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NAMI E-News February 8, 2005 Vol. 5-4
NYAPRS Note: The following initial overview of the Bush FY 2006 budget proposal was culled from several sources, particularly the National Alliance for the Mental Ill, along with news stories from the Associated Press and Gannett News Service. President George Bush unveiled yesterday his $2.5 trillion budget plan for FY 2006 - with major increases proposed for defense and homeland security, but only a .7% increase for all other domestic discretionary programs. The budget included some deep cuts to Medicaid and housing for people with disabilities, cuts aimed at addressing a $427 billion deficit in the current fiscal year. Given a $427 billion federal deficit for the coming year, a Congress that must work with the President to approve a federal budget by October 1 might find it hard to resist approving many of the cuts. Initial reaction from prominent national mental health advocacy groups was negative. The National Alliance for the Mentally Ill said that "President's FY 2006 Budget Hurts Mental Illness Programs," while the Campaign for Mental Health Reform (which includes over 15 national groups that include USPRA, NMHA, Bazelon Center and National Empowerment Center) put out a statement saying that the "Budget brings more broken promises." Some highlights: MEDICAID The Bush budget proposal includes a total of $45 billion in federal share reductions over the next decade, primarily through tightening of rules on state matching funds. While the budget shows a $60 billion in cuts, this is countered by about $15 billion in 'modest new spending', resulting in the net cut figure of $45 billion. The budget cut is considered just the first of several planned steps to reduce Medicaid spending: the Bush Administration has forecast future proposals to cap federal Medicaid spending through the introduction of a Block Grant proposal that he says will give states new flexibility in running their own Medicaid programs (see below) Matching Funds Cut From early analyses, Bush's budget seeks eliminate the 'inappropriate' use of federal Medicaid funds by curbing methods that states have used to maximize federal matching funds; For example, the budget calls for changes to existing policies that limit the ability of states to use so-called "intergovernmental transfers" (collecting funds from counties and municipalities, or providers receiving federal matching funds and then returning the funds). This is estimated to yield $4.6 billion in savings over the next 5 years, and $11.9 billion over the next 10 years. Case Management Cut The Bush budget proposes to reduce the federal match rate for targeted case management to 50%. This is estimated to reduce Medicaid by $129 million in FY 2006, $1 billion over the 5 years and $4 billion over 10 years. However, reductions would fall hardest on states with matching rates above 50% (particularly those in the south) that are using Medicaid to finance targeted case management (including PACT in some states). Cuts to Pharmaceuticals, Long Term Care Restrictions The budget also proposes changes to complicated policies regarding wholesale and retail pricing of pharmaceuticals (savings of $5.4 billion over 5 years and $15.1 billion over 10 years) and restrictions on the transfer of assets within families of individuals applying for long-term care (saving $1.5 billion over 5 years and $4.5 billion over 10 years). Medicaid's Uncertain Future The budget does not include more long-term systemic changes to Medicaid that incoming HHS Secretary Mike Leavitt is expected to put forward in the coming months. Those changes are expected to include capped federal matching payments to the states for optional populations that states make eligible for Medicaid as an additional flexibility to reduce benefits for these optional populations. At the same time, Secretary Leavitt has stated that the Administration will not be proposing a cap on federal matching payments for mandatory populations (including individuals on SSI). Groups Protest Proposed Medicaid Cuts Democrats, governors and interest groups protested, contending the proposals would squeeze spending in ways that could ultimately lead to fewer services and benefits. It is expected that the nation's governors, both Republicans and Democrats, will fiercely resist these proposals to curtail the federal share of Medicaid, especially given the current strain that Medicaid is placing on state budgets. The National Governors Association appealed to Congress to "save both the states and federal government money, as opposed to shifting costs to the states through budget cuts, caps or other mechanisms." In response, HHS budget director Keery Weems said that given the fiscal atmosphere, "flat funding this year is a pretty good deal." Impact on New York State The Bush budget Medicaid proposal could cost New York at least $7.6 billion in federal funds over the next 10 years, according to lawmakers and hospital officials. Combined with state Medicaid cuts proposed last month by Gov. George Pataki, federal cuts in the 2006 budget proposal Bush sent to Congress would squeeze New York's health-care providers to the point where some would curtail Medicaid services or even shut their doors, some officials warned. "There are so many (cuts) and they are so large that it makes your jaw drop," said Sen. Charles Schumer, D-N.Y. "This is the worst budget for New York that I've seen in my 26 years in Congress." -------- Medicare The budget would add $195 million to help pay the premiums for people who also are eligible for Medicaid. Medicare would also receive a legally mandated 17 percent increase to $340 billion, mostly to pay for the new prescription drug benefits that begin in January. Originally priced at about $395 billion over the decade, the administration now says the new benefit will cost more than $500 billion. -------------------- HOUSING - 50% Cut Proposed for Section 811, Funding for New Production Eliminated, Funding for Section 8 Vouchers Increased Overall, funding for the Department of Housing and Urban Development (HUD) would shrink by 11.5%, or $3.7 billion below current levels. Section 8 In a surprise move, the President's budget proposes an unprecedented deep cut for the Section 811 program, the only program at the Department of Housing Urban Development (HUD) that still produces housing for people with disabilities. Overall, Section 