Much of the news and media reporting surrounding President Trump’s “One Big Beautiful Bill” has focused on provisions around adult work requirements for Medicaid and government assistance programs. Meanwhile, education advocates are raising concerns about another, less visible impact: the potential disruption of Medicaid-funded health services in public schools.
While Medicaid is often discussed as a health care program, its role in K-12 education has become increasingly important in the past ten years. For many families, school-provided services from speech therapy to special education evaluations are funded through Medicaid and make a tangible difference in students’ well-being and readiness to learn. The program plays a substantial role in school-based health services by funding a range of school-based services, including physical, occupational, and speech therapy; behavioral and mental health counseling; vision and dental screenings; and support from school nurses and social workers.
Since a 1988 amendment to the Social Security Act, public schools have been allowed to seek Medicaid reimbursement for services provided to eligible students under the Individuals with Disabilities Education Act (IDEA). A 2014 federal clarification expanded this to allow reimbursement for a broader range of services for all Medicaid-enrolled students, not just students with individualized education plans (IEPs).
These policy changes, education experts say, created a crucial funding mechanism for schools to fund and staff necessary services, particularly in school districts serving low-income communities.
“One in three individuals covered by Medicaid is a school-aged child,” says Anne Dwyer, Associate Research Professor at Georgetown University’s Center for Children and Families (CCF). “As states scramble to deal with these budget pressures, they’ll be forced to make hard decisions, and for most states education is often where those cuts start.”
According to the Congressional Budget Office, the new legislation could reduce federal Medicaid support to states by more than $900 billion over the next decade. With states bearing more financial responsibility and facing new administrative requirements, experts anticipate downstream effects on school budgets.
“Medicaid is the fourth-largest source of federal funding for K-12 schools,” says Chantal Hinds, a fellow at progressive independent think tank The Century Foundation and former special education attorney. “If schools lose access to that funding, it can limit the support students receive, especially those entitled to services under federal law.”
Some states have expanded their school-based Medicaid programs in recent years. In Michigan, for example, Medicaid expansion allowed for a 93 percent increase in behavioral health providers and a 52 percent increase in school nurses in participating school districts, according to The Century Foundation.
“Optional programs like school-based mental health services are often the first to go under state budget stress,” Dwyer explains. “And unfortunately, that’s where we’ve seen some of the most meaningful gains for children in recent years.”
Longitudinal, nationally representative studies have found that poor child health significantly reduces both learning time and academic performance, highlighting that investments in health directly support educational success. In 2024, analysis of the kindergarten cohort of the Early Childhood Longitudinal Study revealed that Medicaid expansions for parents led to roughly a 2 percent improvement in children’s reading scores, driven by healthier home environments and more time spent reading at home.
Children most likely to be affected include those from low-income families, students with disabilities, and children in rural communities—many of whom rely on schools as their primary point of access to health services. Research shows that nearly 40 percent of children living in rural areas are covered by Medicaid or the Children’s Health Insurance Program (CHIP). A 2017 Georgetown CCF report also noted that rural children are 24 percent more likely to depend on these programs than their urban peers. With fewer private providers available, many rural counties are designated medical deserts.
In these communities, public schools often serve as the only accessible site for services such as counseling, therapy, and vision and dental screenings. The same is true of schools funded through Title I, a federal program that provides additional funding to school districts serving high numbers of students from low-income families.
“Schools often act as a hub for wraparound support for children and families,” says Hinds. “Particularly in Title I districts, school-based health services can be the most consistent form of care a child receives.”
To maintain these services and the workforce that provides them, school districts and states will need to explore alternative funding strategies and advocacy efforts to replace federal cuts. This may include reallocating state education budgets, seeking supplemental funding from local governments or philanthropic partners, and forging stronger partnerships with local health agencies.
Some states may find it especially difficult to absorb the additional financial burden. States like Mississippi, West Virginia, and Arkansas, where a large percentage of children rely on Medicaid and state budgets are already stretched, could be forced to scale back services or delay expansion efforts.
In Mississippi, approximately 50 percent of children are enrolled in Medicaid or CHIP (the latter of which provides health insurance to children whose families’ incomes are too high to qualify for Medicaid), yet the state still ranks among the lowest in the nation for per-pupil education spending.
Similarly, in West Virginia—where about 47 percent of children receive Medicaid or CHIP, and federal funding makes up roughly 82 percent of the $5.4 billion Medicaid budget—the state is projecting a budget shortfall by 2027, in part due to reductions in federal health care support.
“States with high Medicaid enrollment but limited fiscal flexibility are going to be hit the hardest,” says Kayla Patrick, a senior fellow at The Century Foundation. “That creates uneven impacts across the country and exacerbates existing disparities.”
One of the more contentious elements of the new law is the introduction of work requirements for certain adult Medicaid beneficiaries. While children themselves are not subject to these requirements, experts say the indirect effects could be significant.
“When parents lose Medicaid, their children are more likely to lose coverage as well,” says Dwyer. “That means schools may no longer be able to bill for services that were previously reimbursable, even when those services are legally mandated.”
According to The Center for American Progress, past attempts to implement work requirements in states like Arkansas and Georgia have led to drops in coverage due to administrative hurdles rather than ineligibility. As a result, even eligible families may lose access to benefits. In reality, these bureaucratic barriers often translate to something as simple as a missed form, a change of address, or a missed deadline—issues that have caused even eligible families to lose coverage. As a result, people were removed from Medicaid not because they failed to meet the requirements, but because they got caught in the red tape.
Dwyer also points out that these Medicaid cuts are not occurring in isolation—they’re also affecting the federal government’s Supplemental Nutrition Assistance Program (SNAP) and Temporary Assistance for Needy Families (TNF) programs.
“This isn’t just about one program,” Dwyer says. “These cuts come alongside other safety net rollbacks, and that compounds the pressure on families and state budgets.”
Under the new legislation, work requirements for SNAP have expanded to apply to adults up to age sixty-four, including many single parents. The Congressional Budget Office estimates that 3.2 million adults could lose benefits each month, including nearly 800,000 parents of school-age children. In addition, states will now be responsible for up to 25 percent of SNAP benefit costs and 75 percent of administrative costs, further straining budgets already managing major Medicaid reductions.
“The cumulative effect could be significant,” Dwyer continued, “especially for children in low-income communities who rely on multiple programs for healthcare, food security, basic economic stability.”
Many of the legislation’s provisions will phase in gradually, with the most significant Medicaid-related changes such as quarterly eligibility reviews taking effect in December 2026, followed by the new Medicaid work requirements and shortened retroactive coverage periods on January 1, 2027. Patrick and Hinds recommend that state education agencies use this lead time to expand their school based Medicaid billing frameworks where possible, develop contingency plans to maintain essential health and special education services, and begin proactive communication with families well before the late 2026 to early 2027 rollout of these changes.
“There’s an opportunity for proactive planning,” says Patrick. “Schools can play a role in helping families navigate the new requirements and maintain their children’s coverage.”
Still, the long-term effects remain uncertain. Studies have long shown that when children’s health improves, so do their educational outcomes. Better access to healthcare is linked to higher attendance, improved test scores, and stronger long term academic achievement. As these policy shifts unfold, families and schools may face new challenges in maintaining the healthcare supports that have long underpinned student learning and development.
“Helping families understand how these systems intersect is key,” says Hinds. “This isn’t just a health issue, it’s an education issue too.”