National Alliance on Mental Illness
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November 4, 2005

Senate Completes Action on Medicaid Legislation; House Vote Set for Week of November 7

On November 3, the Senate voted 52-47 in favor of a $35 million deficit reduction package that includes changes to the Medicaid program designed to achieve a net $10 billion in savings over the next 5 years.  Congressional leaders and the Bush Administration hope to reach final 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.  While the Senate measure achieves $35 billion in net 5-year savings, the House companion bill includes deeper cuts to reach a $53.9 billion overall savings target.

House & Senate Bills Differ Substantially on Medicaid Reforms

The separate House and Senate bills differ substantially over the proposed changes to Medicaid.  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-passed 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 House member and urge opposition to provisions in the budget reconciliation package that would adversely impact children and adults on Medicaid living with severe mental illness.  Of most concern to NAMI are the following:

  • A House proposal that would allow states to require beneficiaries (including adults with mental illness on SSI) to pay higher cost sharing 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 would improve upon the current structure of Medicaid.  NAMI urges support for the following proposals:

  • A Senate provision authorizing a demonstration program that would waive the IMD exclusion and allow federal Medicaid matching funds for acute inpatient psychiatric care (see details on the Snowe Amendment 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 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 hereto view a background paper on the separate House and Senate Medicaid proposals.