Mental health care for needy to plummet if Medicaid is cut

By Richard E. Gill Assistant Editor
July 1, 2005 - Last updated: May 31, 2011

The poor will be the first to fall through the cracks of mental health care if a proposed $10 billion cut in Medicaid passes. Pitfalls that await them are jail, prison and an increase in the number of suicides.

“The problem is that these people will continue to need services and so they will essentially fall through the cracks in the mental health service delivery system and wind up in other kinds of settings, most likely, and unfortunately, in jails and prisons,” warned Judy Stange, Ph.D., senior director of research and services for the National Mental Health Association. Regrettably, she also believes the number of suicides will increase.

Since mental health care is often the first service axed in patient care, Stange said, “The issue is that psychological services might not be covered at all.” And, she added, “That poses serious implications for psychologists.”

In May, Health and Human Services Secretary Michael Leavitt established a commission to recommend ways to reduce Medicaid spending by $10 billion over the next five years. Medicaid is the largest source of financing for mental health care in this country and enables millions of low-income people to access critically needed mental health services.

“For people who are poor, unemployed or marginally employed and in need of mental health care services, many of the services that are now available will no longer be there,” said Stange, a clinical psychologist.

“The poor do not have the ability to step outside the system to get help. Resources in the private sector are virtually non-existent. The dominant provider for services to that population is Medicaid,” she added.

Stange said psychologists provide substantial care in rehabilitative and assistance programs and in direct treatment and predicts the reduction in mental health care dollars will have significant impact on the profession. States have increased flexibility in providing optional services and mental health care will decrease or be eliminated.

Eric Garfinkel, Ph.D., CEO of Psychassociates Group and Early Childhood Associates, agreed.

“Many states have no coverage for psychological services to adults. Others are at such a low level that cost of service delivery, documentation and billing exceed the fees paid by the state. In New York and Pennsylvania the fee for one hour of psychiatric service is $36, and Pennsylvania has no coverage for adults,” he said.

Garfinkel, who chairs the New York State Psychological Association’s Insurance Committee and is a member of the Pennsylvania Psychological Association’s Insurance Committee, said Medicaid issues are difficult to address on the national level because there is so much inconsistency in legislation and policies from state to state.

Often, psychological services are considered “optional” under federal Medicaid law. “This means states have the option of covering or refusing to cover (mental health) as part of their Medicaid program,” he said.

“We tend to think of Medicaid as being for other people, overlooking the reality that some time or another many of us are likely to depend on Medicaid for some aspect of our own health care,” Garfinkel said.

“Limiting the activities of psychological services is an extremely shortsighted and inefficient attempt at cost savings. There is really nothing optional about people with mental health needs,” he continued.

“Failure to provide timely, accessible and appropriate behavioral health care costs society more than it would ever hope to save. It costs more dollars and it costs more lives.”

Said Garfinkel, “We need to be active as psychologists on both the federal and state levels to ensure that the neediest and most vulnerable among us are able to receive the care they desperately need.”

Garfinkel made it clear that psychologists would do well to lobby and advocate on behalf of Medicaid recipients in need of mental health care services.

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