Family income is known to be associated with children's health; the association may be particularly pronounced among lower-income children in the US, who tend to have more limited access to health resources than their higher-income peers. To investigate the association of family income with claims-based measures of morbidity and mortality among children and adolescents in lower-income families in the US enrolled in Medicaid or the Children's Health Insurance Program. This cross-sectional analysis included 795 000 participants aged 5 to 17 years enrolled in Medicaid (Medicaid Analytic eXtract claims, 2011-2012) living in families with income below 200% of the federal poverty threshold (American Community Survey, 2008-2013). Follow-up ended in December 2021. Family income relative to the federal poverty threshold. Record of International Classification of Diseases, Ninth Revision codes for an infection, mental health disorder, injury, asthma, anemia, or substance use disorder and death record within 10 years of observation (Social Security Administration death records through 2021). Among 795 000 individuals in the sample (all statistics weighted: mean [SD] income-to-poverty ratio, 90% [53%]; mean [SD] age, 10.6 [3.9] years; 56% aged 10 to 17 years), 33% had a diagnosed infection, 13% had a mental health disorder, 6% had an injury, 5% had asthma, 2% had anemia, 1% had a substance use disorder, and 0.6% died between 2011 and 2021, with the mean (SD) age at death of 19.8 (4.2) years. For those aged 5 to 9 years, higher family income was associated with lower adjusted prevalence of all outcomes, except mortality: children in families with an additional 100% income relative to the federal poverty threshold had 2.3 (95% CI, 1.8-2.9) percentage points fewer infections, 1.9 (95% CI, 1.5-2.2) percentage points fewer mental health diagnoses, 0.7 (95% CI, 0.5-0.8) percentage points fewer injuries, 0.3 (95% CI, 0.09-0.5) percentage points less asthma, 0.2 (95% CI, 0.08-0.3) percentage points less anemia, and 0.06 (95% CI, 0.03-0.09) percentage points fewer substance use disorder diagnoses. Except for injury and anemia, the associations were more pronounced among those aged 10 to 17 years than those 5 to 9 years (P for interaction <.05). For those aged 10 to 17 years, an additional 100% income relative to the federal poverty threshold was associated with a lower 10-year mortality rate by 0.18 (95% CI, 0.12-0.25) percentage points. Among children and adolescents in the US aged 5 to 17 years with family income under 200% of the federal poverty threshold who accessed health care through Medicaid or the Children's Health Insurance Program, higher family income was significantly associated with a lower prevalence of diagnosed infections, mental health disorders, injury, asthma, anemia, and substance use disorders and lower 10-year mortality. Further research is needed to understand whether these associations are causal.