Ensuring Sovereignty in Healthcare: A Comparison of Tribal Healthcare Compacts and Medicaid
abstract. This Note examines federal-state and federal-tribe relationships through a comparison of Medicaid and the Indian Health Service (IHS). Analysis of tribal contracting and compacting documents and Medicaid state plans reflects the history of each program: Medicaid is a product of trusting federal-state collaboration, while the IHS reflects a history of distrust between tribes and executive-branch agencies in particular. This finding suggests that IHS compacting and contracting practices have significant lessons for Medicaid as the latter program negotiates with a hostile federal government.
author. Yale Law School, J.D. Class of 2025. Author is not a tribal citizen or of tribal descent. I would like to thank Gerald Torres, Lloyd Miller, Meghanlata Gupta, Demi Moore, and Ashlee Fox for helpful comments on this piece. I would also like to thank K.N. McCleary specially. In addition to their work as my TA while I developed this piece, K. taught me to write a legal memo; to conduct legal research; and, most importantly, to think critically about the law’s impact outside of an academic exercise. Many thanks as well to the editors of the Yale Law Journal, and particularly Laura Bairett, for all their thoughtful work on this piece. Finally, I would like to thank my husband, James Conley, for all his support throughout my law-school journey. All errors and opinions are my own.
Introduction
For twelve hours, Cory Booker and Hakeem Jeffries sat on the steps of the Capitol. Part political stunt, part policy discussion, their sit-in was a plea to protect Medicaid and other federal programs.1 Congressional Republicans had introduced a bill that threatened to cut $800 billion from Medicaid—a significant portion of the program’s federal budget.2 Booker and Jeffries hosted policy experts, other members of Congress, and passersby to talk about the importance of Medicaid and similar programs. Despite their best efforts, the massive Medicaid cuts passed and were signed by President Trump as part of the One Big Beautiful Bill Act (OBBBA) on July 4, 2025.3 As enacted, this cut is the largest in the program’s history and will reduce coverage under a program that has been providing healthcare for those in poverty since 1965.4
Threats to Medicaid are not exactly new. The program has faced opposition almost since inception; experts have theorized that the program was only passed into law on Medicare’s coattails,5 and proposals to block grant Medicaid or impose work requirements have been common throughout the program’s history.6 Yet despite these ongoing threats, Medicaid has mostly existed quietly in the background, providing mandatory state and federal funding to care for some of the nation’s most vulnerable patients.7 Medicaid is one of the nation’s largest sources of insurance coverage and one of the largest line items in state budgets.8 The One Big Beautiful Bill Act that Booker and Jeffries protested will shock state budgets, deal a damaging blow to doctors and hospitals, and, most importantly, disrupt healthcare for millions of Americans. For the first time, Medicaid is facing a truly existential threat.
For the Indian Health Service (IHS), however, underfunding has long been a daily reality. Per capita, the IHS spends about half of what Medicaid spends and less than half of what the Department of Veterans Affairs spends.9 At oral argument in Becerra v. San Carlos Apache Tribe, a recent Supreme Court case concerning disputed IHS funding, Justice Sotomayor generously described the IHS’s spending: “It’s not as if all of this money is bringing us a luxury healthcare spa.”10 At that same argument, the Biden Administration acknowledged that solely providing the tribes with contract-support costs—not even fully funding all necessary healthcare services—would increase the IHS’s spending from anywhere between $800 million to $2 billion per year.11 Most recently, the Trump Administration has also proposed cutting IHS funding by up to $900 million in fiscal year 2026.12 For the IHS, a hostile lack of funding is nothing new.
While the IHS’s chronic underfunding has created access-to-care problems in Indian country, the IHS has still managed to succeed. The IHS is not an entitlement program, meaning that the agency lacks a set array of guaranteed services and often runs out of funding for needed services toward the end of the year.13 Furthermore, the IHS primarily consists of a collection of clinics that provide limited services to tribal members and a fund that can pay for needed external care.14 However, the IHS has had success in improving the population health of tribes.15 Through contracts (also called Title I contracts) and more flexible self-governance compacts (Title V compacts), tribes have partnered with the federal government to manage tribal health services and facilities.16 In addition to operating traditional brick-and-mortar clinics, the IHS runs creative public-health programs that fill gaps and maximize its limited funding.17
Given the passage of the OBBBA, the Medicaid program faces an uncertain future and a new, potentially hostile relationship with the federal government.18 As a result, state Medicaid programs may have much to learn from the IHS as they struggle to navigate an uncertain federal landscape. And beyond the current federal political shift, the IHS and Medicaid care for similarly vulnerable populations and face similar challenges in care and coverage. For example, Medicaid is dealing with significant problems in rural health, including provider and funding shortfalls in remote areas of the country;19 the IHS has been dealing with the same problems for much longer.20 Any solutions for the IHS would also support Medicaid program goals, and vice versa.
