Outlook for Federal Mental Health Policy in the 115th Congress

Psychiatric TimesVol 34 No 2
Volume 34
Issue 2

Will the new Administration disrupt mental health coverage in this country?

[[{"type":"media","view_mode":"media_crop","fid":"56787","attributes":{"alt":"Shutterstock.com","class":"media-image media-image-right","id":"media_crop_3200903946140","media_crop_h":"0","media_crop_image_style":"-1","media_crop_instance":"7143","media_crop_rotate":"0","media_crop_scale_h":"208","media_crop_scale_w":"200","media_crop_w":"0","media_crop_x":"0","media_crop_y":"0","style":"font-size: 13.008px; float: right;","title":" ","typeof":"foaf:Image"}}]]America’s health care community awoke to a brave new world on November 9, 2016. Republicans will control Congress and the White House for the first time since 2006 -the first time since the passage of the Affordable Care Act (ACA) -and all signs suggest that they have big plans to shake up America’s health care system.

Despite a sparse health-related agenda, President Donald Trump’s platform did address the “need to reform our mental health programs and institutions in this country.” While alluding to the mental health provisions included in the 21st Century Cures Act signed into law by President Obama in December, the prioritization of mental health in the new President’s agenda gives the mental health community an opportunity to discuss policy changes with the Administration in 2017. Likewise, Republicans have openly discussed their desire to strengthen America’s mental health system as a response to the spate of gun massacres across the country. The enactment of the 21st Century Cures Act and the stated desire to further strengthen mental health supports suggest that mental health may continue to be a priority under Republican control.

That being said, a key priority for the new Congress and Administration-repealing the ACA-will have a significant impact on mental health coverage in this country. In addition, promises to increase military spending while cutting domestic social spending (including the Department of Health and Human Services) and efforts to reform and reduce funding for Medicaid will put mental health and substance use services out of reach for many Americans who need them most. In this article, we attempt to balance these issues and offer some perspective about the future of federal health care policy in 2017.

Repealing the ACA

The number of uninsured Americans has dropped significantly thanks to the ACA (aka ObamaCare), which gave states the ability to expand Medicaid coverage to everyone below a threshold of 138% of the federal poverty limit. In states that expanded Medicaid coverage, rates of uninsured adults have plummeted -and today nearly 95% of all children in this country are insured.

Medicaid is the single largest payer in the US for behavioral health services, including mental health and substance use services. All state Medicaid programs offer a behavioral health services package in a variety of settings, and all states cover prescription drugs. Children have an additional protection in the Early, Periodic, Screening, Diagnosis and Treatment benefit that guarantees coverage of all necessary health and behavioral health services to all children. What is more, the Mental Health Parity and Addiction Equity Act signed into law in 2008 and its subsequent expansion into Medicaid (including managed care) and the Children’s Health Insurance Program (CHIP) strengthen the entitlement to a comprehensive package of mental health services and treatments.

This comprehensive behavioral health benefit package removes a significant financial hurdle for Medicaid enrollees who access services. This is particularly true for low- income individuals for whom the cost of care represents a persistent and significant barrier to receiving needed behavioral health care services.

Repealing the ACA will seriously narrow the Medicaid program and could include restrictions on eligibility and limits on federal funding, turning back the significant progress that has been made. For example, policies could disallow states to expand their Medicaid program, require states to return to their pre-ACA eligibility levels, or limit federal funding for beneficiaries. These types of policies could force expansion states to eliminate coverage for millions of low-income beneficiaries or to finance coverage of the expansion populations entirely with state funds (a significant cost shift to state budgets).

Medicaid reform

In addition to repealing the Medicaid expansion of the ACA, Congressional leaders and President Trump have identified broad Medicaid reform as a top legislative priority. Currently, Medicaid is structured as an entitlement program; the federal government reimburses states for a set percentage of total spending on health care costs for Medicaid beneficiaries. The guarantee of a consistent and predictable match of federal funding allows states significant flexibility to serve the unique needs of their state, and to innovate and modernize the program with new technologies and new drugs. It also allows states to respond efficiently to emerging public health crises (eg, the opioid epidemic).

