Indian Health Service Funding: Overview

Introduction

The Indian Health Service (IHS) is a federal program under the executive branch of the US government that is designed to provide health care for American Indians and Alaska Natives (AI/ANs). A long series of federal statutes, executive orders, and treaties between the federal government and AI/AN peoples have resulted in a situation of limited autonomy and government subsidization and assistance. By 2020 the IHS was running or financially supporting health-care facilities for some 2.6 million AI/ANs in thirty-seven states.

Many analysts argue that the IHS has been chronically underfunded and undersupported by the federal government, leading to substandard delivery of health care to AI/AN populations. One of the current debates in this vein concerns whether AI/AN health-care assistance could be accomplished by providing AI/ANs with expanded access to the Medicare program, rather than by maintaining the IHS system. Others argue that the IHS system should continue but that the federal government should increase investment in the program.

Understanding the Discussion

American Indians and Alaska Natives (AI/ANs): The indigenous peoples of the mainland United States, as distinct from Native Americans, who encompass the indigenous people of the US mainland, Hawaii, and territories.

Domestic dependent nations: Tribal nations within the United States that have a semiautonomous relationship with the US federal government.

Medicaid: A federal health insurance program that provides coverage to low-income pregnant women and families and to those with disabilities.

Medicare: A federal health insurance program that provides coverage to Americans aged sixty-five and over, those with disabilities, and those with end-stage kidney disease.

Medicare for All: Refers to proposals for a federal single-payer health-care program intended to provide some degree of health-care coverage for all or most Americans, much like the existing Medicare program.

Preventive care: Medical care involving efforts to detect problems or to prevent health problems, as opposed to medical care used only after a problem has been identified; sometimes written as “preventative care.”

Tribal self-determination: Provisions of the IHS laws allowing tribal governments to appropriate IHS funds to be used in independently operated tribal health services.

History

The Indian Healthcare Service (IHS) is the result of a series of agreements, laws, treaties, and partnerships that reflect the ongoing evolution of indigenous cultures within the larger American society. The American Indians and Alaska Natives (AI/ANs) were once members of fully independent societies stretched across the entirety of the North American continent. The European colonization of the Americans resulted in the military persecution and genocide of American Indians and Alaska Natives. Systematic persecution led to the spread of poverty and disease among indigenous populations. Over the centuries, the US government has attempted to legitimize the destruction of indigenous cultures through a series of treaties and agreements between the colonial government (and later the federal government) and the leaders within various tribal nations. Between 1778 and 1868, 367 treaties between the federal government and indigenous tribes were ratified by the federal government; more were drafted but never ratified. According to the supremacy clause of the US Constitution, treaties between the United States and a foreign nation, along with the Constitution and federal statutes, are the “supreme law of the land” superseding any contrary laws promulgated among the states. In specific treaties, still in effect, the federal government agreed to provide health-care services to indigenous groups in return for territories ceded to the federal government in previous centuries.

The modern federal approach to US-indigenous relations was framed by the Marshall Trilogy, a series of three US Supreme Court decisions delivered in 1823, 1831, and 1832. In these cases, the court’s rulings and the opinions written by Chief Justice John Marshall established the legal basis of modern law regarding the relationship between North America’s indigenous inhabitants and the US federal government. The court’s rulings defined cohesive indigenous societies (those formally recognized by the federal government) as “domestic dependent nations,” meaning that indigenous societies are entitled to have their own government, their own laws, their own taxation systems, and so forth, and are not bound by state law, even though the boundaries of their territories may lie within the borders of a US state. The Marshall Trilogy also established that only the federal government may engage in land purchases or other modifications of agreements with indigenous groups and established that the United States has an obligation to support indigenous communities because of the treaties and agreements that had previously been made between the United States and tribal nations. Thus, tribes that are recognized by the government today exist in a state of dual sovereignty, in which members are citizens both of the United States and of their respective governments.

In 1849 the Bureau of Indian Affairs (BIA), established in 1824, was transferred from the War Department to the Department of the Interior and became responsible for handling congressional appropriations for American Indians. It was the BIA that oversaw the allocation of funds for American Indian health care, but this system underwent many different changes over the years. In the 1950s and ’60s, there was a federal effort to reform the legal relationship between the United States and indigenous peoples by terminating tribal support and encouraging indigenous peoples to assimilate into mainstream American society. This process resulted in more than 160,000 AI/ANs leaving reservations, federally administered lands set aside for use by members of a federally recognized tribe, and relocating to cities around the United States. The 1954 Transfer Act transferred supervision of indigenous health services from the BIA to the Public Health Service (PHS) within the US Department of Health, Education, and Welfare, on July 1, 1955; this resulted in the establishment of the Indian Health Service (IHS). Further, the Transfer Act established that the secretary of health, education, and welfare was authorized to enter into contracts with private vendors to provide better quality health services to indigenous persons.