This Note compares the IHS to Medicaid, an analysis that is novel in the legal literature.21 The Note undertakes this analysis for a few reasons. First, as noted above, the IHS and Medicaid provide care to very similar populations, and lessons from one are instructive to the other. Medicaid provides insurance coverage for those experiencing poverty, with coverage historically limited to the elderly, pregnant woman, people with disabilities, and families with children.22 The IHS provides medical care and coverage for enrolled tribal citizens.23 Though the populations are different, each has poor population health and low levels of trust in medicine due to historically problematic treatment.24 Second, the IHS and Medicaid both involve partnerships between the federal government and a sovereign entity (i.e., a state or a tribe) to provide healthcare services to a set population. The legal relationships that tribes and states have with the federal government are very different, and Medicaid and the IHS are very different. However, the differences in the legal relationships and the healthcare programs formed are related; each healthcare program reflects its underlying history and legal relationship. Medicaid and IHS compacting each evolved based on a unique relationship between two sovereigns. A comparison of the two programs demonstrates how a different legal and historical relationship has impacted the resulting services and programs created under federal-state or federal-tribe partnerships.
Finally, the two programs’ structural differences can shed light on policy proposals for each. The Biden Administration proposed to fund the IHS fully,25 a promise that has at times been echoed by the Trump Administration,26 which would make it look more like Medicaid. As mentioned above, the OBBBA’s cuts to Medicaid funding will lead to some of the same challenges around underfunding that the IHS has dealt with since its inception. Particularly, the IHS’s history of negotiating with a recalcitrant federal government may provide valuable insight for a new era of Medicaid.
This Note discusses both programs, including their statutory and contracting structures, and makes recommendations for the future of Medicaid. Part I explores the background of each program, including the programs’ history, current structure, and challenges for the future. These histories illustrate how the IHS’s current structure, which creates a federal-tribal partnership for tribal administration of the IHS, grew out of significant distrust between the tribes and the federal government. Part I also demonstrates that, conversely, Medicaid has a history of trust: state Medicaid agencies have been able to rely on federal executive-branch partners. Part II examines the programs’ structures in more detail, focusing on how the federal government contracts with tribes and states to offer the IHS and Medicaid. An analysis of contract formation and contract language shows that the federal government treats Medicaid and the IHS differently and details how the tribes have used different contracting and compacting structures to protect their interests and promote tribal sovereignty. Part III proceeds to outline prescriptive lessons that the IHS’s self-governance program has for Medicaid. When dealing with fickle federal partners and uncertain funding, state Medicaid agencies may want to consider how best to communicate about their efforts, negotiate with the federal government, and secure their programs effectively—similarly to the IHS’s current approach and structure. Tribes and states are not the same, and Medicaid and the IHS differ significantly, but a comparison of the two offers a new path forward to promote public health in uncertain times.
See Edward Helmore, Hakeem Jeffries and Cory Booker Hold 12-Hour Sit-in Against GOP Funding Plan, Guardian (Apr. 28, 2025, 8:57 AM ET), https://www.theguardian.com/us-news/2025/apr/27/hakeem-jeffries-cory-booker-livestream-protest-republican-funding-bill [https://perma.cc/K9MN-8HLZ].
See One Big Beautiful Bill Act, Pub. L. No. 119-21, §§ 71103, 71104, 139 Stat. 72, 291-94 (2025) (increasing requirements for confirming eligibility, which will likely lower overall program enrollment); id. § 71114, 139 Stat. at 301 (sunsetting the increased Federal Medical Assistance Percentage (FMAP) initiative for Medicaid recipients made eligible by the Affordable Care Act); id. § 71115, 139 Stat. at 301-02 (reducing states’ ability to tax Medicaid providers, reducing state income); see also Kody Kinsley & Dan Rusyniak, Medicaid Cuts Proposed by Congress Will Shift Costs to States, Reduce Benefits, and Hurt Families, Commonwealth Fund (June 20, 2025), https://www.commonwealthfund.org/blog/2025/medicaid-cuts-proposed-congress-will-shift-costs-states-reduce-benefits-and-hurt-families [https://perma.cc/8UAF-B5QB] (explaining the One Big Beautiful Bill Act’s impact on red tape, coverage, and rural communities).
See One Big Beautiful Bill Act, Pub. L. No. 119-21, 139 Stat. 72 (2025). For more on the legislative history of the Act, see Sarah Kliff & Margot Sanger-Katz, The Senate Wants Billions More in Medicaid Cuts, Pinching States and Infuriating Hospitals, N.Y. Times (June 17, 2025), https://www.nytimes.com/2025/06/17/upshot/medicaid-cuts-republicans-senate.html [https://perma.cc/34LY-SHCW].
