Tribal Health Leaders Warn That Medicaid Cuts Could Devastate Native American Programs

As Congress considers substantial reductions to federal Medicaid funding, health centers serving Native American populations, like the Oneida Community Health Center situated near Green Bay, Wisconsin, are preparing for a disaster.

This is significant as over 40% of the approximately 15,000 patients the center caters to rely on Medicaid. Cuts to this program would severely harm both the patients and the facility, according to Debra Danforth, director of the Oneida Comprehensive Health Division and a member of the Oneida Nation.

“It would be a tremendous hit,” she stated.

The center offers a variety of services to most of the Oneida Nation’s 17,000 residents, including ambulatory care, internal medicine, family practice, and obstetrics. Danforth noted that the tribe is one of two in Wisconsin that maintain an “open-door policy,” allowing members of any federally recognized tribe to access their services.

However, Danforth and numerous other tribal health leaders express that Medicaid cuts would lead to a reduction in services at health facilities that cater to Native Americans.

Indian Country has a distinctive relationship with Medicaid, as the program assists tribes in addressing chronic funding shortfalls from the Indian Health Service (IHS), the federal agency accountable for delivering healthcare to Native Americans.

Medicaid has provided around two-thirds of the third-party revenue for tribal health providers, establishing financial stability and assisting facilities in covering operational expenses. More than a million Native Americans enrolled in Medicaid or the closely-related Children’s Health Insurance Program depend on this insurance to access care outside tribal health facilities without incurring significant medical debt. Tribal leaders are urging Congress to exempt tribes from funding cuts and are gearing up to fight for their continued access.

“Medicaid is a key way the federal government fulfills its trust and treaty obligations to provide us with healthcare,” remarked Liz Malerba, director of policy and legislative affairs for the United South and Eastern Tribes Sovereignty Protection Fund, a nonprofit advocating for 33 tribes from Texas to Maine. Malerba is a member of the Mohegan Tribe.

“Any disruption or cut to Medicaid is seen as an abandonment of that responsibility,” she added.

Tribes face a daunting challenge in delivering care to a population plagued by severe health disparities, a high prevalence of chronic illness, and, especially in western states, a life expectancy of just 64 years—the lowest of any demographic group in the U.S. Nevertheless, in recent years, some tribes have enhanced access to care by expanding health services and hiring more providers, partially funded by Medicaid reimbursements.

Over the past two fiscal years, five urban Indian organizations in Montana have experienced funding increases of nearly $3 million, shared Lisa James, director of development for the Montana Consortium for Urban Indian Health, during a webinar in February hosted by the Georgetown University Center for Children and Families and the National Council of Urban Indian Health.

This increase in revenue was “instrumental,” James noted, enabling clinics in the state to offer services previously unavailable without referrals, including behavioral health services. Clinics were also able to enhance operating hours and staffing levels.

The five urban Indian clinics in Montana—located in Missoula, Helena, Butte, Great Falls, and Billings—serve 30,000 individuals, including non-Native patients. The clinics offer a comprehensive range of services, including primary care, dental care, disease prevention, health education, and substance use prevention.

James emphasized that cuts to Medicaid would necessitate reductions in services at Montana’s urban Indian health organizations, thereby hampering their ability to tackle health disparities.

American Indian and Alaska Native individuals under 65 are more prone to being uninsured compared to their White counterparts, but 30% depend on Medicaid versus 15% of Whites, as per KFF data from 2017 to 2021. Over 40% of American Indian and Alaska Native children are enrolled in Medicaid or CHIP, which provides health coverage to children whose families do not qualify for Medicaid. KFF is a nonprofit dedicated to health information, which includes KFF Health News.

A report by the Georgetown Center for Children and Families from January revealed that the percentage of residents enrolled in Medicaid was notably higher in counties with a significant Native American population. The enrollment in small towns or rural counties predominantly within tribal statistical areas, reservations, and other Native-designated lands was 28.7%, compared to 22.7% in other small towns or rural counties. Approximately 50% of children in these Native regions were enrolled in Medicaid.

The federal government has previously exempted tribes from certain executive orders established by President Trump. In late February, acting general counsel of the Department of Health and Human Services Sean Keveney clarified that tribal health programs would remain unaffected by an executive order mandating the termination of diversity, equity, and inclusion government programs, although the Indian Health Service is expected to halt diversity hiring initiatives set under an Obama-era rule.

HHS Secretary Robert F. Kennedy Jr. also rescinded layoff notices for over 900 IHS employees mere hours after they were issued. During his Senate confirmation hearings, he mentioned his intent to appoint a Native American as an assistant HHS secretary. The National Indian Health Board, a nonprofit advocating for tribes based in Washington, D.C., supported the elevation of the IHS director to the assistant secretary position at HHS last December.

Jessica Schubel, a senior healthcare official in former President Joe Biden’s White House, stated that exemptions alone won’t suffice.

“Being exempt does not mean that Native Americans won’t feel the repercussions of cuts made to the rest of the program,” she noted.

State leaders are also advocating for federal Medicaid spending to be preserved, as reductions in the program would shift costs onto their budgets. In the absence of continuous federal funding, which can cover over 70% of costs, state lawmakers may face tough choices regarding eligibility requirements that could reduce Medicaid rolls and potentially leave some Native Americans without health coverage.

Tribal leaders emphasized that state governments do not bear the same obligations to them as the federal government, yet they encounter significant variation in how they engage with Medicaid depending on their state’s policies.

Mr. Trump has issued seemingly contradictory statements regarding Medicaid cuts, asserting in a February interview on Fox News that Medicaid and Medicare would remain untouched. However, in a social media post during the same week, he expressed strong support for a House budget resolution that would likely necessitate Medicaid cuts.

The budget proposal approved by the House in late February mandates lawmakers to reduce spending to accommodate tax breaks. The House Committee on Energy and Commerce, responsible for overseeing Medicaid and Medicare expenditures, has been instructed to cut $880 billion over the next decade. The potential cuts to the program, which, alongside CHIP, provides insurance to 79 million individuals, have spurred opposition from both national and state organizations.

The federal government reimburses IHS and tribal health facilities 100% of billed costs for American Indian and Alaska Native patients, thereby shielding state budgets from these expenses.

Because Medicaid serves as a crucial backup for Native American health programs, tribal leaders emphasize that it will not be about simply replacing lost funds, but rather learning to operate with diminished resources.

“When Medicaid funding constitutes between 30% to 60% of a facility’s budget, it creates a substantial gap that is challenging to fill,” stated Winn Davis, congressional relations director for the National Indian Health Board.

Congress is not mandated to consult tribes during the budgeting process, Davis pointed out. Only after the Centers for Medicare & Medicaid Services and state agencies implement changes can tribes engage with them concerning execution.

The federal expenditure on the Native American health system is a considerably smaller fraction of its overall budget compared to Medicaid. The IHS anticipates billing Medicaid approximately $1.3 billion this fiscal year, accounting for less than half of 1% of the total federal Medicaid spending.

“We are saving more lives,” Malerba stated regarding the additional services covered by Medicaid in tribal healthcare. “It brings us closer to the level of 21st-century care that we should all have access to but do not always receive.”

KFF Health News is a national newsroom dedicated to producing in-depth coverage of health issues and is one of the core programs at KFF, an independent source for health policy research, polling, and journalism.