Severe State and Federal Funding Shortfalls Likely for Local Mental Health Programs

A political tsunami threatens access to mental health care for individuals who depend on community programs. States are axing Medicaid recipients and/or reducing Medicaid funding to community mental health centers. Meanwhile, Republicans in Congress are intent on budget cuts that would make major reductions to the federal mental health block grant that supplements state programs beyond state Medicaid funding.

Chuck Ingoglia, MSW, vice president, public policy, National Council for Community Behavioral Healthcare, explained that Medicaid funds 50% of outpatient mental health care provided in total-in local, state, federal, and private-pay programs-in the United States.

In Arizona, for example, Governor Janice Brewer has announced that she will eliminate 280,000 Medicaid recipients from the program. Perhaps 140,000 of those adults and children are receiving some form of out-patient psychiatric care.

Other Medicaid recipients around the country have been and will be losing access to psychiatrists and other mental health providers because of state Medicaid funding cuts occasioned by the lingering results of the 2008-2009 recession. On February 16, 2011, Kevin Martone, deputy commissioner of the New Jersey division of mental health and addiction services, keynoted a congressional staff briefing in Washington. He noted that states have been forced to cut mental health agency budgets by a combined total of nearly $2.2 billion over the past 3 fiscal years. “Many states have been forced to reduce funding for a wide array of community-based interventions, including crisis services, targeted case management, prescription medications, and outpatient clinics,” he said. “These services are at the heart of every public mental health system in the country.”

Martone was in Washington to help build congressional support for President Obama’s proposed fiscal 2012 budget for the Substance Abuse and Mental Health Services Administration (SAMHSA), which, next to Medicaid, is the second largest federal source of mental health funding. SAMHSA’s main contribution in that regard is its community mental health block grant program. That money is distributed to states on a formula basis, and the states then divvy their portion up among their cities and counties. In fiscal 2012, beginning October 1, 2011, an increase from $420.8 million in fiscal 2011 to $434.7 million is proposed.

Congress, however, has not yet approved a fiscal 2011 budget. It has been passing a series of continuing resolutions that have kept all federal 2011 budgets at 2010 levels. For the mental health block grant program, that is $420.8 million-the same level Obama has proposed for 2011.

Congress has delayed passing a 2011 budget because Republicans want to make reductions across the board in discretionary programs totaling $61 billion below 2010 levels. In the Continuing Resolution (H.R. 1) the House passed by a vote of 235 to 189 on February 19, 2011, the SAMHSA budget for fiscal 2011 was cut by $200 million below the 2010 budget of $3.43 billion. There was an additional cut of $2.9 million for mental health programs of regional and national significance, a catchall category that funds a variety of local mental health programs. H.R. 1 did not prescribe how SAMHSA should apportion that $200 million in cuts. But mental health lobbyists believe that most, if not all, of that $200 million would be cut from the mental health ($420 million) and substance abuse ($1.45 billion) block grants, probably proportionally.

Two things seem certain at this point. When Congress finally passes a 2011 budget for SAMHSA, there will be a significant cut in mental health block grants below 2010 levels. James K. Finley, senior asso-ciate government relations, National Association of Social Workers, explained, “The cuts under discussion now would certainly impact SAMHSA activities. If H.R. 1 is ultimately passed, SAMHSA would take a 7% overall cut since last year. There is no chance that Obama’s SAMHSA budget request for ’12 will be enacted.” So the $14 million increase to the $420 million Obama proposed for fiscal 2012 is dead.

The only question is whether Congress will cut the mental health block grant again, in 2012-and by how much. Ingoglia explained that Sen Debbie Stabenow (D-Mich) planned to lead an effort in the Senate to ward off severe cuts to the mental health block grant program. He noted, however, that given the political pressure to cut the federal budget deficit, the debate over SAMHSA spending and spending for other discretionary programs-whether those be food stamps or home heating subsidies for the poor-will “not be about if we cut, it will be about how much we cut, and both Republicans and Democrats will support some level of reductions in these programs.”

Very doubtful, too, is funding for the new $90 million program for state mental health prevention grants the President proposed for 2012. According to Ingoglia, that initiative is meant to run parallel to the Accountable Care Act’s (that was the controversial health care reform bill passed in 2010) programs dedicated to upgrading primary care prevention services.