate for the thousands of families who depend on the Katie Beckett waiver.

The Steeds are one of those families denied.

They appealed their first denial, but their appeal also was denied. Now, they're moving toward a formal appeal hearing, which could be costly: Under state rules, the family can be required to pay for all treatments between the second denial and the hearing decision, if it goes against the Steeds.

"They want to know why the parents are upset," said another mother whose application for renewal was denied last year, Melissa McMann of Winder. "Your kid depends on this to stay alive."

Fighting back

State officials last year notified McMann and her husband, Chris, that their son J.C.'s disability, cystic fibrosis, was not severe enough to stay in the program, a ruling that astounds Melissa McMann still, even after her appeals got the decision reversed.

She appealed not just to the private company that makes eligibility decisions under contract to the state, but repeatedly called and e-mailed U.S. Sen Johnny Isakson, R-Ga., and other elected officials..

McMann's son relies on the Katie Beckett waiver to pay for such things as transportation to the doctor. McMann is visually impaired and can't drive J.C., and it would be too costly for the family if Chris McMann had to leave work as frequently as J.C. must go to doctors, she said.

Like many Katie Beckett waiver recipients, what the McMann family gets isn't a lot, about $8,000 last year, she said.

But they're far from rich, and that $8,000 means a lot, she said.

"It's critical for him," McMann said.

One of the effects of cystic fibrosis is that J.C. produces thick mucous, instead of the thinner substance most people's bodies produce in their lungs and stomach. It's a chronic infection, and can turn something that would be an annoyance for many children into a life-threatening condition.

"In his case, a cold turns into pneumonia, which lands us in the hospital," McMann said.

Before the family found out about the Katie Beckett waiver, they couldn't afford to pay for adequate treatment for their son, McMann said.

"We skimped on doctor visits. We took him only when he was sick," she said.

McMann has become a "reluctant activist" after her family's experience, not just because of the denial, but because of the annual time-consuming red-tape ordeal of reapplying and getting the same letters from doctors and compiling other documentation. This year, the family received a letter saying their renewal application would be due barely a month after their appeal was granted.

"The whole thing is insane. There's nothing that makes sense about any of it," McMann said. "The state wants to make it seem like these kids are not seriously ill. The state is sort of making it seem like it's not a big deal."

Off, then on again

Travis and Bette Kitchens of Athens have just gone through almost the same experience as the McManns: Denial, then reinstatement, for their son, Jack. The 6-year-old has a rare metabolic disorder called cystinosis, in which an amino acid called cystine accumulates in cells and can lead to kidney failure.

Jack has to take medicines at precise intervals seven times a day, and checkups can involve long airplane trips, since so few doctors know much about the rare disorder.

Like the other families, the Kitchens' own health insurance pays for most medical expenses, but even the small percent the insurance doesn't cover amounts to big money for the family, so the Katie Beckett waiver is important to them.

"It's the greatest thing for us and for a lot of families. Without it I don't know how we'd get by," said Travis Kitchens, a computer programmer at the University of Georgia's Georgia Center for Continuing Education.

Help is on the way for at least some of the families the state has kicked off the program, thanks perhaps in part to the activism of people like Moore - the advocate - and McMann.

The legislature kicked in $3.6 million to help this year, adding extra funding to take in families who'd been kicked off but not reinstated.

But some may have given up by now, Moore said.

"It certainly has been more of a bureaucratic nightmare than it should have been," said state Rep. Mickey Channell, D-Greensboro, one of the legislature's top experts on health care.

Cuts went too far

Channell, one of the principal authors of the PeachCare program that provides insurance coverage for children whose parents have no insurance, said state administrators went too far in tightening eligibility requirements for the Katie Beckett waiver.

"I don't mean it was overzealous enforcement of the rules," Channell said. "We just think in some ways the department was incorrect."

The state also has relaxed some of the eligibility requirements, though Moore says she's still worried the new rules will keep out children who need and deserve help from the program.

Keeping funding up for the program has been a struggle for the past several years, says Moore, whose family receives help from the Katie Beckett waiver because of her 6-year-old son's Down syndrome.

And though Moore believes Americans are coming to believe disabled people "should and can play a bigger part in our communities, and do have something to give," the struggles over funding are likely to continue in the future, she conceded.

"It all comes back down to money and numbers. It's a numbers game. I think they thought they'd be able to implement this and parents wouldn't fight back. But we did," she said.

The money question won't go away, Channell said.

"There are always more needs, I mean meritorious needs, than money to pay for them," especially as health care consumes more and more of the state budget, he said

"The health care budget has been steadily increasing, not only in real dollars but as a percent of the budget as well," he said. "To some degree, that's of necessity at the expense of certain other things. If one goes up, naturally something else goes down."