Student Well-Being

Districts, Advocates Warily Await Health-Care Law Overhaul

By Alyson Klein — February 28, 2017 7 min read
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Few people may associate the Patient Protection and Affordable Care Act—sometimes derided as “Obamacare"—with school districts and school-age children.

But scrapping the ACA or revamping it significantly, a long-standing Republican priority, could have serious implications for everything from student mental-health services to the hiring of substitute teachers.

At this point, it’s unclear just how Republicans, who control both chambers of Congress and the White House for the first time in more than a decade, will proceed. President Donald Trump campaigned on getting rid of the ACA, but has also said he’d like to keep some of its most popular parts, including allowing young adults to remain on their parents’ insurance. He vowed earlier this year to work toward the goal of “insurance for everybody.”

Since the 2016 election, GOP leaders in both chambers have been wrestling with ideas for changing, repealing, and replacing the law, which was enacted in March 2010.

But the path forward remains cloudy. The law is a delicate compromise, said Genevieve Kenney, a co-director of the Health Policy Center at the Urban Institute. “You can’t get things to work unless you’re mindful of the underlying dynamics of the [health insurance] market,” she said.

For now, school district officials and children’s health advocates are keeping an eye on a myriad of moving parts within the sprawling law, from marquee pieces like its expansion of Medicaid—a federal and state-funded insurance program for low-income families—to down-in-the-weeds details, including grants to entice budding mental-health professionals to intern at needy schools.

The ACA was generally geared toward adults without health-care coverage, but it also appears to have helped more children gain access to health care. Those gains could be in jeopardy if the law is repealed and not replaced, some advocates say.

The Urban Institute, a nonprofit social and economic research organization in Washington, estimates that 4.4 million children could lose health insurance if the law is struck down, even partially, without an alternative.

Health-Care Law's Overhaul

President Donald Trump and congressional Republicans have promised to repeal—or at least make big changes to—the Affordable Care Act, President Barack Obama’s signature domestic achievement. School district officials and child-health advocates are watching to see how changes to the law shake out, including in several key areas.


Between 2013 and 2015, as ACA implementation was cranking into gear, the uninsured rate for children dropped from 7.1 percent to 4.8 percent, said Tricia Brooks, a senior fellow at the Center for Children and Families at Georgetown University. That’s partly because some children receive coverage along with their parents through ACA’s health insurance marketplace.

But the law also helped most states expand Medicaid, which covers some 33 million children, according to a 2015 analysis by the Henry J. Kaiser Family Foundation.

What’s more, enrollment in both Medicaid and the State Children’s Health Insurance Program, or S-CHIP, ticked up when parents started signing up for the ACA’s insurance exchanges, thanks in part to increased outreach efforts spurred by the new law—something Medicaid experts call the “welcome mat” effect.

“I really do think if eligibility is rolled back, or we make the system more complex [and make it] harder to enroll … there could be a reduction in coverage to kids,” Kenney said.

Medicaid Makeover

As part of their efforts to repeal or rework the ACA, Republican leaders in the U.S. House of Representatives are contemplating broader changes to Medicaid.

Those include limiting federal funding for Medicaid through set block grants or per capita amounts based on how many people a state has from a particular eligibility group, such as children or individuals with disabilities. Currently, federal funding is available to match state expenditures, which may shrink or increase as the health care needs of the state change, Brooks explained.

Allowing Medicaid dollars to flow as block grants to states would “really cut out the fraud, waste, and abuse” in the program, Kellyanne Conway, a White House senior adviser, said on the “Today Show” earlier this year.

But advocates fear such changes could eventually lead to diminished financing for Medicaid, said Bruce Lesley, the president of First Focus, a nonprofit organization that aims to make children and families a priority in budget decisions.

And that in turn might have serious ramifications for school districts, according to AASA, the School Superintendents Association. Schools receive roughly $4 billion from Medicaid a year, or more than a quarter of the amount of funding districts get under the federal Title I program for disadvantaged children.

