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House and Senate Set to Consider Legislation Reforming and Cutting Medicaid; Proposals to Curb Targeted Case Management Rejected

October 31, 2005

This week and next, both the House and Senate will be taking up legislation to reform the Medicaid program and achieve a net $10 billion in savings over the next 5 years.  Congressional leaders and the Bush Administration hope to reach agreement on the legislation – known as budget "reconciliation" – by Thanksgiving.  The reconciliation package touches not only Medicaid, but also a broad range of domestic programs including farm subsidies, student loans, food stamps, and child support enforcement to achieve an overall savings target approaching $50 billion.

House & Senate Bills Differ Substantially on Medicaid Reforms

The separate bills reported by the House Energy & Commerce and Senate Finance Committees this past week differ substantially.  The House bill closely follows recommendations put forward by the National Governors Association (NGA) granting states unprecedented flexibility to impose higher cost sharing and premiums on beneficiaries and design benefit packages below current Medicaid standards.  By contrast, the Senate bill achieves most of its savings through cuts in payments to Medicare managed care plans and higher rebates paid to states by generic and brand name drug makers.

Action Needed

Advocates are urged to contact their Senators and House member and urge them to oppose provisions in this budget reconciliation package that would adversely impact children and adults on Medicaid living with severe mental illness.  Of greatest concern to NAMI are the following proposals:

  • A House proposal that would allow states to require beneficiaries (including adults with mental illness on SSI) to pay higher cost sharing (co-pays) for services, including "non-preferred" prescription medications and non-emergency services delivered in emergency rooms;
  • A House proposal that would allow states to require certain beneficiaries (those above 100% of poverty) to pay higher enrollment premiums; and
  • A House proposal that would permit states to offer alternative benefit packages to Medicaid eligible populations that might exclude mental illness treatment and community supports. 

In addition, there are a number of provisions in both the House and Senate bills that NAMI is supporting and that would improve upon the structure of Medicaid.  NAMI urges support for the following proposals:

  • A Senate provision authorizing a demonstration program that would waive the Institutes for Mental Disease (IMD) exclusion and allow federal Medicaid matching funds for acute inpatient psychiatric care (see details on the Snowe Amendment in the backgroud paper below); and
  • A House provision that would direct states to invest in evidence-based disease management programs for the prescribing of anti-psychotics and anti-depressants as an alternative to prior authorization requirements (see details on the Buyer Amendment in the background paper below).

All members of Congress can be reached by calling the Capitol Switchboard 202-224-3121 or online through

Enter your zip code below to access a sample letter on this issue and a list of your representatives to contact now.  If you do not see the box for entering your zip code, click here.

Click here to view a background paper on the separate House and Senate Medicaid proposals.

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