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Catastrophe in DC: Proposed Medicaid Cuts Would Severely Harm Native Health

Medicaid is in profound jeopardy. As Sen. Lisa Murkowski states we could “see health outcomes that would start going backwards.”

Native American healthcare will seriously deteriorate if Republican-proposed cuts to Medicaid are made. “I don’t even want to think about [it] because you would see health outcomes that would start going backwards,” Sen. Lisa Murkowski, R-AK, told ICMN.

Medicaid is a federal- and state-funded program that provides healthcare for low-income children and families, pregnant women, elders and people with disabilities. President Lyndon B. Johnson implemented Medicaid in 1965 as part of the War on Poverty.

But now Medicaid is in profound jeopardy. On May 4, the House of Representatives passed the American Health Care Act (AHCA), which includes more than $800 billion in cuts to Medicaid.


Two weeks later, on May 20, President Donald Trump released his proposed budget for 2018, which includes an additional $610 billion in Medicaid cuts. The next move is up to the Senate, which is secretly working on its own legislation to “repeal and replace” the Affordable Care Act (ACA) of 2010, otherwise known as “Obamacare.”

Sen. Martin Heinrich, D-NM, told ICMN: “When I saw the numbers in the president’s budget I assumed they were related to the figures that were in the AHCA. But [the president’s cuts were] on top of the [legislation] that came out of the House. That $1.4 trillion impact to Medicaid clearly sends the message that Medicaid is something they don’t value and the improvements [in health] in tribal communities are something that they don’t value.”

American Indians and Alaska Natives have been significant beneficiaries of Medicaid expansion under the ACA. The federal government promised to pay the tab to cover newly eligible adults for three years in states that expanded Medicaid to all adults (not just parents of dependent children or pregnant women) ages 18 to 65 with incomes up to 133 percent of the federal poverty level. Beginning in 2014, the federal government paid for their coverage without the usual state contribution. By 2020, The federal share phases down to 90 percent of the cost of coverage for those adults. Thirty-two states opted to expand Medicaid.

What that has meant, explained Sen. Al Franken, D-MN, in an email to ICMN, is that “we’ve seen many Indian Health Service areas in states like Minnesota go from being able to provide what’s known as ‘life and limb only’ care to [providing] preventative and primary care services.”

Sen. Tom Udall, D-NM, told ICMN, “More than 132,000 tribal members are enrolled in Medicaid in New Mexico alone…. And thanks to the ACA tribal members can now choose to go to other hospitals when IHS wait times are too long or the medical service they need isn’t offered at their IHS facility.”

Alaska saw the number of uninsured tribal members drop from 30 percent to 23 percent between 2015 and 2016, according to Murkowski. “Medicaid expansion has allowed for more Alaska Natives to be covered and we have seen additional reimbursements to our programs, which are clearly providing health to Alaska Natives around the state.”

Reimbursements are key to understanding how Medicaid works. When a Medicaid recipient receives health care, the facility that provides that care receives payment from the government, in the same way that a facility that provides care to a person with private insurance, such as Blue Cross Blue Shield, is reimbursed by the insurance company. Under the proposed cuts, Medicaid spending would not go down in terms of actual dollars spent, because the costs of medical services and prescription drugs go up every year. But spending would not go up nearly as fast as it would under the ACA, so benefits would have to be lowered, or people would have to be dropped from the Medicaid rolls, or both.

These reimbursements are the lifeblood of the chronically underfunded Indian Health Service. According to an IHS spokesman, in fiscal year 2016, 677,811 of the 2.2 million individuals served by IHS had Medicaid coverage. In that year, the agency “collected over $659 million in reimbursements for services provided by IHS federal government facilities and programs to IHS patients who are also enrolled in Medicaid. This comprised over two-thirds of total third-party reimbursements to IHS that year.”

Udall said, “Current federal funding covers less than half of IHS operational costs. Fortunately the increases in revenue from the Medicaid expansion have offset those annual costs, but without that revenue necessary services may no longer be available.” During a May 17 hearing before the Senate Committee on Indian Affairs, IHS Acting Director Rear Admiral Chris Buchanan confirmed that rolling back Medicaid expansion would severely hamper IHS’s ability to provide services.