The next major change in IHS policy came with the Indian Self-Determination and Education Assistance Act of 1975 (ISDEAA), which authorized tribes to assume management of federal programs operating within their territories, including IHS operations. Under the ISDEAA, members of tribal nations could utilize federal health-care services or could apply to appropriate the funding set aside for IHS programs and use those funds to create and pay for independent programs. The ISDEAA provides a contract method for this transfer, which essentially provides the tribe with a block grant that can be used to fund health-care programs. By 2020, tribal nations themselves managed more than half of the resources allocated for the IHS.

The Indian Health Care Improvement Act of 1976 (IHCIA) expanded on the ISDEAA and helped to create a national network through which IHS revenues could be used to fund health-care initiatives off tribal land, including national urban Indian health programs. Further, the 1976 restructuring provided another way for IHS facilities and locally managed contract health-care systems to obtain funding by billing Medicare, Medicaid, or third-party insurers directly. In the 1990s IHS and contract facilities were also allowed to bill the Children’s Health Insurance Program (CHIP). The IHCIA was permanently reauthorized under the 2010 Affordable Care Act, put into place under the administration of President Barack Obama.

AI/ANs have had significantly poorer health outcomes than the general population, with an average life expectancy about five years lower than the US average, according to a 2017 IHS report. That same year National Public Radio found that life expectancies were as much as twenty years shorter for AI/AN people in certain states, such as Montana. Death rates from liver disease, cirrhosis, diabetes, accidental injury, assault or homicide, and intentional self-harm or suicide were significantly higher in many AI/AN populations. Poverty remained a persistent, pervasive problem: according to that year’s American Community Survey, the rate of poverty for AI/AN households was estimated at 17.5 percent, nearly twice that for the overall population (9.5 percent). Inadequate access to preventive care, unemployment, poor economic outcomes, inadequate housing, infrastructure, and educational opportunities all contribute to such health disparities.

Indian Health Service Funding Today

The Indian Health Service is a branch of the Department of Health and Human Services and remains the primary provider of health services for AI/ANs. Members of 574 federally recognized tribes and their descendants are eligible for IHS services, and the system provides for approximately 2.6 million people, over two-thirds of whom live off-reservation in urban areas; according to the 2018 American Community Survey, there were an estimated 6.6 million people of AI/AN descent living in the US. The federally managed IHS system consisted of 24 hospitals, 51 health centers, 24 health stations, 12 school health centers, and 6 youth regional treatment centers in mid-2020. Through self-determination contracts, AI/AN populations operated an additional 22 hospitals, 279 health centers, 79 health stations, 59 Alaskan village clinics, 6 school health centers, and 6 youth regional treatment centers.

One major problem facing the IHS is funding. Increases in congressional budget allocations for IHS support have not kept pace with the overall increased cost of medical care in the United States. In 2013, after about a decade of growing appropriations, Congress voted to sequester funds from the IHS, which reduced its funding by 5 percent. This was controversial in part because other federally administered and funded health programs, such as CHIP, Medicaid, and veterans’ health services, were exempt from the budget cuts. The measure also exceeded a 1985 cap on budget cuts for IHS, which the Office of Management and Budget deemed largely inapplicable. By fiscal year 2023, the IHS had an annual budget of $6.96 billion. IHS was funded in advance for the first time in 2024, though it also faced budget cuts for the next fiscal year, with only $5.19 billion for 2025. Tribal advocates said the amount was still inadequate to fully fund the organization.

Some advocates and activists have called for the federal government to increase funding for IHS and make it more consistent, while others have suggested that the IHS system is outdated or overly complicated and should be replaced with an alternate system. Amid debates about expanding Medicare to provide some form of socialized health-care system for US citizens, it has been suggested that the expansion of Medicare might cover the expenses involved in providing Indigenous health services more efficiently and successfully than the existing system does.

These essays and any opinions, information, or representations contained therein are the creation of the particular author and do not necessarily reflect the opinion of EBSCO Information Services.

Bibliography

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“Quick Look.” Indian Health Service, US Dept. of Health and Human Services, Apr. 2017, www.ihs.gov/newsroom/factsheets/quicklook. Accessed 31 May 2024.

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