Education

School Districts Worry About GOP's Proposed Medicaid Changes

May 16, 2017

For school districts still getting their financial footing after the Great Recession, the Medicaid changes being advanced as part of the health care overhaul are sounding familiar alarms.

Administrators say programming and services even beyond those that receive funding from the state-federal health care program could be at risk should Congress follow through with plans to change the way Medicaid is distributed. They say any reduction in the estimated $4 billion schools receive in annual Medicaid reimbursements would be hard to absorb after years of reduced state funding and a weakened tax base.

"If they have less Medicaid money, something's going to go away," said Randy Liepa, superintendent of the Wayne County Regional Education Service Agency, which works with 33 school districts in the Detroit area. The agency covers about 21,000 children with special needs who are on Medicaid and it helps districts recoup about $30 million annually in reimbursements.

Districts would have to look at non-mandated positions and programs if forced to bear more of the costs for services for poor and disabled students required by federal law, said Thomas Gentzel, executive director of the National School Boards Association.

The Senate is up next in efforts to do away with President Barack Obama's health law, and school leaders are watching to see whether the changes advanced by the House survive. The House bill would transform the open-ended federal entitlement, which reimburses schools a percentage of the cost of the eligible services they provide to poor and disabled students, to one where reimbursements will come in a fixed, per-person amount.

But, said Kriner Cash, superintendent of public schools in Buffalo, New York, "individual student care comes with highly variable costs, especially in the case of students with disabilities." In the school district, more than 80 percent of students are low income and 22 percent have disabilities. The district gets about $2.5 million annually from Medicaid.

In March, a Congressional Budget Office estimate for an earlier version of the House bill found that federal Medicaid subsidies to states would be $880 billion less over 10 years.

President Donald Trump's administration argues that states will get more freedom to experiment with the program and make sure that people who rely on Medicaid get the care and coverage they need.

Medicaid spending is "not getting out of control because of schools, because schools are getting less than 1 percent of the dollars," said Sasha Pudelski, assistant director of policy and advocacy at The School Superintendents Association. "It's not kids who are breaking the bank."

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