Illinois School Districts Receive Boost in Medicaid Funding for School Health Services
June 16, 2025 | Written By: Healthy Schools Campaign
Photo by Allison Shelley/The Verbatim Agency for EDUimages
In the second year of expanded Medicaid billing for school health services, participating Illinois school districts received an additional $23.4 million in federal funding — money that can be used to further increase student access to the healthcare they need.
This tops the nearly $17.8 million of additional funding school districts received in the previous fiscal year, bringing the total amount of new funding over two years to more than $40 million.
Public Consulting Group, the state’s administrative vendor for school health services, announced the billing results and the financial impact on participating school districts in June. The total Medicaid reimbursement for all Illinois school districts in the 2022-23 school year exceeded $232 million.
| The additional school Medicaid funding Illinois received underscores the critical role Medicaid plays in supporting student health — and what’s at risk for students, schools and communities if Congress cuts Medicaid. Check out HSC’s recent webinar on protecting and strengthening school Medicaid programs and a new advocacy guide, developed with Community Catalyst, to learn what you can do to help protect Medicaid. |
The influx of new funds is the result of Illinois allowing school districts to bill Medicaid for a wider range of health services and health providers. The Centers for Medicare and Medicaid Services (CMS) encourages billing Medicaid for all covered physical, behavioral and mental health services provided to all students enrolled in Medicaid. (Previously, billing was allowed only for students with an Individualized Education Plan (IEP), which in Illinois limited reimbursement to just 14% of the 800,000 students enrolled in Medicaid.)
In addition, Illinois shifted to a new reimbursement methodology for determining the actual cost of delivering school health services, which further increases reimbursement for districts. The state received federal approval for these changes in 2023; billing was retroactive to 2021, when Illinois first submitted a state plan amendment.
Illinois has taken additional strides to advance school Medicaid, including forming a working group of the P-20 Council (covering preschool to grade 20, education after college) to increase health services and Medicaid reimbursement for school districts. The Council, which includes state agencies, educational institutions, local schools, elected officials, families and other stakeholders, makes recommendations to the governor, Illinois General Assembly and state agencies.
Learn more about how school Medicaid supports students and schools and the impact proposed cuts would have on school health services, student resources and district funding.
