As Legislature mulls Medicaid cuts, parents and providers face uncertainty

BOISE (Idaho EdNews) — Parents of children with disabilities are concerned and wondering what will happen to their kids as the Legislature mulls Gov. Brad Little’s recommendation to cut $22 million in Medicaid spending.

Angela Lindig, executive director of the nonprofit Idaho Parents Unlimited, said she’s been fielding calls from parents of young children who rely on school-based Medicaid services and from parents of adult children who wonder what will happen when they can no longer care for their dependent children.

“Our families are concerned,” Lindig told EdNews Monday. “They are worried about the services that their children may not receive. They’re worried about their child’s Medicaid being cut. They’re worried about them not receiving services in school. They’re worried about their kids’ future.”

Lindig and other staff at the statewide nonprofit help families navigate services, but they’re also hearing from Medicaid providers who are navigating the uncertainty.

“How do I explain this to families? How do I explain this to my employees? Like, what is happening? What do you guys know?” said Melissa Vian, parent training and information director for Idaho Parents Unlimited, repeating the questions she’s heard from providers.

Little’s budget recommendation for the 2027 fiscal year, which begins July 1, calls for $45 million in Medicaid cuts.

The state is grappling with an estimated $555 million shortfall for next fiscal year. This comes a year after the Legislature made $400 million in tax cuts and created a $50 million private school tax credit.

Of the $45 million in recommended Medicaid cuts, the state has already slashed $23 million by cutting provider reimbursement by 4% effective in September. The governor’s budget makes that 4% cut permanent.

The Legislature has discretion on how to make the remaining $22 million in Medicaid cuts.

Leaders of the Joint Finance-Appropriations Committee, which sets state agency budgets,last week asked the Idaho Division of Medicaid to come up with plans for 1% and 2% cuts for both fiscal years 2026, which ends June 30, and 2027.

That request came one week after a prominent JFAC member questioned whether the state should be supporting high-needs students.

Rep. Steve Miller, R-Fairfield, said children who have “no future in some level of self-care” would be better served in health care facilities that have “professional capability of taking care of them.”

“We are educators,” Miller said. “We are not designed for medical health or mental health care for students who do not have the future of being self-sustaining.”

Lindig said those comments were “disparaging,” especially after the recent 50th anniversary of the Individuals with Disabilities Education Act.

Signed into law by President Gerald Ford in November 1975, the IDEA established the right of every child to receive a “free appropriate public education in the least restrictive environment.”

“We are here to provide education to all students,” Lindig said. “It’s hard when you see cuts to balance a budget that impact our kids who are the most vulnerable.”

How does school-based Medicaid work?

Kids can receive care through Medicaid in two ways: school-based services and community-based services.

Ramona Lee, special education director for West Ada School District, says there is an elephant in the room as the Legislature considers Medicaid cuts.

She said she keeps reminding legislators that school-based Medicaid services don’t have any impact on the state’s budget. The federal government and school districts split those costs.

“We are trying to make everyone aware that when they talk about these cuts, we should be talking about school-based services separately from community-based services,” Lee said. “Because just doing a blanket cut is going to harm schools but not have any benefit to the state budget.”

Schools provide more than just a teacher and a classroom.

If a student qualifies for special education services, school staff are required to write individualized education programs, or IEPs. These plans lay out any related services the students require, like nursing, transportation or occupational therapy, Lee explained.

If a student on an IEP qualifies for Medicaid, school districts can ask the parent for consent to bill Medicaid for some reimbursement. Lee said school-based services and community-based services are separate, so receiving one does not disqualify families from receiving the other.

As of September, Idaho has a list of 88 service codes that schools can use to bill Medicaid. Eligible services include physical therapy, speech therapy, crisis intervention, behavioral interventions, psychiatric evaluations, psychotherapy, nursing services and habilitative skill building. Some providers, such as speech therapists, can provide services virtually, but some medical needs are more intensive.

“We have health techs who help with medical needs of kids, like when kids need catheterization at school, or tube feedings, things like that,” Lee said. “We have to have staff who are trained to do that.”

Schools provide the services and the federal government reimburses a portion of the cost through Medicaid.

The Individuals with Disabilities Education Act originally promised that the federal government would cover 40% of the average cost to educate children with disabilities, but that has never happened.

Congress in 1988 amended the federal law to clarify that Medicaid can be used to pay for health-related services under the IDEA.

Lee, who has worked in special education for decades, said she remembers that shift.

“So the U.S. government said, ‘Hey, until we get to full funding of IDEA, we should let schools bill Medicaid and get some reimbursement for those health-related services they give as part of the individual education plans where we’re providing services to kids. So that’s when school-based services started occurring more.”

If a service costs $100, Lee said Medicaid can provide a reimbursement of about $64.

“It’s not like they pay us for the cost of these services, because the reimbursement we get is much less than the actual cost, because we’re providing the matching payment,” she said.

According to Lee, research has shown that when schools provide health-related services, they get it more consistently. Parents don’t have to schedule and travel to appointments.

“It’s good for families and communities because there are providers here,” Lee said. “There are a lot of kids that the only services they get are school based, especially mental health.”

Possible impacts of Medicaid cuts

It’s not clear how the Legislature might implement Little’s recommended Medicaid cuts, but Lindig said one of the indirect impacts to schools could be a shortage of providers.

Health care providers since September have already taken a 4% cut to Medicaid reimbursement. Any further state and federal cuts could worsen those rates.
“Providers may go out of business or opt not to take Medicaid any longer,” Lindig said.

While different funding pots cover community-based and school-based services, both rely on the same providers. So even if the Legislature carves out school services from any cuts, the workers who provide those services might become more scarce.

It’s already hard for schools to find some direct-care providers and specialists, like speech therapists, Lindig said.

Behavior prevention and intervention is another important piece of school-based Medicaid services. Lindig said some students need “pretty intensive” behavioral help.

When kids get the proper services, it takes the pressure off of other teachers, staff and students within a school building. But if those services are cut, schools could have to mitigate those behaviors.

“Early intervention is critical, and when we start to dismantle our systems, it shows up somewhere,” Lindig said.

At Idaho Parents Unlimited, Lindig said their message to parents has been clear: Call your legislators and share your personal stories.

Data and statistics can only go so far, she said.

Like most staff at the nonprofit, Lindig has a child with a disability. Her 30-year-old daughter has a rare genetic disorder. Years ago, when her daughter was little and used a small pediatric walker, Lindig said her family visited the Statehouse to advocate for special education.

“I knew that my daughter was really cute, and 4 years old and walking with her little walker. And she literally, physically, ran her walker into Governor Kempthorne,” Lindig said, referring to Republican Gov. Dirk Kempthorne, who was in office from 1999 to 2006.

Lindig said the governor sat down on the steps with her daughter and had a talk. As the state was considering Medicaid cuts at the time, she recalled the governor saying, “Not on my watch.”

“We had a leader who said — this might not be verbatim — ‘I’m not going to balance this budget on the backs of people with disabilities,’” Lindig said. “We need that. We need that leadership desperately.”

Originally posted on IdahoEdNews.org on February 3, 2026