KHI News Service

Health reform expected to change mental health services

Wide expansion of Medicaid could change state's approach to funding mental health care

By | July 28, 2010

Currently in Kansas, non-disabled parents are eligible for Medicaid if they’re below 32 percent of federal poverty level.

That’s one of lowest eligibility thresholds in the country.

Childless, non-disabled adults aren’t eligible for Medicaid no matter how little their income.

But under health reform, in 2014, the eligibility threshold for both groups goes to 133 percent of the poverty guideline in all 50 states.

“We’ll probably have another 125,000 people eligible for Medicaid,” said Kansas Health Solutions Chief Executive Michael Goldberg. “If everyone who’ll be eligible chooses to enroll, the state’s Medicaid population could grow by half. I’ve seen estimates as high as 57 percent.”

Goldberg addressed a Wednesday meeting of the Kansas Mental Health Coalition.

Kansas Health Solutions is the managed care organization that oversees the state’s Medicaid-funded mental health services.

Citing studies of what happened in Massachusetts after the state expanded its Medicaid eligibility to 133 percent of the poverty level, Goldberg predicted that the now-unserved population’s mental health needs will be greater than those found in the population that has private insurance but less than those currently enrolled in Medicaid.”

He also predicted the new Medicaid beneficiaries:

• Will more likely have substance abuse problems than those in a commercial plan or in the current Medicaid population.

• Will include more single, younger and childless adults with a higher proportion of men.

Expanding Medicaid, he said, is sure to force changes in the state’s approach to underwriting mental health services.

Rick Shults, director of mental health at the Kansas Department of Social and Rehabilitation Services, said he’s trying to analyze the state’s options.

“The system we’ve had in place for a great many years is one that serves everyone without regard to ability to pay,” Shults said. “It’s a system that’s been funded by Medicaid, state grants and to some extent private insurance.”

The state’s community mental health centers use the state grants to offset the costs of services for people who cannot afford insurance and who are not eligible for Medicaid.

Since 2008, these state-funded grants have been cut by 65 percent - $31 million in fiscal 2008, $10.8 million in fiscal 2010.

It won’t be long, Shults said, before policymakers question whether these grants will be necessary under health reform.

“The question needs to be asked: If the decision is made that Medicaid is the way to go, what happens to the underlying mission that everyone be served regardless of ability to pay?” he said.

Shults noted that some of the services now covered by the grants might not be covered by Medicaid.

“It’s going to be up to us,” he said, referring to both SRS and groups that advocate for the mentally ill, “to say that if the grants are needed, here are the services they’ll be spent on, here’s why these services are needed, and here’s how and where they’ll be provided.”

This discussion, Shults said, appears to be a long way off.

“Everything that’s being talked about now is at the 35,000-feet level,” he said. “Nobody’s talking at this level of detail yet.”

Bill Persinger executive director at the Mental Health Center of East Central Kansas, Emporia, said he doubted Medicaid could fully replace the grants.

“Let’s not forget that Medicaid doesn’t begin to cover the centers’ costs of providing services,” he said.

Other topics:

• Shults said Osawatomie State Hospital continues to be over census and is diverting patients to private inpatient units in Wichita and Newton.

• Goldberg said the state's temporary 10 percent cut in Medicaid reimbursements earlier this year cost community mental health centers more than $7 million. The cut took effect Jan 1 and was lifted July 1.