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The ’Ripple Effect’ of Medicaid Cuts on Student Transportation

I wrote last month that the Volkswagen Mitigation Trust Fund could prove to be the second coming of the American Recovery and Reinvestment Act in terms of new school bus purchase and repowers.

But if doomsday scenarios play out in terms of proposed federal cuts to entitlements, take Medicaid as an example, and with many convinced that the Individuals with Disabilities Act is in the crosshairs of the new administration, how many fewer student riders might there eventually be for all these new buses? It’s a question that begs exploration.

As for Medicaid, certainly the program can and should be improved on. Case in point, the U.S. Department of Health and Human Services (DHHS) discovered in November that $26 million in federal funds that were claimed on behalf of dead people in Florida. Certainly, similar cases of mismanagement or downright fraud exist nationwide.

But are state block grants, as proposed by House Republicans, the answer for our most vulnerable children, not to mention the estimated 10 million people on Medicaid who got health insurance under the Affordable Care Act?

Tom Miller, a resident fellow at the conservative American Enterprise Institute, told Kaiser Health News in January that block granting could “be great or a disaster,” depending on how it’s implemented. “The ideal model from the view of states is, ‘Give us the money, and I’ll let you know what I did.’ That’s not going to work,” he said.

AASA, or the American Association of School Administrators (aka the Superintendent Association), published a survey in January that dives into how the proposed $1 trillion in cuts over the next decade to Medicaid could affect students with disabilities and, as an extension, their services. These include transportation.

Under IDEA, if a student’s Individualized Education Program (IEP) or Individual Family Service Plan (IFSP) calls for a certain type of medical service during the school day, then the district, school or agency must provide and ensure the student has transportation. And this can cost a lot of money and resources.

For some school districts, the paperwork necessary to apply for Medicaid reimbursements simply proves too burdensome to be worth the time, or they aren’t aware or confidant that the funds are a regular source of money. But for those that heavily rely upon Medicaid funding, AASA said state block grants would slash reimbursements, crippling special education programs and related services.

AASA members argue that the new reality could be school districts competing with hospitals, HMOs, urgent care clinics and other community health providers for their share of the federal funding. The only recourse for some local municipalities would be turning to voters to approve new taxes or levies.

The Medicaid School Health Services program in Colorado returns about $32 million in reimbursement to schools for over 1.8 million individual health services provided last school year alone, said Kim Erickson, executive director of The Consortium, a nonprofit that assists Colorado school districts with expanding health services for all students through Medicaid reimbursements. Transportation represented a relative small piece of the pie during the 2014-2015 school year, but “when you pull a couple of million out of a district, everybody is going to pay. It’s a ripple effect,” Erickson explained.

She pointed out that Colorado school districts must put Medicaid funds back into its student health plans, meaning the money could go toward purchasing wheelchair lifts or training for bus drivers and attendants. Similarly, AASA’s survey uncovered concern that Medicaid cuts could result in staff members being furloughed or terminated.

Think for a moment: Does your district utilize Medicaid reimbursements to pay for physical therapists? School nurses? Partial school bus driver and attendant salaries? Special needs routers? Wheelchair buses? Car seats?

Have you used Medicaid to fully staff entire positions? This industry already has seen a drastic reduction in the number of students transported over the past decade due to budget cuts and service elimination. One constant has been the transportation of students with IEPs, even though special educations programs have always lacked full funding, which has made programs like Medicaid all the more important.

Now is the time student transporters should step up and make their voices heard or be prepared to live with the consequences later. Whatever those may be.

Editor’s Note: This article was reprinted from the March 2017 issue of School Transportation News magazine.

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