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GOP Health Care Proposals: What Educators Should Know

By Alyson Klein — June 22, 2017 7 min read
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The Trump administration and congressional Republicans are in the midst of trying to replace the Patient Protection and Affordable Care Act—better known as “Obamacare"—with big implications for the nation’s schools when it come to special education funding, teacher benefits, and more.

And Thursday, after weeks of work behind closed doors, the U.S. Senate released its version of legislation to replace the ACA. The bill, which lawmakers could vote on as soon as early next week, may eventually be merged with a bill that passed the House narrowly back in May, with only Republican support. That legislation is called the American Health Care Act or “Trumpcare” to its detractors.

So just how would the Senate bill—the “Better Care Reconciliation Act"—impact schools? How is it different from the ACA and the House bill in ways that might matter to educators? Advocates—and senators—were still combing through a 142-page Senate draft for details Thursday so stay tuned.

But, in the meantime, check out a quick list of things to watch for in the debate over a new health care law:

What happens with Medicaid and special education?

The ACA enticed most states to expand eligibility for Medicaid, a big federal and state partnership program that helps low-income people, including children, get access to health care. Both the House and Senate bills appear to phase out that expansion, although the Senate does so at a slower pace than the House.

The House bill would distribute Medicaid funds on what’s called a “per capita” basis, based on how many people a state has from particular groups, including children and the elderly. The Senate bill appears to take a similar tack, advocates said. But increases to Medicaid would grow more slowly under the Senate measure, potentially leading to deeper cuts overtime.

Fans of this approach argue that it will spur states to think more innovatively about how they structure their Medicaid programs. But detractors, including a lot of education advocates, worry that it will mean big cuts to the program over time. The nonpartisan Congressional Budget Office has estimated that Medicaid could be scaled back to the tune of $800 billion over 10 years if the House bill becomes law. (No estimate yet for the Senate version.)

That’s important because Medicaid helps school districts cover the cost of services to eligible kids, including students in special education. (Think speech therapy, occupational therapy, even devices like wheelchairs.) In fact, AASA, the School Superintendents’ Association, estimates that school districts get about $4 billion a year through Medicaid. (That’s not chump change. In fact it’s about a third of federal special education state grants, and roughly the size of the Obama administration’s Race to the Top program.)

Exactly much money do schools stand to loose if the bills pass? That’s unclear, advocates say, and may vary wildly from state to state.

Still, education advocates are worried. AASA surveyed 1,000 educators in 42 states and found that two-thirds of districts use their Medicaid funds to cover salaries of professionals who work with students in special education.

And about 40 percent use the money to hook kids up with other health services. In some states, districts use the money to help cover things like vision and hearing screenings for Medicaid-eligible kids. AASA’s chart here:

And about 68 percent of districts surveyed say they use the money to pay the salaries of health professionals who service students. The House and Senate bills “threaten those crucial services,” said Carol Malone, a senior health policy specialist at the NEA. And if positions are cut, more work could fall on teachers, Malone said.

What’s more, scaling back Medicaid could also have an indirect impact on K-12 spending, said Sasha Pudelski, the assistant director of policy and advocacy at AASA. Medicaid and K-12 education are typically the two biggest ticket items in state budgets. If states try to make up for federal Medicaid cuts by using their own money, they may have to trim school budgets.

“The bill would substantially limit school districts’ abilty to provide health-care services for students with disabilities and students in poverty” because of the Medicaid changes, Pudelski said. “And we’re worried about other cuts to K-12 that will come as a result of taking on this enormous burden to fund Medicaid.”

Plus, thanks to ACA, there was a ton more attention on enrolling in health insurance. That meant that more kids were signed up for Medicaid, as well as ACA’s health insurance exchanges. The uninsured rate for those under 18 dropped from 7.1 percent to 4.8 percent as ACA implementation got going, one expert said. The Urban Institute has estimated that some 4.4 million kids could end up losing their health insurance if ACA is repealed without replacement legislation.

What happens with the ’30 Hour’ Rule?

This is a technical part of the “Obamacare” law that requires employers to offer health coverage to any eligible employee who works an average of at least 30 hours a week. Some school district advocates argue that this has made their lives difficult, since so many of their employees work somewhere between 30 and 40 hours. (Think long-term substitutes, paraprofessionals, or, say, a bus driver who is also the football coach.) Some districts in Indiana have sued the federal government over this provision of the law. The suit is pending.

And legislation has been introduced in Congress that would officially make the work week 40 hours, which is supported by AASA, among others.

Of course, substitute teachers, paraprofessionals, and others would like to be able to keep their health care, even if they work fewer than 40 hours. So this provision pits different education groups against one another.

The House and Senate bills leave the 30 hour rule on the books. But they it would scrap penalties for employers that don’t provide the coverage, advocates say.

What happens with ‘Cadillac’ Health Plans?

The ACA taxes so-called “high cost” health plans, defined as any plan that costs more than $10,200 a year for an individual. Teachers’ unions see that tax as unfair because it could disproportionately hit employees in states with high health-care costs, and plans that cover a lot of women and older employees—many of their members. The unions are fans of “Obamacare” overall, but they’d love to see this tax go away.

The House GOP bill doesn’t get rid of the tax, but it would push back its start date, from 2020, to 2025. The Senate measure includes similar language.

Pushing back the effective date of the tax isn’t good enough, according to the NEA. “It’s really bad health benefit and tax policy, and just postponing it doesn’t fix the inherent problem,” said Joel Solomon, a senior policy analyst at the NEA.

Even though the tax may not kick in for a while, it’s already having an influence on contract negotiations, and will lead to diminished teacher benefits for educators, he said.

What happens with mental health coverage?

ACA required all insurance plans to include certain components, including mental health coverage. Big changes to this requirement could impact what kinds of benefits kids get under their parents’ health care plans. For instance, if states don’t call for plans to cover mental health services, a child with Attention Deficit Hyperactivity Disorder may no longer be covered for psychiatric care. School districts would try to make up for the loss, advocates say, in part by hooking kids up with free or inexpensive community providers. But some of those providers may not have the capacity to take on a bunch of new clients, and some kids may not get the care they need.

Both chambers’ bills appear to keep the “essential health benefits” in place. But both bills would allow states that don’t want to offer those benefits to get a waiver from the feds.

And that has education advocates worried.

“We know that there were a lot of states that did not require mental health coverage before ACA,” said Kelly Vaillancourt Strobach, the director of government relations for the National Association of School Psychologists. “We have every reason to think that states would go back to the way things were before ... If the states pick and choose, mental and behavorial health care is always something that’s looked at last.”

Want more? Check out a previous version of this explainer, or read this story which dives deeper into the details of how the ACA has impacted schools.

Photo Credit: Getty Images


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