8 is by far the largest program in HUD's overall $28.5 billion request (nearly 62% of the entire budget). The President's budget would cut Section 811 in half, dropping funding down to $120 million from its current level of $240 million. His proposal would direct the remaining $120 million in the Section 811 program to use more than 70% to renew (keep in place) housing funded under the program in previous years. The remaining $120 million in Section 811 would be spent in the following manner o $85 million to renewal of estimated 2 million in existing rent subsidies ($80 million for tenant-based and $5 million for project-based renewals) and o" $35 million of new tenant-based subsidies The Bush budget would completely eliminate all funding for new unit production in FY 2006, ending what advocates called 'a 30-year commitment from HUD to support the production of new housing to non-elderly people with severe disabilities.' Reliance solely on tenant-based assistance (portable rent subsidies that rely on voucher recipients being able to find rental housing on their own) also represents a major change in the targeting of 811 away from people with more severe impairments who need housing related supports. Further, it is unclear at this point if HUD's Section 8 request for FY 2006 is sufficient to meet the cost of renewing all vouchers under lease. This past month, all housing authorities administering Section 8 were told that their allocation for the current fiscal year would be cut by 4%. As a result, most housing agencies are expected to continue holding back unused vouchers and demanding higher tenant contributions from people in their programs. Thus, HUD will likely be renewing vouchers for a program that continues to shrink. Moreover, the budget notes that HUD intends to come forward with legislation to accelerate conversion of Section 8 funding to a "budget-based" program as opposed to a "unit-based" program. Under a budget-based system, funding to housing agencies is capped at a fixed amount that does not account for increased rents or changes in tenant income. NAMI remains concerned that these changes (including elimination requirements to target vouchers to extremely low-income households) will make it ever more difficult to target assistance to individuals with mental illnesses living on SSI. Section 202 for elderly By contrast to the 50% cut to the Section 811 program, the budget proposes to level fund 811's cousin for the elderly, Section 202 at $741 million. In fact, under the proposed budget Section 202 would actually produce more new units in FY 2006 through the redirection of funds previously allocated to planning grants. Homeless Funding In a rare bright spot for the HUD budget, the President is requesting a $200 million increase for programs under the McKinney-Vento Homeless Assistance Act, boosting funding to $1.44 billion. This includes $200 million for the President's Samaritan Initiative to end chronic homelessness , including new grants for permanent housing paired with case management targeted to individuals and families experiencing long-term chronic homelessness. In addition, HUD is requesting $25 million as part of an interagency initiative on reintegration of criminal offenders returning from prison. MENTAL HEALTH SERVICES Most programs at the Substance Abuse and Mental Health Services Administration's Center for Mental Health Services are held to a freeze at current levels, with the exception of a $6 million boost for State Incentives Grants for "Mental Health Transformation," Overall, the President is proposing a $56 million SAMHSA cut to substance abuse prevention and a school violence prevention program run jointly with the Department of Education. Most other programs at SAMHSA are proposed to be frozen at their current level, with increases recommended for the two Bush Administration priorities: the "Access to Recovery" voucher initiative for substance abuse treatment (the Administration is proposing to boost funding to $150 million) and expansion of the state incentive grant program for "Mental Health System Transformation" (boosted to $26 million, from its current level of $20 million). These state incentives grants are designed to help states follow through on the July 2003 recommendations in the White House "New Freedom Initiative" Mental Health Commission report. Under the proposal, funds would be allocated to as many as 11 states on a competitive basis to support the development of comprehensive state mental health plans to reduce system fragmentation and increase access to evidence-based services that promote recovery from mental illnesses. States would be required to use funds to develop plans that cut across multiple systems such as housing, criminal justice, child welfare, employment and education. In subsequent years, up to 85% of funds could be used to support community-based programs, with the remaining 15% available for state planning and coordination. Most other programs at SAMHSA's Center for Mental Health Services (CMHS) are funded at their current FY 2005 level in the President's budget including: The Mental Health Block Grant - $433 million, The PATH Homeless Formula Grant - $55 million, Children's Mental Health - $105 million, Suicide Prevention (including initiatives under the Garrett Lee Smith Act) - $16.46 million, and PAIMI Protection & Advocacy - $34 million. --------------------- JUSTICE No funding proposed for the new program authorized by the "Mentally Ill Offender Treatment and Crime Reduction Act"; elimination of the Byrne discretionary grants used in many states to fund jail diversion programs. VETERAN'S MENTAL HEALTH CARE: $100 Million Increase In an unprecedented request, the President's budget seeks a $100 million increase for enhanced mental illness treatment services in the VA, boosting funding to $2.2 billion for FY 2006. The budget states that these additional funds will allow for the VA to put in place a full continuum of services for veterans with mental illness, including PTSD. It is estimated that the VA provides treatment for more than 4.1 million veterans, including over 886,000 veterans who receive mental health services, more than 460,000 of whom are veterans who are service connected for a mental illness.
A Press Release from the Consortium for Citizens with
Disabilities: Last Updated on 02/15/05 webmaster@namiscc.org |
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