Medicaid reform proposals such as those included in Speaker Paul Ryan’s “A Better Way” initiative would end the federal guarantee of funding and cap the amount of funds that the federal government reimburses a state for its health care spending. With Ryan’s proposal, states would choose either an annual defined lump sum payment (ie, a block grant) or a per capita “allotment” per enrollee. States would be entirely responsible for all Medicaid spending above the federal allotments.

With shrinking federal assistance, many are concerned that states will find it difficult to maintain current commitments to Medicaid enrollees and have few funds available to substitute lost federal revenue. To replace lost federal funds, states could increase the share of state funding to cover current commitment, cut eligibility and limit coverage under Medicaid, reduce provider reimbursement rates, or scale back benefits. Given the significance that Medicaid has in providing coverage to millions of Americans with mental illness, ill-considered Medicaid reform efforts could cause serious damage to America’s mental health safety net.

Domestic social spending cuts

Republicans’ support for cutting domestic social spending, including funds for programs in the Department of Health and Human Services, adds another layer of uncertainty about the impact of policy changes on mental health services for low-income and medically needy Americans.

The enactment in December of the Cures Act, which included significant reforms to federal mental health policy, will require the development of new regulations by the Trump Administration. Derived from the Helping Families in Mental Health Crisis Act, this bill enjoyed bipartisan support in Congress and received widespread applause from the mental health community. It is hoped that the numerous changes included in the legislation -ranging from the creation of a new Assistant Secretary in charge of mental health and substance abuse disorders to requiring Medicaid health plans to pay for short-term inpatient mental health stays -will bring added coordination, attention, and reforms to America’s mental health system. Advocates and providers will need to be vigilant throughout the regulatory process to ensure that the wishes of Congress are implemented.

While the Cures legislation authorized more than $1 billion in additional funding for federal mental health and substance abuse programs, Congress must fund these programs through the contentious annual appropriations process. With Republicans vowing to cut domestic spending in favor of defense spending, mental health advocates may have to resort to extreme pressure to ensure that these programs are adequately funded. Fortunately, House Appropriations Committee Chairman Hal Rogers said, on passage of the Cures Act, “I am committed to working with my colleagues in both the House and the Senate to follow through on the funding to make the promise of this legislation a reality.” That is a very good sign for future funding.

Other issues affecting mental health

After the enactment of the Cures Act and the focus on funding these programs, Congress is likely to address other issues that will affect the mental health community. Congress must act on the expiration of CHIP funding and the expiration of ACA funding for community health centers and the National Health Service Corps (major providers of mental health services) by September. Likewise, a bipartisan consensus in Congress has emerged toward the increased use of telehealth technology to provide services, including mental and behavioral health, to Medicare beneficiaries.

Republicans and Democrats in Congress have also called for reform in the Department of Veterans’ Affairs, which provides significant assistance to veterans who have mental health issues. Finally, Congress will act to reauthorize the Prescription Drug User Fee Act, which will help ensure that prescription medications that target mental diagnoses can continue to efficiently enter the market. In short, Congress is likely to be very busy in 2017 addressing a wide variety of programs that touch America’s mental health infrastructure.

2017 will be a year of considerable change in health care policy. Federal policy changes that result in reduced coverage of behavioral health services could exacerbate unmet or delayed care, particularly in low-income communities. Dramatic federal budget cuts could result in downward pressure on already too low provider fees, further restricting access to care. Simultaneously, Congressional recognition of the need to increase access to mental health services and to support and develop the mental health workforce presents an opportunity to advance this important agenda.

Clinicians can play an important role in influencing this debate by highlighting the impact of unmet needs, and the positive role that comprehensive, affordable behavioral health services have on a patient, his or her family, and the community. In partnership with patients, clinicians must speak to the burden of mental health disorders and why they should be given priority attention in Congress and the new Administration.


Chris Koppen is President of Avancer Health Policy based in Alexandria, VA. Lena O’Rourke is President of O’Rourke Health Policy Strategies based in Arlington, VA. Both are experts in health care policy.

The authors report no conflicts of interest concerning the subject matter of this article.

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