Medicaid expansion has also allowed IHS to send more people outside the system for care. “The Purchased/Referred Care program, or PRC, is integral to providing comprehensive health care services to American Indians and Alaska Natives. The general purpose of PRC is for IHS and tribal facilities to purchase services from private health care providers. For many years, PRC only covered medical priority I: emergent and urgent care. Today, there are service units in Albuquerque, Bemidji, Nashville, Oklahoma City, Phoenix and Portland IHS Areas that fund medical priorities higher than level I,” said an IHS spokesman.

The increase in Medicaid reimbursements, notes Udall, “has helped fulfill our federal government’s trust responsibility by helping to fill the [IHS] funding gap needed to provide health care to tribes.”

In addition to the cuts to Medicaid, other proposals in the AHCA and the president’s budget, such as capping the dollar amount of services that an individual could receive in Medicaid benefits, or making the program a block grant to states for them to administer with less federal oversight, could further cripple the program.

Sen. Jon Tester, D-MT., told ICMN, “When you start fooling around with Medicaid and block granting Medicaid or capping Medicaid or making it so that people who need health care don’t have access to Medicaid…it’s just bad news.” In Montana, said the senator, Medicaid expansion has given an additional 71,000 people access to healthcare; of those, 8,000 are Native Americans. “It has reduced the number of uninsured folks being treated by Indian Health Services facilities by 4,000 people since 2015,” said Tester.

Some senators are working hard to make sure low-income people continue to have healthcare. “Our charge right now is to make sure that these huge cuts don’t take place,” said Heinrich. “You just simply can’t take $830 billion out of Medicaid and not see tribal members directly impacted. We’re going to do everything we can to make sure that people understand if they vote for this legislation [the AHCA] the way it came out of the House of Representatives that it will directly impact both tribal communities and urban Indians all across this country in a very negative way.”

Healthcare coverage is a life and death issue for millions of people in this country. Sen. Heidi Heitkamp, D-ND, explained in an email to ICMN: “The Republican health care bill would rip apart Medicaid, which has allowed IHS and tribal facilities to expand care beyond ‘life and limb’ services to IHS patients for the first time – and without [those services] the result will be loss of life. It also forgets our nation’s promises to Native communities, risking access to the care families need and greatly reducing the successful momentum of Native hospitals – including at Turtle Mountain in North Dakota – to offer expanded services. That’s downright shameful.”

The Congressional Budget Office has estimated that under the AHCA, “in 2026, an estimated 51 million people under age 65 would be uninsured, compared with 28 million who would lack insurance that year under current law [the ACA],” whether that means not being eligible for Medicaid, or not having access to federally-subsidized health insurance. This number does not take into account the impact of the president’s proposed cuts to Medicaid.

A working group of 13 Republican senators has been charged with writing the Senate version of repeal and replace. Only five represent Medicaid expansion states. The group is working in secret. Tester, a Democrat, says he does not know what the working group is thinking. “There’s no doubt and they’re working on a healthcare bill in the Senate right now and there’s no doubt when it gets done and I have not been allowed in to see what they’re working on, but the truth is, once it gets out I don’t think it’s going to be anything that meets the needs of the American Indian or the American people,” he said.


Not even Murkowski, a Republican senator, knows what they are thinking. “I do not know what the language will look like, what direction it will take when it comes to Medicaid,” she said. Murkowski, however, says she is part of a group of senators from Medicaid expansion states who “have been out working for months now trying to better understand the impacts of the House-passed bill trying to propose some solutions that we think can be constructive.”

Udall says he is “fighting hard against the Republican effort to repeal the Affordable Care Act. This terrible bill has passed the House, but I’m still hopeful that we can defeat it in the Senate and I won’t stop fighting until we scrap it once and for all.”

But it’s going to take more than 100 senators to create a just and equitable healthcare system in this country. “We need to continue to make sure our voices are heard whether it’s me in the United States Senate or whether it’s folks on the ground talking about the real impacts of health care because this is real stuff. This is a big part of our economy. Healthcare is a big part of our family lives,” says Tester. “We’ve got to be proactive. We’ve got to make sure our voices are heard and we need to make sure that people in Washington, D.C., understand that any decision here has real people impacts in Indian country.”

Some of 13 senators working on the Senate healthcare bill are from states with significant numbers of AIAN constituents, but neither Sen. John Thune, R-SD nor Sen. John Barrasso, R-WY, had responded to requests for comment by press time.