ASSOCIATION FOR CAREER & TECHNICAL EDUCATION®
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At first glance, the Affordable Care Act (ACA), commonly known as “Obamacare,” and efforts by President Trump and Congressional Republicans to repeal and replace it may not seem too relevant to CTE. However, the 2010 health care law and efforts to reverse it can affect CTE by way of state education funding, school districts’ hiring decisions and the cost of employer-based coverage for CTE professionals.
One major aspect of the ACA is federal support for states to expand eligibility for Medicaid to more low-income Americans, people with disabilities, children or other qualifying populations. Medicaid is the largest source of health care coverage in the U.S. and covers 39 percent of children under the age of 18. The ACA also extended mandatory Medicaid coverage to children in households at or below 138% of the federal poverty level. Many of these newly-qualified Medicaid recipients attend public schools, but federal reimbursements to these schools for students’ Medicaid benefits are threatened by a number of the ACA repeal proposals.
Many school districts receive significant amounts of money through Medicaid reimbursements to provide services to students in accordance with the Individuals with Disabilities Education Act (IDEA). Therefore, because Medicaid helps fund schools (including CTE programs) that provide required services to students receiving Medicaid who have Individual Education Plans, cuts or changes to Medicaid could reduce federal funds flowing into a school district’s budget, ultimately requiring state and local funding to fill in those gaps to provide required services. It is estimated that Medicaid provides roughly $3 billion each year in federal funding to schools, making the potential loss extremely significant since schools still must provide the same services under IDEA. The Center on Budget and Policy Priorities has more on how Medicaid is used in schools and the implications of cuts to the program. The Center for American Progress also has a table showing federal reimbursements for Medicaid spending in schools by state, along with estimated state-by-state losses under a recent health care repeal proposal.
What’s more, lower levels of direct Medicaid spending in schools that could result from cuts or changes to Medicaid and the ACA are not the only way schools could take a funding hit. These changes could also result in state cuts to education funding.
Education spending is a significant discretionary allocation in a state’s budget. When states are effectively required to spend more money on health care to offset lower federal Medicaid funding, they either have to increase revenue or reduce other expenditures. In many cases, states choose to compensate for the loss of funds for other spending priorities by drawing from education spending. In fact, a report from the Brookings Institution has suggested that “each new dollar in state Medicaid spending crowds out higher education appropriations by about six to seven cents.”
Besides federal Medicaid funding, the health care debate could also impact CTE in other ways. One often-discussed issue is the ACA’s “30-hour rule” mandating larger employers offer health care to eligible employees working 30 hours per week or more. Some have contended that this rule has unique effects on school districts since some substitute teachers, janitors, bus drivers, coaches or other school employees work between 30 and 40 hours per week. Opponents of the rule claim school districts should not be required to provide health care coverage to these employees, but not everyone agrees. Supporters claim the rule rightfully grants health care access to the aforementioned employees. Nonetheless, it is more widely acknowledged that at least minor tweaks may be necessary to address some reported instances of school districts circumventing the rule by reducing hours for certain employees.
Another issue that some education groups have asked to be changed in the ACA is the so called “Cadillac tax” on high-cost health care plans. Essentially, under the ACA employers are taxed on higher-cost health care plans above a certain price threshold. Though the tax was meant to address the rising cost of care, opponents worry it could be passed on to employees. Moreover, studies have shown that location is a major factor in the cost of a health care plan. Thus, even a plan with average benefits may exceed the national price threshold, be deemed to be of high-cost, and be subjected to a tax. Because teachers are located in every corner of the country, this tax on high-cost plans could arbitrarily penalize some educators, and as a result, groups like the American Federation of Teachers and National Education Association have pushed to abolish the tax.
In conclusion, President Trump was correct when he recently called health care “an unbelievably complex subject.” As complicated as it may be, changes to the ACA and Medicaid could have a real impact on CTE programs and professionals across the country. In the past, ACTE has not included health care policy as part of our legislative portfolio. However, as the voice for CTE professionals, we want to hear directly from our members as we explore weighing in on the health care debate on issues that have the potential to affect CTE programs, educators or education funding. Let us know what you think about the health care debate and CTE, particularly how potential cuts to Medicaid could affect your program. Comment below or email us at email@example.com.
Posted by Jarrod Nagurka on 04/17/2017 at 02:05 PM in Advocacy Resources, Federal Funding, In the News | Permalink
Education Funding, Health Care
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