AHCA/BCRA Per Capita Fact Sheet

Summary

American Indian/Alaska Native (AI/AN) people are disproportionately reliant on Medicaid.  The House-passed American Health Care Act (AHCA) and the Better Care Reconciliation Act (BCRA) being considered by the Senate would impose per capita caps on federal Medicaid payments to states, which will likely result in significant program cuts.  However, both AHCA and BCRA would exempt Indian Health Service (IHS) and Tribal health care facilities from those caps—but not urban Indian health providers (UIHPs). 

The federal government’s Trust Responsibility to provide health care to AI/AN people includes those urban Indians who live off of reservations, many of whom are served by UIHPs.  “Urban Indian” is a term which refers to the more than 70% of the nation’s AI/AN people who don’t live on reservations, often because of the federal government’s forced relocation policy or in search of economic opportunities.  UIHPs were created by Congress at the urging of Tribes to ensure that their urban Indian members could receive high-quality, culturally-competent health care even when they are off of reservations. Congress stated that the trust responsibility does not end at the borders of the reservation.

The lawmakers who drafted AHCA and BCRA understood that the imposition of caps on Medicaid would be inconsistent with the federal government’s Trust Responsibility, which is why they exempted IHS and Tribal facilities.  If federal Medicaid payments to states are to be capped, NCUIH urges the Senate to ensure that UIHPs are also exempted; the Senate should also ensure that UIHPs receive the same level of federal Medicaid support as IHS and Tribal facilities.

Importance of Medicaid to AI/AN people

 Medicaid, the federal government’s program to provide health care to low-income Americans, is of particular importance to AI/AN people.  At least one-fifth of the more than five million AI/AN people in the United States are enrolled in Medicaid.  The Medicaid health care services provided to AI/AN people by IHS, Tribal organizations, and UIHPs are ultimately paid for entirely or substantially by the federal government with the rest paid by states. 

Pursuant to treaty obligations, it is ultimately the federal government which has a Trust Responsibility to provide health care free of charge to AI/AN people.  However, the chronically-underfunded IHS must severely ration the care it provides.  Therefore, enrollment of AI/AN people in Medicaid helps to relieve the financial burden on IHS and promotes compliance with the Trust Responsibility. 

AHCA and BCRA would impose per capita caps on Medicaid

 AHCA  would make several significant changes to Medicaid which, according to the Congressional Budget Office’s (CBO),  could reduce the federal contribution to the program by $880 billion over ten years.  CBO reports that BCRA would cut federal funding to Medicaid by $772 billion over the same period, with much steeper cuts in the following years.  Currently, states pay providers for Medicaid services, and the federal government reimburses states for a percentage of their expenditures; and if costs to states increase because there are more enrollees or enrollees become more expensive, additional federal payments are automatically generated. 

One way AHCA and BCRA would cut federal spending on the program is to impose a per capita cap on Medicaid payments to the states,  based on calculations of the average per-enrollee cost of medical services.  It is widely believed that states would be unable or unwilling to offset the reductions in federal contributions, which would likely cause states to reduce benefits, narrow eligibility, and cut payments to providers. 

AHCA and BCRA would exempt IHS and Tribal facilities from per capita caps, but not UIHPs

Understanding that such an arrangement would be inconsistent with the federal government’s Trust Responsibility, AHCA Section 121 and BCRA Section 133 would exempt from the per capita caps Medicaid services provided by IHS and Tribal facilities, but not UIHPs.  The language does not specifically exclude UIHPs.  Rather, it incorporates by reference an earlier law that requires the federal government to pay states 100% of the cost of Medicaid services provided by IHS and Tribal facilities.  The Federal Medical Assistance Percentage (FMAP) is 100% for IHS and Tribal facilities, which reflects that the Trust Responsibility is assumed by the federal government, rather than the states, because it has treaty obligations to AI/AN people.  However, UIHPs are not explicitly listed in that earlier law; consequently, federal reimbursement to the states for the services provided by UIHPs is much less, usually from 50-60%. 

UIHPS already receive inferior federal Medicaid payments compared to IHS and Tribal facilities

Congress has long recognized that the federal government’s Trust Responsibility to provide health care for urban Indians follows them off of reservations:

“The responsibility for the provision of health care, arising from treaties and laws that recognize this responsibility as an exchange for the cession of millions of acres of Indian land does not end at the borders of an Indian reservation. Rather, government relocation policies which designated certain urban areas as relocation centers for Indians, have in many instances forced Indian people who did not [want] to leave their reservations to relocate in urban areas, and the responsibility for the provision of health care services follows them there.”

However, the failure to provide UIHPs, which consume little more than 1% of the IHS budget, with 100% FMAP punishes providers that already lack access to many resources and limits the services they can provide. 

The Center for Medicare and Medicaid Services and IHS have been unable to correct this inequity administratively.  NCUIH continues to work with House and Senate lawmakers in order to correct the law so that the federal government would provide UIHPs with the same level of Medicaid support it already provides to IHS and Tribes.  

IHS, which has supported 100% FMAP for UIHPs, reports that the annual cost of such a change would be merely $2.3 million per annum. 

UIHPs would be further disadvantaged if their already inferior Medicaid payments are capped by AHCA and BCRA. 

UIHPs are successful public-private partnerships which manage to provide high-quality, culturally-competent health care, largely by generating their own revenues, rather than relying on federal appropriations. 

It is bad policy and inconsistent with the Trust Responsibility to provide UIHPs with markedly inferior federal Medicaid support, especially given the program’s importance to the Indian Country. Congress must act swiftly to remedy this problem and continue to fulfill their trust obligations.