Behavioral health providers are on “pins and needles” anticipating possible federal medicaid funding cuts, Stephen Gillaspy, director of health policy and healthcare financing at the American Psychological Association told Stateline.
States could manage reduced federal funding several ways — including cutting Medicaid enrollment, ending reimbursement for some services or reducing reimbursement across the board, Mr. Gillaspy told the outlet in a Feb. 13 report.
Federal Medicaid funding levels in 2025 and beyond are up in the air. In February, the House of Representatives passed a budget resolution that directs the House Committee on Energy and Commerce, which oversees Medicare and Medicaid, to identify $880 billion in savings over the next decade.
The Senate is expected to vote on the resolution in March.
The resolution does not specify where the committee should cut funding, but the Congressional Budget Office found that the $880 billion target cannot be reached without significant cuts to Medicaid.
Medicaid is the single largest payer of behavioral health services, and several states have made efforts to increase reimbursement for behavioral health providers in recent years.
The National Alliance on Mental Illness opposed the budget resolution.
“Medicaid is a lifeline to tens of millions of people who rely on this coverage to access mental health services. This budget resolution puts access to those services at risk, potentially harming the 1 in 3 people with mental illness who rely on Medicaid,” CEO Daniel Gillson said in a Feb. 26 news release.
According to KFF, more than one-third of Medicaid enrollees have a mental illness, and 1 in 10 have a serious mental illness.
Reimbursement for behavioral health services varies from state to state, Mr. Gillapsy told Stateline, but cuts in Medicaid funding would have “a huge negative impact for behavioral health care.”
The effect of Medicaid funding cuts would also vary by state, according to an analysis from the Urban Institute and the Robert Wood Johnson Foundation. If federal lawmakers choose to reduce federal per-capita funding for Medicaid enrollees, states with lower per-capita income, including Arkansas, Kentucky, Louisiana, Mississippi, New Mexico and West Virginia, would be hardest hit.
