GOP Governors request ability to restrict Medicaid eligibility

This weekend’s shooting tragedy of Rep. Gabrielle Giffords (D-AZ) and her colleagues and constituents in Arizona shocks us all. The accused assailant isn’t speaking, but pundits are already assigning blame for his actions. The sheriff in Tucson faults the right-wing rhetoric. Others assign political motives, such as the lax gun laws, Giffords’s support for the health reform legislation, or her denunciation Arizona Medicaid reduction in transplant benefits for the gunman’s rampage. (I posted about the Arizona’s decision to limit transplants last month.)

Sadly, I think the event was simply a horrible act of mentally ill individual.

It is hard to say whether access to mental health services to address the attacker’s paranoia and drug use would have prevented the event. However, restricting eligibility for Medicaid would certainly reduce the availability to mental health services to many poor and disabled people without insurance. But, limiting eligibility to Medicaid is what Republican Governors of 33 states want. In a wrote a letter to President Obama on January 7, the GOP governors requested the ability to reduce eligibility for Medicaid in order “responsibly manage our state budgets on behalf of our citizens.”

According to the new federal health reform law, states cannot lower their eligibility thresholds or implement barriers to enrollment in Medicaid or the Children’s Health Insurance Plans. This provision is called “maintenance of effort.” States that violate this provision are in danger of losing Medicaid funding.

If the governors don’t get relief from MOE provisions, it is likely that many will move to reduce optional benefits for Medicaid recipients. From a mental health perspective, this means eliminated many optional services now offered by state Medicaid programs. Such optional services including physical, occupational and/or speech therapy, home and community-based services, case management services, and rehabilitative and habilitative services. State Medicaid programs may also reduce provider payments, which, in effect, reduce access to care after providers refuse to accept Medicaid patients.

Nevertheless, the governors have a point. Medicaid’s mental health spending is projected to increase rise by 49.7% due to federal health reform law’s expanded Medicaid coverage. Does this mean that the costs will be born solely by the state’s budgets. The answer is probably not.

Currently, these services are provided at the state and local levels. According to a report by the Urban Institute, by making these people eligible for federal Medicaid dollars, states and localities can potentially save between $19.9 billion and $39.7 billion on mental health services by shifting part of the responsibility to the federal government.  The report from the Urban Institute adds that, “Throughout Medicaid’s history, smart and creative state officials have responded to changes in federal law by reconfiguring their programs to maximize fiscal gains and minimize losses. This pattern will surely continue under the Affordable Care Act.”

Let’s hope this is the case, because there are many sick people that need mental health service interventions.