Senior Policy Analyst
An updated policy for how the federal government helps finance the costs of Medicaid services for American Indians and Alaska Natives will improve the delivery of care and save states money.
Medicaid plays a critical role in providing health care to American Indians and Alaska Natives; a quarter of adults and more than half of children have Medicaid coverage, according to the Kaiser Family Foundation.
American Indians and Alaska Natives can get health care either at Indian Health Service (IHS) or tribally run facilities (which are often on or near reservations). Yet there are gaps in the care that IHS or tribal facilities provide. Many of those facilities only provide primary care, and many American Indians and Alaska Natives don’t live near an IHS facility.
Medicaid coverage enables this population to get health services outside IHS or tribal facilities as well. But while the federal government covers 100 percent of the cost when Medicaid beneficiaries receive care at an IHS or tribal facility, it covers only 50 to 75 percent of the cost (depending on the state’s Medicaid matching rate) when they get care outside an IHS or tribal facility.
The policy update from the Department of Health and Human Services broadens the definition of services eligible for 100 percent federal financing by including those services provided outside an IHS or tribal facility when they’re provided at such a facility’s request.
Moreover, the 100 percent match for IHS and tribal services is permanent. Thus, for states, it’s an even better deal than the 100 percent federal match for health reform’s Medicaid expansion, which starts phasing down next year before reaching 90 percent by 2020. Also states providing Medicaid services in accordance with the updated policy can get a 100 percent federal match for a much greater share of Medicaid services for American Indians and Alaska Natives.
In South Dakota, with its large Native American population, the state savings from this updated policy will be so great that they would more than offset the state costs of expanding Medicaid over the next five years. That’s why Governor Dennis Daugaard is now contemplating calling a special legislative session to expand Medicaid. If the legislature approves, as many as 50,000 more people — a quarter of them American Indian — would gain Medicaid coverage, the state projects.
For all states with sizable American Indian and Alaska Native populations, the Medicaid expansion combined with the new payment policy can provide a huge boost.