See generally Madeline Guth & MaryBeth Musumeci, An Overview of Medicaid Work Requirements: What Happened Under the Trump and Biden Administrations?, Kaiser Fam. Found. (May 3, 2022), https://www.kff.org/medicaid/issue-brief/an-overview-of-medicaid-work-requirements-what-happened-under-the-trump-and-biden-administrations [https://perma.cc/G24U-4EWU] (describing some of the history of work-requirement proposals); Jeanne M. Lambrew, Making Medicaid a Block Grant Program: An Analysis of the Implications of Past Proposals, 83 Milbank Q. 41 (2005) (discussing the history of Medicaid block-grant proposals).
See generally Policy Basics: Introduction to Medicaid, Ctr. on Budget & Pol’y Priorities (June 10, 2025), https://www.cbpp.org/research/health/introduction-to-medicaid [https://perma.cc/4ZNS-BEEW] (explaining the mechanics and the importance of Medicaid); Jill Quadagno, The Transformation of Medicaid from Poor Law Legacy to Middle-Class Entitlement, in Medicare and Medicaid at 50, supra note 5, at 77 (describing Medicaid’s evolution into a program relied upon by many).
See U.S. Gov’t Accountability Off., GAO-19-74R, Indian Health Service: Spending Levels and Characteristics of IHS and Three Other Federal Health Care Programs 5 (2018) (listing Medicaid per capita spending as $8,109, Veterans Health Administration per capita spending as $10,692, and Indian Health Service (IHS) per capita spending as $4,078 in 2017).
Id. at 17. Contract-support costs refer to the additional costs that tribes incur by entering into partnership with the federal government and taking over administration of their IHS programs. The federal government does not have to pay such costs when administering the same program due to the federal government’s existing infrastructure. For example, the government is effectively self-insured through the Federal Tort Claims Act, but tribes may need to buy general insurance or malpractice insurance for their facilities and providers. See Indian Health Manual Part 6, Chapter 3: Manual Exhibit 6-3-G, Indian Health Serv. (Aug. 6, 2019), https://www.ihs.gov/ihm/pc/part-6/p6c3-ex-g [https://perma.cc/4GB9-MU8R].
See Neely Bardwell, Trump FY 2026 Budget Aims to Slash $900 Million from Indian Health Service, Native News Online (Apr. 19, 2025), https://nativenewsonline.net/health/trump-fy-2026-budget-aims-to-slash-30-to-indian-health-service [https://perma.cc/NXE7-GBTW] (“The proposal would slash nearly 30% from the IHS base funding, end advance appropriations, halt funding for health care and sanitation facility construction, restrict Tribal self-governance opportunities, and cut nearly $900 million in critical services and facility support in FY 2026.”).
See Purchased/Referred Care (PRC) Users Guide, Confederated Tribes of Siletz Indians (2025), https://ctsi.nsn.us/purchased-referred-care-prc-users-guide [https://perma.cc/CJ66-DKS3] (“The availability of funds determines the level of care provided. Towards the end of the fiscal year, funding may be limited.”); Holly E. Cerasano, The Indian Health Service: Barriers to Health Care and Strategies for Improvement, 24 Geo. J. on Poverty L. & Pol’y 421, 435-36 (2017).
See U.S. Gov’t Accountability Off., supra note 9, at 2-3 (“Specifically, IHS and VHA provide health care services directly to eligible beneficiaries. Both programs provide care through agency-administered hospitals and other health care facilities, though IHS funds also pay for care provided by tribally operated facilities . . . . In contrast, Medicare and Medicaid act as public insurers for their beneficiaries . . . .”).
See Gina Kruse, Victor A. Lopez-Carmen, Anpotowin Jensen, Lakotah Hardie & Thomas D. Sequist, The Indian Health Service and American Indian/Alaska Native Health Outcomes, 43 Ann. Rev. Pub. Health 559, 565-66 (2022) (describing improvements in health disparities); see also Tamara Perkins et al., Healing of the Canoe: Preliminary Suicide Prevention Outcomes Among Participating and Non-Participating Youth, 26 Prevention Sci. 740, 744-48 (2025) (detailing the effectiveness of culturally sensitive treatment for suicide prevention); Kamilla L. Venner et al., Culturally Tailored Evidence-Based Substance Use Disorder Treatments Are Efficacious with an American Indian Southwest Tribe: An Open-Label Pilot-Feasibility Randomized Controlled Trial, 116 Addiction 949, 949-50 (2020) (describing the development of culturally sensitive treatment for substance-use disorder).
See Off. of Quality, IHS Innovation Projects Address Social Factors in Health, Indian Health Serv. (2022), https://www.ihs.gov/office-of-quality/ipc/impacts-and-outcomes/innovation-projects [https://perma.cc/T7FN-J8VY]; Mark Carroll et al., Innovation in Indian Healthcare: Using Health Information Technology to Achieve Health Equity for American Indian and Alaska Native Populations, Persps. Health Info. Mgmt. art. no. 1d, at 1-6 (Winter 2011).
