A House budget proposal backed by Republicans would cut Medicaid spending by at least 25 percent by shifting costs to states through block grants, a move educators fear would cause them to fall out of compliance with Individuals with Disabilities Education Act (IDEA).
While actual legislation has yet to be filed, the Congressional Budget Office estimates that Medicaid spending would be reduced by $1 trillion over the next decade, which is equivalent to one-third of the program’s annual budget in 2026 dollars.
Block grants—a federally allocated sum of money states can use a range of services—would effectively reduce the amount of dedicated reimbursement funds available to schools to help pay for their special education programs and services.
If enacted, this would further gaps opening between state, local and federal IDEA funds to offset those costs.
According to the American Association of School Administrators, which published a report in January, districts would be forced to compete with hospitals, doctors, urgent care clinics, and health care centers to ensure continued reimbursement of services.
The only recourse for many districts would be to turn to taxpayers to fund services through additional taxes or levies.
The AASA surveyed 1,000 school administrators in 42 states, a majority of respondents reporting that they expect special education programs to be “negatively impacted” if the cuts proceed. Additionally, the association found that Medicaid cuts would “drastically” reduce funds for individualized supports, such as services for children with “significant cognitive and motor delays.” These services often include transportation from home to school, as well as therapy and health services.
“Specifically, there are concerns about the ability of school districts to maintain special education program quality and meet federal mandates,” said author Sasha Pudelski, AASA’s assistant director of policy and advocacy, in the report.
She added that IDEA is already “woefully underfunded,” as school districts only receive approximately 16 percent of the additional cost to educate a student with a disability, despite congressional promises to fund 40 percent of the necessary funds. Or, as she said in the report, “Lawmakers have never come close to meeting that promise, which means the bulk of funding to cover the federal shortfall for special education comes from state and local levels.”
Further, Pudelski pointed out that cuts to Medicaid would negatively impact the overall school environment because federal funding allows school districts to not infringe on general education programs to fund their legal requirements to prioritize special education.
The report also claims that low-income students with disabilities—as well as homeless and English language learners—would be hard hit, with many students losing vital health care services, including dental, vision, hearing immunization and mental health supports.
Currently, Medicaid’s Early Periodic Screening Diagnosis and Treatment benefits ensures over 35 million children or youth under age receive array of health-care screening, diagnosis and treatment services that can be required under a student’s Individualized Education Program (IEP).
Respondents also said they are “deeply worried” about how cuts to EPSDT benefits would only impact special-education programs, but the specific personnel, as well.
Not only do Medicaid reimbursements help pay for students’ therapists, nurses and other experts who provide services under IDEA, nearly 70 percent of AASA members said cuts could result in school personnel being furloughed or laid off, since several of these positions are paid for in part or entirely with Medicaid funds.
“Our Medicaid funding is used to help pay the salary of skilled therapists needed to fulfill the IEP requirements of our school-age children,” one superintendent said. “We live in a very rural area with a shortage of skilled, qualified therapists. To meet the needs of our students, we supplement their rates with our Medicaid money.”
Moreover, any cuts would hamper local school district efforts to inform families of their Medicaid eligibility. It also might affect the "ethical obligation" by respondents to ensure all students in the school system receive the medical care they need, regardless of their parents' ability to pay.
AASA holds its annual National Conference on Education this week in New Orleans.