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House and Senate Leaders Move Toward Agreement on Medicaid Cuts; Advocates Urged To Weigh in Against Higher Cost Sharing

December 13, 2005

Congressional leaders and the Bush Administration are working toward an agreement on budget legislation that will include important changes to Medicaid, including new authority for states to impose higher cost sharing requirements for critical services including prescriptions, physician services, and inpatient care.  The current situation is fluid and involves complicated negotiations over a broad range of domestic policy and budget issues beyond Medicaid including food stamps, foster care, and oil exploration in Alaska.  An agreement could be reached by the end of this week, immediately prior to final adjournment for the year.

Action Required

Advocates are strongly encouraged to contact their Senators and House member and urge them to weigh in with House and Senate leaders against reductions to Medicaid that would harm vulnerable beneficiaries with severe mental illnesses.  One specific provision under serious consideration would allow states to impose higher cost sharing -- even for mandatory SSI beneficiaries -- on "non-preferred" medications.

Advocates are encouraged to remind all members of Congress that higher cost sharing would be disastrous for the most vulnerable Medicaid recipients:

  • Mandatory Medicaid recipients living with mental illness (individuals on SSI) are already well below the federal poverty line and are unable to sustain additional medical costs;
  • The proposed federal budget savings would result not from cost sharing through higher co-payments, but rather from "diminished utilization" of services.  In other words, savings would come because beneficiaries would not seek services, e.g. Medicaid beneficiaries not getting prescriptions filled; and
  • Proposals for higher beneficiary cost sharing will result in enormous disruption of treatment for Medicaid beneficiaries with mental illness, thereby costing states more in the long run as the costs of untreated mental illness escalate (emergency room care, chronic homeless, interaction with criminal justice, increased risk of suicide, etc.).

Advocates are also urged to weigh in on the following proposals under consideration as part of the Medicaid budget legislation:

  • AGAINST a House proposal that would allow states to require certain beneficiaries (those above 100% of poverty) to pay higher enrollment premiums and permit states to disenroll beneficiaries who fail to pay higher premiums for 60 days or more;
  • AGAINST 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 (including screening and early intervention services for children, e.g. Early and Periodic Screening, Diagnostic and Treatment (EPSDT));
  • IN FAVOR OF language clarifying a provision on Targeted Case Management (TCM) services being developed by the National Governors Association (NGA) and State Medicaid Directors;
  • IN FAVOR OF a Senate provision authorizing a demonstration program that would waive the Institutions of Mental Disease (IMD) exclusion and allow federal Medicaid matching funds for acute inpatient psychiatric care (see details on the Snowe Amendment below); and
  • IN FAVOR OF 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 in Washington by calling 202-224-3121 (long distance charges apply) or in their local offices (through the Blue Pages in your local phone book).  Phone numbers for members of Congress can also be found through www.congress.org

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


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