Medicaid steps up in schools where federal disability funds fall short

Kaiser Health News warns against reducing the Medicaid funds that provide education-based services.

Medicaid contributes $4 billion to school-based programs nationwide. New Hampshire receives over $29 million from the provider to cover education-related services such as speech, language and occupational therapies, mental health services, and other assistance needed by students to be successful in school. 

But as the federal government proposes cuts to the Medicaid program, Kaiser Health News warned against reducing the program that has stepped in where federal funds have come short:

Medicaid, created in 1965 to provide health insurance to the poor, now functions as a lifeline for millions of American students, as well as hundreds of school districts across the country like Oakland Unified. The public insurance program has evolved so that it now finances myriad education-related services, including transportation for kids with disabilities, school clinics and counseling for children from turbulent backgrounds. Medicaid funds are now woven into the nation’s educational system.

But as Congress seeks to cut federal health spending, the use of Medicaid dollars in schools could come under new scrutiny. Critics question whether schools are the best entities to provide all the services they now do, and if the educational system has become too reliant on the health program. Educators and advocates counter that schools are the opportune place to address health-related issues and that federal law requires them to provide such benefits. And, they say, if Medicaid doesn’t pay, who will?

Medicaid spends only $4 billion of its $400 billion annual budget in schools — a “very small portion of the pie,” said Jessica Schubel, a senior policy analyst at the bipartisan Center on Budget and Policy Priorities. But for the school districts providing an array of services that have quietly become vital to students and families, losing this funding source would be immense, she said, “a big deal…”

In 2017, a survey by the School Superintendents Association found that 68 percent of superintendents said Medicaid dollars funded school nurses, counselors and other health staff members. More than half of superintendents said they have worked to expand the number of students enrolled in Medicaid, which can increase revenue to the school districts. The funds also enable districts to pay staff salaries like Roberts’, buy medical equipment and generally bolster their education budgets, Schubel said…

The increasing reliance by schools on Medicaid in many states is in some ways a byproduct of federal mandates to broaden educational services and a lack of specific funds to pay for them.

In 1975, Congress passed the Individuals with Disabilities Education Act (IDEA), which gave students with disabilities the right to a free education adapted to their needs. The law stipulates that Congress can pay up to 40 percent of the average cost per student for every child receiving special education. However, payments have never met that threshold.

Medicaid helps bridge the gap.

Among the students served by Medicaid in the classroom is Michael Walt, a 10-year-old with Williams syndrome, a genetic abnormality that causes heart problems and severe developmental delays. His school, Forestdale Elementary in Springfield, Va., provides a team of speech and occupational therapists to improve Michael’s physical and intellectual abilities.

Medicaid contributes $1.5 million a year on average to help pay for health services and therapy, said Fairfax County Public Schools spokesman John Torre. Their schools bill Medicaid for services including physical and occupational therapy, psychological counseling and speech-language assistance. It also pays for specialized transportation for students with disabilities, which Michael uses nearly every morning.

His mother, Lara Walt, an attorney, said services offered at school have improved Michael’s speech, gait and motor skills. He can now eat oatmeal with a spoon. Though her son may never live independently, she said, without Medicaid funds supporting special-education services, “he’d be in a much worse space.”

Medicaid-funded Services in New Hampshire’s Schools

New Hampshire received over $29 million in 2016 in Medicaid funding for school-based services, according to the Department of Health and Human Services. Every district in the state receives funds. In 2016, Nashua received over $2.2 million in Medicaid funds, Dover received about $675,000.

Cuts in Medicaid funding will put school districts and towns in a tough spot. Special education services provided through IEPs are mandated by federal and state law, meaning that less federal funding will require towns to either raise local taxes to pay for them or cut student services:

“Losing the Medicaid funding impacts the efforts of schools to continue to improve students’ success,” Kimberly Saunders, superintendent of the Peterborough-based ConVal Regional School District, said. “It takes away resources from all students.”

Richard Matte, director of student services at N.H. School Administrative Unit 29, which serves schools in Keene and six other towns, said the cuts would hit local taxpayers and strain the schools’ ability to provide for disabled students.

“Cutting this funding would have a substantial impact on our local communities,” Matte said.

Source: How Medicaid Became A Go-To Funder For Schools | Kaiser Health News