Behavioral Health Industry Under Threat as GOP Budget Adds Medicaid Work Requirements, 6-Month Eligibility Reviews

The Republican-led House Committee on Energy and Commerce released budget reconciliation documents that show the GOP has walked back from direct cuts to Medicaid spending, as many in the health care world have feared.

Instead, the documents released late on May 11 include several provisions that would eliminate spending on health care programs overseen by the committee by enacting a boatload of new regulations that could drive down participation in the programs, thereby leading it toward its directive to reduce deficit spending by $880 billion.

Early estimates show that the new regulations, as presented, would, at first blush, get the House Energy and Commerce Committee about $715 billion, according to preliminary estimates by the Congressional Budget Office (CBO). Democrats on the committee released correspondence from the CBO that estimates that 13.7 million people could lose health coverage across several types, including Medicare and Affordable Care Act plans.

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Generally, the bill would turn a more skeptical eye on member participation for those who are not citizens or those who are seen as the traditional population for Medicaid coverage — children, pregnant women and the disabled. Here are a few examples of specific provisions:

— Medicaid programs would be required to conduct redeterminations every six months, not the current every 12 months, for those part of the “expansion” population.

— Federal financial participation would be prohibited for those with unclear immigration and residency status

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— Establish new cost-sharing requirements to total up to 5% of the member’s income

— States would require work requirements, called “community engagement” in the bill, for working-age adults that are not “medically frail,” not caring for a disabled person or pregnant to be determined the month before establishing eligibility or redetermining eligibility.

The current bill does not specifically address behavioral health-related issues.

Overall, the cuts presented by the reconciliation budget do not go so far as to directly slash Medicaid funding. This was seen as potentially having “a crippling effect” on the behavioral health industry. However, increased hurdles to Medicaid eligibility and retention will inevitably have a major impact on the behavioral health industry. Medicaid is the largest single funder of care in behavioral health. Within Medicaid, more member beneficiaries have a behavioral health condition than any one specific physical health condition.

It remains to be seen what proposed mandates will survive the budget reconciliation process. Republicans, who hold slim majorities in both houses of Congress, walk a fine political line between their promises to cut down on federal spending and protecting popular social benefit programs.

One survey finds that 42% of Americans want to see increased spending, while 40% want to see the same levels of spending on Medicaid. The same survey finds that Republicans want to see increases at lower rates (24%) but want to see levels maintained at a comparable rate as the whole of survey respondents (43%).

Even among Republican lawmakers, cutting Medicaid is not a preferred solution. Missouri Republican Sen. Josh Hawley called on lawmakers to protect, even bolster, social support programs in the name of enabling working-class Americans.

“Republicans need to open their eyes: Our voters support social insurance programs,” Hawley wrote. “More than that, our voters depend on those programs.”

Editor’s Note: This article previously stated that the health care portion of the House Energy and Commerce Committee funding bill would address $715 million in deficit spending. The correct figure is $715 billion.

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