House and Senate Budget Resolutions Potentially Harmful

Mar 24, 2015

Last week the House and Senate Budget Committees reported their proposed 2016 budget resolutions. These proposals call on Congress to change the Medicaid program into a block grant to the states, repeal the Affordable Care Act (ACA) and balance the budget within 10 years without adding tax increases. Both the House and Senate will be voting on the budget resolution this week, aiming to pass a final budget by March 28.

What is a budget resolution?

A budget resolution creates binding requirements on House and Senate Committees to produce legislation later in the year that achieves specific budget targets. These limits will govern spending levels for a range of important mental health programs including mental illness research at the National Institute of Mental Health (NIMH), mental health services at the Substance Abuses and Mental Health Services Administration (SAMHSA) and supportive housing programs at the U.S. Department of Housing and Urban Development (HUD).

It is important to note that the budget resolution will not automatically become law and will not be sent to the White House for the President to either sign or veto.

What are the budget resolution proposals?

The proposals from the Senate and House Budget Committees—chaired by Senator Mike Enzi, R-Wyo. and Representative Tom Price, R-Ga.—align closely with a range of key Republican priorities including:

• Converting Medicaid to a block grant. Currently states administer Medicaid, but receive an open-ended funding match from the federal government. Both the House and Senate budgets would replace this federal-state funding match with a lump-sum annual block grant, giving states flexibility to design their benefits, limit eligibility and increase cost sharing between the state and the person receiving Medicaid.
• Repealing the ACA. Both budgets include a full repeal of the ACA, “including all of the tax increases, regulations, subsidies and mandates” along with any Medicaid expansion. 
• Keeping spending cuts in place. Both budgets assume that the sequestration caps, or across-the-board spending cuts imposed in 2011, will remain in place. Simultaneously, the Senate budget proposes to cut domestic non-defense spending—which could include mental health research, services and supports—by $236 billion below the caps set by sequestration.

Why is Congress’ proposal to make Medicaid a block grant harmful to people affected by mental illness?

The House and Senate budget resolutions change the way Medicaid is funded. In order to save at least $400 billion over 10 years, the budget will allow states greater authority in meeting their specific population needs while controlling overall program costs. However, it would also repeal the current legal benefits associated with Medicaid for non-elderly adults with serious mental illness who are eligible for Supplemental Security Income (SSI).

NAMI has consistently opposed proposals to convert Medicaid to a block grant because of the potentially devastating impact for those who rely on the program for critical treatment services, including prescription medications and support services such as case management and peer support. 

Currently, Medicaid spending has the ability to adapt as program enrollment increases or as new, innovative treatments become available. If Medicaid were to be converted to a block grant, states would be limited to a lump sum of money each year. The result? Major pressure on states to continually cut costs by reducing eligibility for programs, reducing available services, or drastically cutting pay for medical and mental health providers well below already low levels.

The Obama Administration has made it clear that they oppose any proposal to convert Medicaid to a block grant. Nonetheless, NAMI will continue to monitor this process closely and will be posting regular action alerts.

Read more about the House and Senate budget resolutions.

Contributions from Emily Cepla and Jessica W. Hart.