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TISA review committee hears TDOE estimate: adding Medicaid‑free students could cost about $233 million
Summary
TDOE told the TISA review committee that including Medicaid‑free students in Tennessee's "economically disadvantaged" definition would add roughly 120,000 students and cost about $233 million annually, with roughly 70% of that borne by the state and 30% by local districts; members pressed for modeling, pilots and protections against funding volatility.
The Tennessee TISA review committee heard on the record that adding students identified through TennCare (Medicaid) to the state's legally defined economically disadvantaged (ED) group would substantially increase counts and funding needs.
Karen Burkholder, director of data strategy at the Tennessee Department of Education, told the committee the ED definition "has remained constant over the last 10 years" and does not currently include students coded as Medicaid free or Medicaid reduced. Under TISA, ED students receive a 25% weight of the base funding amount; for fiscal year 2027 that equaled roughly $1,800 per ED student.
Burkholder said the department's analysis, using district‑reported data and FY2027 base funding assumptions, estimated that adding Medicaid‑free students would increase the ED population by about 120,000 and generate an approximate funding need of $233 million. "That amount would be broken down to about 70% covered by the state or about $163 million with 30% covered by locals at about $70 million," she said.
Committee members pressed for detail on why ED counts fell by roughly 50,000 over recent years. Presenters and some members pointed to declines in SNAP participation, timing and reporting differences in direct certification, and federal policy changes that affected benefit enrollment. Burkholder said Tennessee has used temporary hold‑harmless protections in recent appropriations to blunt the immediate fiscal shock: districts were funded on higher historical average daily membership (ADM) in FY25 and received partial or full coverage of gaps in later years.
Members also discussed tradeoffs and potential approaches. Several suggested piloting an expansion that adds Medicaid students but reduces the ED weight so the denominator grows while total state expenditures remain manageable. Others urged modeling alternative scenarios, including the effect of ending hold‑harmless protections, and stressed that any change could shift outcomes unevenly across districts.
No formal votes were taken. The committee agreed to ask TDOE and the state's fiscal office to model several options and to include cost estimates with priority recommendations that the review committee will submit to finance officials this summer.
