Health Care Safety Net Especially Important for Native Americans

States Play Critical Role in Supporting Native American Health

Most of the nearly 2.4 million Native Americans (American Indians and Alaskan Natives) in the U.S. receive health care through the Indian Health Service (IHS). But, because of high poverty rates among tribes and the underfunded nature of IHS, Medicaid is an important safety net for Native Americans.

In 1996, Medicaid covered nearly 40 percent of the Native American population. Although IHS is responsible for picking up much of the other 60 percent, it is seriously underfunded by the federal government.

The current funding level for IHS is 40 percent (or $1.2 billion) less than comparable health care funding for the general America population. The California Rural Indian Health Board, Inc. — one of the thirteen learning laboratories of W. K. Kellogg’s national Community Voices initiative — is part of a workgroup studying the Level of Need Funded for IHS.

States can play an important role in promoting the safety net features of the Indian Health Service and Medicaid. These safety nets are especially important for Native Americans because they experience a disproportionately poorer health status than other Americans.

The Center on Budget and Policy Priorities recommends the following practices:

• States can benefit from federal reimbursements by encouraging Native Americans to use IHS providers. The federal government provides a 100 percent match to IHS facilities or tribes for the cost of Medicaid services. If Native Americans receive Medicaid services from non-IHS or non-tribal providers, the state has to provide its Medicaid match.

• States should ensure that Medicaid fee-for-service payments to IHS adequately cover the costs of care.

• States should ensure that payment rates to managed care organizations (MCOs) are adequate and payments by MCOs to subcontractors are adequate and timely.

• States also need to support a level of federal funding for IHS that is: (1) based on sound actuarial approaches that are comparable to those used by Medicaid and private insurance; and, (2) equitable to levels of health care funding for the general American population.