Can low-income parents open educational saving accounts without jeopardizing state aid?

Finanically my sister's family in Missouri is considered low-income, which qualifies her 3 young kids for state-fund health coverage. She would like to open educational saving accounts for the kids and can afford to put in $100/kid/month, plus cash gift from relatives. My question is will her kids' health coverage be jeopardized if the state is aware that she has saving accounts and disqualify her low-income status? Are children's educational saving accounts added to parents' total income tax or are they separate? Also, would it be possible for me (CA resident) to open up these accounts? What are the current tax-free educational saving plans offered by the Fed and Missouri state?

Public Comments

Any money saved will be considered in federal financial aid. Education plans are a better place to put money overall. Money in retirement accounts are not currently considered. Accounts should be opened in the parents' name as a custodial account. Check her state's 529 plan for details.
check your 529 plan in your state.