US Must Pay More Of Native American Tribes’ Healthcare Costs, Supreme Court Rules

U.S. Supreme Court

The U.S. Supreme Court has ruled that the federal government has been underfunding Native American tribes administering their own healthcare programs for 30 years and must pay potentially hundreds of millions more going forward.

In a 5-4 ruling, the court found that federal law requires the U.S. Department of Health and Human Services to cover the overhead costs that tribes incur when using money from Medicare, Medicaid, and private insurers. This ruling represents a victory for the San Carlos Apache Tribe in Arizona and the Northern Arapaho Tribe in Wyoming, both of which had sued over the funding.

Chief Justice John Roberts, joined by the court’s three liberals and conservative Justice Neil Gorsuch, a consistent supporter of Native American rights, wrote the majority opinion. The ruling affirmed decisions by the 9th and 10th U.S. Circuit Courts of Appeals. Carter Phillips of Sidley Austin, representing the San Carlos Apache tribe, called the decision “a huge win for Indian country and for the quality of healthcare provided on Indian reservations.”

Adam Unikowsky of Jenner & Block, who argued for the Northern Arapaho Tribe, said the ruling “will promote tribal sovereignty and provide resources for healthcare in under-served communities.”

U.S. Secretary of Health and Human Services Xavier Becerra called on Congress to ensure stable and adequate funding for HHS’s Indian Health Service (IHS) division in light of the ruling. The government estimated the cost of the funding could be between $800 million and $2 billion annually. The IHS provides healthcare services directly to about 2.8 million Native Americans.

Indian Self-Determination Act

Thursday’s decision centers on the Indian Self-Determination Act (ISDA), a 1975 law allowing Native American tribes to administer their own healthcare programs under contracts with IHS. These contracts require IHS to provide the same amount of funding it would if it were running the program directly and to cover administrative expenses incurred by the tribe. In 1994, ISDA was amended to clarify that payments from government and private insurance collected by the tribe supplement, and do not replace, IHS funding.

Both tribes sued IHS, claiming the agency refused to cover the administrative costs they incurred in spending insurance money. The government argued the law did not require them to cover those costs and said the tribes could use the insurance money for a wide range of healthcare-related purposes, meaning they were not part of their contracts with IHS. However, Roberts rejected that argument. He wrote that the tribes’ freedom in using the funds “should not be surprising given ISDA’s design to provide tribes greater flexibility in planning and implementing healthcare programs attuned to the needs of their communities.” He added that requiring tribes to bear those costs would effectively penalize them for choosing to administer their own programs.

Justice Brett Kavanaugh, joined by the other three conservative justices, dissented, stating that the majority ruling “upends” 30 years of practice, which Congress could have addressed but chose not to.