Mental health advocates in Washington state are worried. Thousands of people across that state will lose mental health services July 1 unless the Legislature comes up with $82 million to restore federal Medicaid cuts. A newspaper story reports that hundreds of mentally ill people have already been turned away from community services. The state is facing a $2.2 billion shortfall over the next two-years, so the money is not there to make up the difference. The federal cut will vaporize 20 percent of Washington's community mental health budget.
For years, Washington state exploited an ambiguity in federal law that allowed the state to use the savings from its Medicaid managed care program to pay for non-Medicaid people and services.
Other states did the same, but Washington did it particularly well. Medicaid, the joint federal and state health program for poor children and adults, accounts for 89 percent of the state’s community mental health budget. The national average is 38 percent.
A 1997 federal law says states can use Medicaid money for only Medicaid patients and services. The federal government let the states slide for a while, but cracked down last year.
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