Individuals with Disabilities Education Act (IDEA) and Medicaid

Publication Date: January 2003

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Education

Type:

Abstract:

The Individuals with Disabilities Education Act (IDEA) -- the centerpiece of federal legislation on educating children with disabilities -- is an unusual statute because it not only provides funds to states and school districts but it also guarantees the rights of children with disabilities to a free appropriate public education (FAPE). IDEA requires that children with disabilities be provided with special education and related services so that they can benefit from their guaranteed public education. For some children, benefitting from, or even attending, school depends on health-related services. For example, a child dependent on a ventilator for life support could require in-school staff to ensure the proper operation of the equipment in order to attend school. For such a child, IDEA requires that necessary staff and services be provided.

While IDEA mandates special education and related services, it is not intended to pay for the total cost of this education and these services. One approach Congress has taken to ease the burden on states and school districts of fulfilling the requirements of IDEA is to allow the use of funds available under Medicaid, a federal-state entitlement program providing medical assistance to certain low-income individuals, to finance health services delivered to special education students who are enrolled in Medicaid. However, for various possible reasons, Medicaid funds appear to account for only a small proportion of expenditures for special education and related services. These reasons include: most IDEA children are not enrolled in Medicaid; federal privacy requirements may hinder identifying which IDEA children are participating in Medicaid; in-school health services may often be of relatively low cost; Medicaid financial requirements may reduce reimbursement to schools; and Medicaid's complexities may make many school districts unwilling or unable to access this funding source.

Relatively little is known about the interrelationship between IDEA and Medicaid. Thus a state-by-state study might be useful to Congress in determining whether to take legislative action. Depending on the outcome of such a study, various changes to Medicaid could be considered. To the extent that problems arise because of program complexity, improving technical assistance and outreach might be useful. To the extent that problems are related to Medicaid eligibility, expanding Medicaid eligibility to cover more children with disabilities could be examined. And to the extent that the problem is one of Medicaid financing, changing some of the rules that may adversely impact local educational agencies (LEAs) could be contemplated. Since some might oppose any changes to Medicaid that would result in increased state costs, other alternatives might be considered. For example, creating a funding relationship between IDEA and the State Children's Health Insurance Program (SCHIP) could be examined. In addition, federal privacy requirements might be amended to facilitate the identification of children with disabilities served under IDEA who are also enrolled in Medicaid. Finally, IDEA amendments could be considered, such as targeting some funding for children with disabilities who require expensive health-related services in order to attend school.