The amounts that Medicare and Medicaid cover for American Indians are not included in the figures you mentioned. Here’s what the report from the U.S. Commission on Civil Rights (report is found here: http://www.tedna.org/usccr/quietcrisis.pdf) says:

“In tallying its Native American expenditures, HHS does not include funding for which Native Americans compete with other groups, those for which all individuals are eligible, and those that are awarded to states and then passed on to Native communities. As a result, and as noted previously, the amount does not include Medicaid and Medicare benefits received by Native Americans.”

Re the IHS billing Medicaid and Medicare for services–here’s a good paper from the American Journal of Public Health (go here: http://tiny.cc/jGOPK) talking about Medicaid’s role in American Indian health care (a very imperfect system) and possible reforms. The authors make a couple points worth mentioning here: 1) There’s a very high rate of poverty among American Indian communities—this is why they’re eligible for Medicaid in the first place. And 2) Medicaid costs are shared by the government and the states. But Medicaid costs are also increasing faster than state revenue, so some states may decide to close the gap by cutting Medicaid budgets (either by tightening eligibility, or not paying providers). Here’s a solid example from the paper on how this affects the IHS and American Indian health care:

“. . . if a state reduces eligibility for pregnant women from 185% of the federal poverty level to the federal minimum of 133% of the federal poverty level, all AIAN pregnant women in this income range will lose Medicaid eligibility along with all pregnant women who are not American Indians/Alaska Natives. For those being treated at IHS or tribal facilities, the facilities will no longer be able to bill Medicaid for their services. Similarly, if a state decides to reduce or eliminate an optional service such as adult dental care, the IHS or tribal facilities that provide such services to Medicaid beneficiaries will no longer be able to bill the state Medicaid program for these services. In both cases, the state does not save any of its own funds by cutting off payment to the IHS or tribal facilities, because 100% of the Medicaid costs of these services would be paid by the federal government. However, the IHS or tribal facilities will lose the federal Medicaid revenues.”

And regarding patients who receive services at non-IHS clinics: IHS often has contracts with outside facilities to provide care that they aren’t equipped to provide (b/c they don’t have the funding). This paper (http://tiny.cc/Mr7EF), also from the AJPH, goes into it a little bit. And an interesting thing to note about this contract care is that IHS often pays more for it then they would pay in-house. And in some rural areas, the lack of competition means IHS may end up paying a lot more. (Though I should note that IHS is the payer of last resort when it comes to contract care (http://info.ihs.gov/CHS.asp) —again, b/c funding is so tight.)

My question is: If the federal government fully funded the IHS, what would happen to the amounts spent on Medicare and Medicaid for American Indians?

Hold on now. I question this figure. Does that include the money spent on Native Americans by Medicare and Medicaid when patients are referred out for care elsewhere? When Eagle Butte, transport a pregnant woman by air to Rapid City, Medicaiid foots the bill for that $100K transport and hospitalization. That is probably not included in the figure. When a Medicare enrolled Native patient shows up at an ER off Rez for emergency care, who pays the majority of the bill? Medicare. How about all the money Medicare and Medicaid are spending paying non-IHS dialysis providers? IHS facilities are billing PI, Medicare and Medicaid for much of the services. Is that included in the sum?

I doubt that they are tallying all the money spent. This is very sick population. I am skeptical that the per capita expenditures on NA’s is half of what the Canadians spend. I don’t buy it.