In a recent ruling, the US Supreme Court decided that when Native American tribes administer healthcare through their own programs, the Department of Health and Human Services’ Indian Health Service (IHS) must cover associated operational costs. This case was brought forth by the San Carlos Apache Tribe and the Northern Arapaho Tribe, both of which opted to offer healthcare independently of the IHS within the last decade.
The Indian Health Service traditionally administers healthcare programs within tribes through Medicare, Medicaid, or private insurance, covering services like ambulances, dental clinics, and hospitals. Tribes can either receive funds through the IHS or operate their own healthcare services. In the latter case, tribes enter into self-determination contracts to ensure the services previously provided by IHS are now managed by the tribe.
Funding provided by Congress should “not be less” than what the Department of Health and Human Services would have spent on these programs. However, tribes still incur additional costs not covered by IHS, often referred to as “contract support costs,” which can be used to bridge funding gaps but still leave shortfalls in operation budgets. For example, tribes need to independently fund insurance, auditing, and financial services, which IHS can otherwise delegate to the Office of Personnel Management.
The Supreme Court noted that “self-determination contracts of the San Carlos Apache Tribe and Northern Arapaho Tribe require them to collect and spend program income to further the functions, services, activities, and programs transferred to them from IHS. When the Tribes do so and incur administrative costs, ISDA requires IHS to pay those support costs.”
The Department of Health and Human Services suggested transforming the IHS budget from discretionary (requiring annual re-approval) to mandatory funding within the presidential budget for fiscal year 2025, ensuring sufficient appropriations for 2026.
This ruling, aimed at equalizing funding between IHS-run and tribally run healthcare programs, will apply to all tribes nationwide. For fiscal year 2025, the IHS budget was increased by 16 percent, translating to an additional $1.1 billion from the fiscal year 2023 budget.
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