National Alliance on Mental Illness
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February 1, 2006

House Clears Budget Measure Including Cuts to Medicaid, President Expected to Sign Measure Soon

The House gave final approval to a $39 billion package of budget cuts on February 1, 2006 that will result in major changes in Medicaid, including reductions aimed at beneficiaries across all eligibility categories and new flexibility for states that could result in higher cost sharing for recipients with mental illnesses and other disabilities.  The vote was 216-214.

The legislation -- known as the budget reconciliation bill (S 1932) -- now moves on to the White House where President Bush is expected to sign it into law.  This marks the end of a six-month struggle to stave off changes to Medicaid that are likely to result in renewed state efforts to shift cost sharing onto beneficiaries for services such as prescription drug benefits, case management, and early intervention services for children.

NAMI is extremely grateful to advocates across the country that worked to oppose this legislation.  The struggle now shifts to the state level as governors, state legislators, and state Medicaid directors weigh changes that could have a profound impact on the way the program serves the most vulnerable beneficiaries, including mandatory beneficiaries eligible for SSI.

Click here to see how members of Congress voted on S 1932.

What Happens Next?

Once the measure is signed into law, new guidance will be provided to state Medicaid agencies by the federal Centers for Medicare and Medicaid Services (CMS) outlining new discretion to make changes in their programs -- largely without having to seek waivers from the federal government for protections that currently exist in federal law.

NAMI is most concerned about the potential for states to be able to:

  • Impose higher cost sharing on Medicaid recipients with mental illness for "non-preferred" drugs and "non-emergency services in emergency rooms,"
  • Require Medicaid recipients to pay higher premiums to participate in Medicaid,
  • Realign optional services to limit access to targeted case management that is integral to programs such as assertive community treatment, and
  • Create alternative benefit packages that do not include all of the services traditionally required under Medicaid.

NAMI will be working with state affiliates across the country to carefully monitor the activities of states seeking to use their new authority to ensure that any changes do not adversely impact children and adults living with mental illness.  NAMI will also be working with state and local NAMI affiliates to advocate vigorously against such changes.

Read a detailed analysis of the just passed Medicaid changes.