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Please Read—Concerning Imminent Threat to Medicaid: | DDadvocates.com

July 25 , 2011

Greetings and Good afternoon:

I wanted to take this opportunity to send to all of you an important communication that contains information regarding the current threats to the Medicaid and Medicare programs.  I also want to make certain that I clearly state that the purpose of this email communication is to inform you and those that we serve as to the potential for monumental and devastating consequences to the public mental health system in Allegan County and in Michigan if the budget cuts that are being proposed by the United States Congress are realized .  Therefore, the purpose of this email message is as follows:  To educate staff as to the impact that the reduction in funding for the Medicaid program will have upon the individuals that are served by ACCMHS .

As some of you may know,  I  was in Washington, DC for  four days last week wherein I was privileged to participate in Hill Day, which is an effort that is sponsoredby the National Council for Community Behavioral Healthcare.  For those of you who are not familiar with the National Council, it is a national trade association for providers of community mental health and addiction services in the United States. The National Council advocates for those that we serve in the public mental health system and it also advocates for our system. The purpose of Hill Day is to provide ongoing education to legislators as to the value that the public mental health programs bring to their local communities.   During my visits  with  a variety of legislators  on Capitol Hill over the past few days, which  included  Senator Levin, Senator Stabenow, Rep. Upton, Rep. Amash and Rep. Huizenga, it became clear to me that we need to do more to help our legislators to understand more about the persons that community mental health serves and about the types of programs that community mental health provides.

In addition to the Hill visits, we were given the opportunity to listen to some speakers who are well-versed in the areas of public policy  (as it impacts persons with disabilities and the poor) including Kelly Whitener from the Senate Finance Committee; Judy Solomon and Ellen Nissenbaum, from the Centers for Budget and Public Policy; and former Wisconsin congressman David Obey.   It was of interest to note that Kelly Whitener stated that ”no one knows” how all of the politics of raising the debt ceiling and reducing funding for Medicaid and Medicare will eventually “turn out” and Representative David Obey, who had been a member of the House of Representatives for over 40 years, stated that he ’quit politics because he grew tired of fighting for people who would not fight for themselves’.

All of these individuals, along with the public policy staff of the National Council, have asserted the following:

1.  The cuts to Medicaid that are being proposed (the dollar amount ranges from 80 billion to potentially 700 billion for both Medicare and Medicaid) will be devastating to those that are participants in the program.  If block grants are adopted, there will be a finite amount of dollars given to each state and if the state overspends the dollars on care, then it will be the state’s responsibility to assume the risk.   In Michigan, the public mental health system is funded approximately 90% by Medicaid dollars so any significant cut to Medicaid is going to be a blow to the system.

2.      The cuts will result in cost shifting to the states for the following reason:  In 2014, when the Medicaid expansion that is part of the Affordable Care Act is supposed to occur, the Federal government was supposed to be assuming 100% of the cost for those individuals that will be newly eligible for Medicaid; however, if some of the provisions of the plan that members of the House are creating is adopted, the Federal government will not assume 100% of the cost and there will be a blended rate.  The blended rate will be a challenge for many states because there is no incentive to enroll new eligibles into Medicaid and some states will not be able to afford the increased match and the increase in the number of eligibles, which is proposed to be approximately 16 million added to the rolls. In short, a blended rate is a “blending” of the amount of Federal Match Assistance that is being provided to current Medicaid enrollees with the amount of Federal Match Assistance that will be given as a result of the Medicaid expansion and states will be paying a much larger share.  It is not certain how states will respond to this increase.

3.  The second major proposal is a change in the provider taxes that many states charge in order to pay their share of the federal match to participate in the Medicaid program.  At this time, nineteen different entities can be taxed including hospitals, physicians, etcetera. The proposal is that states will no longer be able to use the provider tax dollars to fund their federal match for Medicaid and this will be devastating, particularly for the state of Michigan, who has become reliant upon the provider tax.

4.  The proposed cuts to Medicaid have the potential to impact the current Medicaid waivers in Michigan, if they are deep enough.  Michigan currently has the 1915(c) and 1915(b) waivers which, in the public mental health system, allow ACCMHS and others to provide for a variety of supports that empowers consumers to live more independently in the community. Some of these services include community living supports (which comprises almost half of the ACCMHS budget); respite services; supported employment and job development; housing assistance; specialized residential services; and for those with the Habilitation Supports Waiver (HAB), it provides funding for environmental modifications such as wheelchair ramps, roll-in showers and modified bathrooms and enhanced pharmacy, just to name a few.  If Medicaid is cut deeply, then CMHSPs such as ACCMHS will not be able to afford to place individuals in the community and will be forced to place many folks who live independently with supports in a more restrictive setting.  For those individuals who are currently in need of 24 hour per day supports, it may be necessary to seek placement in a state facility if the funds are not available.  In Michigan, CMHSPs use state general funds to pay for state facilities and, if Medicaid funds are not available, many CMHSPs will have not choice but to place individuals in a more restrictive setting.  For persons with developmental disabilities this is more complex because the last developmental center in Michigan closed in 2009 and all that remains are state psychiatric facilities such as Kalamazoo Psychiatric Hospital, Caro Psychiatric Hospital, the Forensic Center, Walter Reuther and Hawthorn Center for children.

As a result, these proposed cuts have the potential to:

  • Reduce the numbers of individuals that can be served by the public mental health system so that only the most severe individuals will be able to receive care;
  • Force persons that have been living in independent settings in the community into more restrictive settings such as Adult Foster Care homes or possibly State Facilities and this situation will become unmanageable because there are only five State Facilities left in Michigan;
  • Cost shift the burden for federal matching dollars to the states, who will be assuming a greater amount of risk for the provision of services; some states will not be able to absorb the increase in their state match and will not be able to continue to participate in the Medicaid Program;
  • Threaten the Medicaid expansion that is going to occur in 2014 as a result of the Affordable Care Act;
  • Cause the public mental health system in Michigan to go backward in terms of its ability to support Persons with Disabilities in the community and this will mean less community integration, less independence and a potential return to the days when persons with disabilities were warehoused in large state institutions such as Developmental Centers (often called schools in Michigan) and State Psychiatric Facilities because there will not be the funding available to support Persons with Disabilities in the least restrictive setting.

Included in this email is a link to the National Council’s web site that provides more explanation as to the nature of the proposed Medicaid cuts:


Additionally, the National Council has an Action Alert on its web site that will assist  citizens in expressing  their  opinions to  their  member of Congress.  (See ‘Urge your Legislator to protect Medicaide’  http://www.thenationalcouncil.org/)

We will be monitoring this situation carefully as it moves through the legislative process.

Be well.


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