Jan 7, 2013

The political economy of Medicaid and mental health

Uniform levels of good care for people with mental health issues will only happen if America federalizes mental health care, and fixes Medicaid rules to make mental health services economically feasible for healthcare providers. In essence, this means restoring Community Mental Health Center funding, the mental health funding stream created by the Kennedy Administration, expanded by the Carter Administration and wiped out by Ronald Reagan.

We have Medicaid, but Medicaid is not a uniform system. The quality of Medicaid depends  on the extent to which individual states are willing to impose taxes to pay for services. In states with a high degree of income disparity, tax rates are kept low in order to benefit the most powerful residents, and the poor – which includes most people with mental illness – are left to suffer.

Consider, for example, Texas, which has decided not to participate in the Affordable Care Act’s Medicaid expansion.
  • 16.5% of Texans live in poverty
  • 25% of Texas children live in poverty
  • 24.8% of Texans do not have health insurance
  • Texas ranks 1st among states in the percentage of the population that is uninsured.
  • Texas ranks last in per capita mental health spending.
Because Texas will not be participating in Medicaid expansion, even parents of young children (the largest category of "medically needy" Texans) will continue to have less access to mental health services than parents elsewhere in the US.  Parents of young children must be "super poor" to qualify for Texas Medicaid. According to a 2011 report from the Mental Health Policy Analysis Collaborative,
The 2009 income threshold for jobless parents with dependent children applying for Texas Medicaid is 13 percent of Federal Poverty Level (FPL), or $2,256 [per year].Working parents can earn up to 27 percent of FPL, or $4,824.These income thresholds are less generous than the US average of 41 percent and 68 percent, respectively.
In Texas and other states that do not maximize access to Medicaid,  what ordinary people who need mental health services get is crisis-only care in hospital emergency rooms.

“If someone shows up with an acute mental health crisis, you get in the door but when your crisis is over you go on a waiting list,” NAMI Texas Executive Robin Peyson said in a 2011 interview. “You wouldn’t put people with diabetes on a waiting list, they’ll die.”

A separate Medicaid reimbursement rule restricts access to inpatient care even for Medicaid-eligible people who need that level of service. According to the Mental Health Policy Analysis Collaborative,
Patients can only be admitted (with payment) to general hospitals that have psychiatric care. This type of facility is very limited in Houston as most psychiatric beds are located in free-standing psychiatric facilities. This limits access for indigent patients and causes financial loss for those facilities treating these patients…As a result of this occurrence, many facilities have reduced their bed capacity so as to not have to take on this additional population without reimbursement.
Medicaid’s so-called Institutions for Mental Disease rule limits access to inpatient care not only in Texas, but throughout the United States.


Study: Texas Ranks Last in Mental Health Spending. (2011). The Texas Tribune. Downloaded 1/7/13 from http://www.texastribune.org/2011/11/10/texas-ranks-50th-mental-health-spending/

Mental Health Policy Analysis Collaborative. (2011). Medicaid in Harris County A Mental Health Perspective. Houston, TX: Author. Downloaded 1/7/13 from http://med.uth.tmc.edu/departments/psychiatry/mentalhealthanalysis/medicaid.pdf

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