Lawmakers Mull Medicaid Expansion, Seen as Key in Funding Mental Health Care Redesign

Editor’s Note: This is the last in a series of three articles in Iowa Patch’s look at the state’s mental health system, its deficiencies and whether a spate of mass shootings should change the conversation. 
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A prickly debate over Medicaid expansion as part of the Affordable Care Act could influence how Iowa’s mental health system overhaul is funded.

A bipartisan panel of legislators said last week that $20 million is needed to implement the redesigned mental health system, 13 times more than the $1.5 million. Iowa is moving away from a system under which Iowa’s 99 counties each ran their own programs to a system of 15 regional authorities. 

The new system shifts responsibility for funding mental health care from county property taxpayers to Medicaid.

"The goal of a regional administration is to allow for continuity across the state," said state Sen. Jake Chapman. "Currently, each county provides a different array of services which leads to large inequity based on where you live. It is still the objective to continue to have local delivery access and not to minimize services but rather equalize the services.

"Another inequity that exists in the current system is the funding. Counties have been capped at a dollar amount for years. The new proposal provides a per capita dollar based on population. That per capita amount will be the same regardless of which county you reside," he said.

Mental health-care advocates say that without Medicaid expansion, Iowa’s most vulnerable residents could encounter the same problems that prompted overhaul of the old mental health care delivery system – limited access. 

One in six currently uninsured adults with incomes below 133 percent of poverty has a severe mental disorder, according to a 2011 study in the American Journal of Psychiatry on the effects of health-care reform on severely mentally ill adults.

"It is too early to know exactly how much the redesign will cost and how much savings may be derived from a more efficient delivery of services," Chapman said. "I will closely monitor the cost to provide the core services Iowans are expecting and make a decision. It is important to me that we weigh the needs to deliver services versus the cost to all taxpayers."

Newly elected state Sen. Charles Schneider, a West Des Moines Republican, said he’s keeping an “open mind” about Medicaid expansion, something leaders in his party are skeptical about.

Gov. Terry Branstad has said he’s reluctant to commit Iowa to the five-year Medicaid expansion outlined in the Affordable Care Act because he doesn’t think it’s sustainable. The federal government pledges to pay 100 percent of the cost of each state’s Medicaid expansion from 2014 to 2016. The federal share would be reduced to 90 percent by 2020.

While some residents and health care professionals say the recent gun control debate should be at least equally focused on mental health reform, Chapman said legislative committees have taken their responsibilities seriously in trying to provide a better system for mental health.

"I certainly believe that we should be focused on the root problem rather than the by-product. Sandy Hook is only one of many unfortunate, tragic events," he said. "Crisis services are recommended in each region of the mental health program. Ideas such as a centralized 24-hour crisis hotline and jail diversion programs including support for local law enforcement training for intervention teams can play a role in improving the system. The issue of mental health has been at the forefront of conversation and legislation for the last few years and I believe it will continue to be a major topic of discussion."

Read Part 1 of the series: 

Read Part 2 of this series: Legislators Say $20 Million in Mental Health Funding Needed; DHS Says Only $1.5 Million Required