Medicaid serves about a third of American Indian and Alaska Native (AI/AN) people. Policies that strengthen Medicaid programs and focus on AI/AN peoples’ needs can help address the significant health disparities in Native communities. While Medicaid programs are federally required to work with Tribal leaders on such policies, stronger partnerships can result in the development of more impactful policies and programs.

However, some state Medicaid staff may lack familiarity working directly with Tribal governments and health care providers, as well as the unique federal laws and treaties governing Tribal-Medicaid relationships. Relationships between Tribal governments and Medicaid may not always be strong and state staff may be unfamiliar with or unsure how to recognize Tribal sovereignty. Additionally, they may not devote the necessary time and resources to build relationships with Native leaders and communities. State politics can also impact these relationships, with changes in administrations and priorities influencing whether and how partnerships are built and sustained. This blog post shares information to support state agencies and staff in building the strong, mutually respectful relationships with Tribal leaders and health care providers that are necessary to support better health and health care for Native people.

About the Indian Health Service

The Indian Health Service (IHS) is the federal agency that oversees the nation’s health care delivery system for eligible AI/AN people. IHS funds multiple programs and types of facilities, including IHS facilities (run by the federal government), Tribal facilities (run by Tribes or Tribal organizations), or urban Indian organizations (run by non-profit organizations). Collectively, these health care facilities are known as “I/T/Us.” Health care services that are offered varies by facility, though many focus on primary and preventive care.

Unlike Medicaid and Medicare, which guarantee specific benefits to eligible people regardless of cost, IHS is funded through a limited annual budget that is appropriated by Congress. When the budget runs out, services can become more limited or are not offered.

The IHS is widely considered to be deeply underfunded for the population it serves. In 2023, per capita expenditures for people receiving care through IHS were just under half of that for Medicaid ($4,078, compared to $8,873), and less than a third of overall per capita health care spending ($13,493). Low funding levels limit I/T/Us in services they can offer and how many patients they can serve. Without increased Congressional appropriations, I/T/Us often seek additional funding through insurance reimbursements (including Medicaid and Medicare) and grants. However, these sources are insufficient to bridge the substantial gap in expenditures between IHS and other health care programs, and to meet Native people’s health care needs.

Underfunding of IHS is one contributing factor to the high rates of health disparities experienced by AI/AN people. These disparities include higher mortality rates from substance use disorders, diabetes, unintentional injuries and violence, and pregnancy-related causes, and stem from structural and legal factors that have contributed to poverty and trauma in Native communities.

Medicaid’s Role in Supporting American Indians and Alaska Natives

Health insurance, including Medicaid and Medicare, can cover Native people and reimburse I/T/Us for provision of care. These third-party payments are a key source of revenue for I/T/Us, and Medicaid is a particularly important payer. In 2025, Medicaid payments are estimated to provide almost 13 percent of total funding for IHS programs (total funding is comprised both of Congressional appropriations and collections from third-party payers). Medicaid payments can improve financial stability of IHS and increase its capacity to provide services to Native people.   

While eligibility rules for public insurance programs are generally the same for AI/AN and non-AI/AN people, some unique provisions exist for Tribal members. For instance, income limits for Medicaid eligibility may exclude some income related to Tribal lands or cultural activities, and specific protections govern how Medicaid managed care programs interact with Tribal citizens.

Key Concepts for Partnering with Tribal Governments

Because Medicaid is a source of health insurance for many Tribal members, strong partnerships between Tribal leaders and Medicaid programs can help improve health and well-being for Native people, their families, and communities. Tribal leaders have the right to oversee health care delivered to their citizens and can help Medicaid agencies create programs that are culturally responsive, meet the needs of Native people, and build on their strengths.

Building stronger relationships takes time and effort. One starting point is to ensure state Medicaid staff understand the unique status of Tribes when working with Tribal leaders, health departments, and health care providers. Familiarity with the following concepts may be helpful:

• Federal trust responsibility: Through federal law and treaties, the U.S. government is required to provide health care to AI/AN people. It is due to this trust responsibility that the IHS was formed. Access to services based on the federal trust responsibility, including health care services, relies on the political status of being AI/AN (in most cases, defined as enrollment in a federally recognized Tribe), not a racial status. In Medicaid, the federal trust responsibility is reflected through the 100 percent federal match for services delivered to Medicaid-covered AI/AN people at IHS and Tribal health care facilities. Some urban Indian organizations (UIOs) —  nonprofit entities providing health services to AI/AN people in urban areas — and states are exploring if they can secure the 100 percent federal match for UIOs, following the American Rescue Plan Act’s temporary expansion.
• Tribal sovereignty: Native nations are distinct sovereign nations that share geography with the U.S. and govern their citizens within their territories. Conversations between Tribal leaders and state or federal government officials should reflect this government-to-government dynamic, evoking a diplomatic relationship, rather than treating Tribal leaders and their delegates as constituents. In addition to following the formal processes of Tribal consultation (see next bullet), states can recognize Tribal sovereignty by following the Tribe’s lead in setting health care priorities for its members. For example, recent 1115 waiver approvals for Medicaid coverage of traditional health care practices support Tribal leaders who want to increase access to these types of religious, spiritual, and cultural healing practices for their citizens. 
• Tribal consultation: Tribal consultation is the legally required formal government-to-government dialogue that is undertaken when federal or state governments create or change policy that will impact Tribal citizens. In the context of Medicaid policy, state Medicaid agencies must consult with Tribal governments when Medicaid policy changes will have an impact on Tribal citizens who are covered by Medicaid. Consultations designed to respect Tribal sovereignty, including deferring to Tribal leaders in setting the agenda and ensuring Medicaid leaders with decision-making power join consultations, can result in more valuable connections between Tribal leaders and Medicaid staff. State regulations strengthening the Tribal consultation process, like those in Michigan and Washington State, can help transform the consultation process. Creating additional opportunities to work together outside of consultation can also support the consultation process, making it more impactful.

State Medicaid policy can significantly impact health care for AI/AN people, however, it is critical to co-design policy with Tribal leaders. State Medicaid agencies that understand Tribal sovereignty and work to strengthen Tribal consultation practices are more likely to build and sustain stronger partnerships with Tribes. Together, Medicaid and Tribal leaders can achieve shared goals of addressing health disparities and improving health and well-being in Native communities.

*Genriel Ribitsch is a former intern at the Center for Health Care Strategies.