Those dollars reimburse schools for covering the cost of services to students in special education who are eligible for Medicaid, including speech therapy and occupational therapy.

“Schools are an ideal place to offer health care services because they are where children are almost every single day,” said Sasha Pudelski, the assistant director of policy and advocacy at the AASA.

In fact, the AASA, along with the Association of School Business Officials International and the Association of Educational Service Agencies, surveyed almost 1,000 educators in 42 states, in part to find out how they are currently employing Medicaid dollars.

Two-thirds of the respondents said they use Medicaid to help cover salaries for professionals who work with students in special education, for example. And a quarter of respondents said they use Medicaid money to finance equipment for students in special education, including walkers and wheelchairs.

The ACA also required all health plans to have a certain set of “essential health benefits,” including pediatric care and mental and behavioral health, said Kelly Vaillancourt Strobach, the director of government relations for the National Association of School Psychologists.

If that provision is repealed—or reshaped significantly—students who are covered either through their parents’ insurance or through the ACA could lose access to a psychologist or psychiatrist, she said. That means that conditions that can impact a child’s ability to learn, such as Attention Deficit Hyperactivity Disorder or depression, may not be addressed appropriately.

“That’s one of the biggest things we’re afraid of,” Strobach said. Schools will do what they can to make up for the loss, she said, including utilizing school-based or community health services But, she said, some school-based professionals may not provide all of the services some children need, such as psychiatric care. And many community health-service agencies are already strained, with long waiting lists.

And there are some smaller provisions of the law that can help schools beef up mental health services for students. For instance, ACA provides grants to finance internship stipends for health professionals—including school psychologists and social workers—who want to train in high-needs schools, Strobach said.

Teachers’ unions are also keeping a close eye on a provision of the law that isn’t slated to kick in until 2020, but could hit health plans for some school district employees.

Part of the overall cost of the ACA was covered by an excise tax on high-cost coverage offered by employers, sometimes nicknamed “Cadillac” coverage. That’s defined by the law as $10,200 for an individual or $27,500 for a family, pegged to 2018 and adjusted after that.

The National Education Association sees the tax as unfair. The union points to analyses that show the tax would disproportionately hit employees in states with high health-care costs and plans covering more women and older employers, including many of its members.

Sometimes educators are “forced to forgo raises, in exchange for fewer changes to their benefits,” said Joel Solomon, a senior policy analyst for NEA.

And if health-care costs are slimmed down, thanks to the tax, teachers may not necessarily get a pay bump to make up for diminished benefits, said Al Campos, a federal lobbyist for the union.

“Health care is one of the most important benefit features of a teachers’ compensation package,” Campos said.

Even though NEA supports the ACA overall, the union would like to see the excise tax stripped out. The American Federation of Teachers also sees the tax as “harmful” and has applauded policymakers who have supported getting rid of it.

Staffing Concerns

School district advocates also are tracking potential changes to the so-called “30-hour rule,” a requirement in the law that most employers offer insurance benefits to eligible employees who work more than 30 hours a week—or pay a penalty.

That’s caused headaches for some school districts, some of which have considered cutting hours for employees who work more than 30 hours a week but fewer than 40 hours, including substitute teachers, bus drivers, paraprofessionals, and cafeteria workers.

Schools might decide, for instance, not to hire a long-term substitute when a teacher is out for an extended period. Instead, the district might opt to rotate different substitutes in and out of a particular position, so that no one hits the 30-hour threshold, triggering the requirement for medical coverage.

That’s not ideal for student learning, said Noelle Ellerson Ng, the associate executive director for policy and advocacy at the AASA. The provision “undermines the control districts have in their staffing patterns,” Ng said.

The NEA though, said the provision helps make sure that employees who spend most of their time—an average of at least 30 hours a week—working for a school district can get covered. They’d like to see the provision remain, with some tweaks, Campos said.

A version of this article appeared in the March 01, 2017 edition of Education Week as Districts, Advocates Warily Await Health-Care Law Overhaul


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