See Julia Foutz, Samantha Artiga & Rachel Garfield, The Role of Medicaid in Rural America, Kaiser Fam. Found. (Apr. 25, 2017), https://www.kff.org/medicaid/issue-brief/the-role-of-medicaid-in-rural-america [https://perma.cc/G82Z-YV5Z]; Zachary Levinson, Jamie Godwin & Scott Hulver, Rural Hospitals Face Renewed Financial Challenges, Especially in States That Have Not Expanded Medicaid, Kaiser Fam. Found. (Feb. 23, 2023), https://www.kff.org/health-costs/issue-brief/rural-hospitals-face-renewed-financial-challenges-especially-in-states-that-have-not-expanded-medicaid [https://perma.cc/SEJ3-TEAW].
Academic literature explores how the IHS intersects with population-health concerns and how the IHS represents repeated failures of the federal government to meet its responsibilities to the tribes, but does not compare the IHS to Medicare or Medicaid extensively. For more on how the IHS intersects with public health, see generally Cerasano, supra note 13, which documents IHS actions in the realm of public health; Lucas Trout, Corina Kramer & Lois Fischer, Social Medicine in Practice: Realizing the American Indian and Alaska Native Right to Health, 20 Health & Hum. Rts. J. 19 (2018), which describes the role of the IHS in Alaska Native healthcare; Richard H. Levin, The Indian Health Service Medical Care Program: A Guide for Advocates, 10 Clearinghouse Rev. 681 (1976), which describes strategies for utilizing the IHS to promote health; and Danika Elizabeth Watson, Healthcare Self-Governance, 10 Am. Indian L.J. 1 (2022), which discusses the general intersection between the IHS and public health. For more on the IHS and the trust doctrine, see generally Mark J. Connot, Blue Legs v. United States Bureau of Indian Affairs: An Expansion of BIA Duties Under the Snyder Act, 36 S.D. L. Rev. 382 (1991), which discusses obligations imposed by the trust responsibility; and Lauren E. Schneider, Comment, Trust Betrayed: The Reluctance to Recognize Judicially Enforceable Trust Obligations Under the Indian Health Care Improvement Act (IHCIA), 52 Loy. U. Chi. L.J. 1099 (2021), which describes judicial approaches to enforcing trust obligations in regards to tribal health.
See 42 U.S.C. § 1396-1 (2024) (describing the purpose of Medicaid appropriations); see also Medicaid, Children’s Health Insurance Program, & Basic Health Program Eligibility Levels, Medicaid (2023), https://www.medicaid.gov/medicaid/national-medicaid-chip-program-information/medicaid-childrens-health-insurance-program-basic-health-program-eligibility-levels [https://perma.cc/9UHL-6C97] (providing eligibility levels in each state for key coverage groups).
See 25 U.S.C. § 1603(13) (2024) (defining “Indian” for the purposes of the IHS subchapter); see also Eligibility, Indian Health Serv., https://www.ihs.gov/aboutihs/eligibility [https://perma.cc/5S2P-R9FA] (explaining how and where to find the rules, standards, and procedures that determine whether someone can get care from the IHS).
See infra notes 36-39 and accompanying text; Manatt, Phelps & Phillips, LLP, Medicaid’s Role in Addressing Social Determinants of Health, Robert Wood Johnson Found. (Feb. 1, 2019), https://www.rwjf.org/en/insights/our-research/2019/02/medicaid-s-role-in-addressing-social-determinants-of-health.html [https://perma.cc/HR4J-FVGT]. Both programs serve populations that are disproportionately ethnic and/or racial minorities and are lower income. Both of these characteristics are correlated with lower trust in medicine and the medical system. See Jessica Greene & Sharon K. Long, Racial, Ethnic, and Income-Based Disparities in Health Care-Related Trust, 36 J. Gen. Intern. Med. 1126, 1126 (2021).
See supra notes 10-11 and accompanying text; Fact Sheet: President Biden Touts Historic Support for Indian Country and Transformation of the Nation-to-Nation Relationship with Tribal Nations, White House (Oct. 24, 2024), https://bidenwhitehouse.archives.gov/briefing-room/statements-releases/2024/10/24/fact-sheet-president-biden-touts-historic-support-for-indian-country-and-transformation-of-the-nation-to-nation-relationship-with-tribal-nations [https://perma.cc/5LTX-D8DN].
See Em Luetkemeyer, Lawmakers Say Trump’s Budget Would Put Health Care for Native Americans at Risk, NOTUS (June 5, 2025), https://www.notus.org/congress/trump-budget-proposal-indian-health-services-advance-funds [https://perma.cc/9DZN-V72Y] (“Trump’s budget wishlist would fund IHS at $7.9 billion . . . .”).