FY 2004 Budget Fails to Prioritize Mental Health

National Mental Health Association
Tuesday, 4 February 2003

Congress Must Act to Preserve the Medicaid Safety Net and Increase Mental Health Funding: Statement by Michael Faenza, NMHA President and CEO

In today's uncertain times, Congress must act to preserve the Medicaid safety net and provide much needed increases for mental health funding.

The National Mental Health Association is deeply concerned that the Administration's budget for FY 2004 encourages states to cut benefits provided by Medicaid, while proposing virtually no increase in overall funding for community mental health programs under the Substance Abuse Mental Health Services Administration (SAMHSA).

This double whammy comes just months after the President's New Freedom Commission on Mental Health stated that "our Nation's failure to prioritize mental health is a national tragedy." As state and local governments struggle with record-setting budget shortfalls and debate significant cuts in services for adults and children with mental health needs, the crisis facing mental health services is becoming even more dire.

While NMHA supports bipartisan legislation to provide increased federal funding to ease state burdens under the Medicaid program, the Administration's budget -- in the name of "flexibility" -- proposes instead to block grant Medicaid funding for certain groups of beneficiaries. Such changes would lead states to drop beneficiaries and cut benefits, and would have a devastating effect on the millions of low-income people with mental illness for whom Medicaid is the only option.

The budget proposal claims that this Medicaid "reform" would enable states to provide health coverage for the uninsured, but it could do so only at the expense of current Medicaid beneficiaries. Because Medicaid is the primary source of state and local funding for mental health services, NMHA is gravely concerned that the Administration's proposal would weaken this critical safety net program and abandon low-income individuals with disabilities whose very lives often depend on it.

With a real mental health crisis in states and localities across the country, the budget offers the same static level of overall federal funding support for mental health services provided through SAMHSA in the past two years. While NMHA does applaud the $10 million increase proposed for the Children's Mental Health Services program, the increase for the PATH Homeless Formula Grant, and an increase in funding for substance abuse treatment, other critical mental health and substance abuse programs would be slated for cuts. In addition, the budget provides only a modest increase in research funding for the National Institute on Mental Health, slowing important gains made in recent years.

The National Mental Health Association is the country's oldest and largest nonprofit organization addressing all aspects of mental health and mental illness. The NMHA works to improve the mental health of all Americans through advocacy, education, research and service.

For more information, or to contact National Mental Health Association, see their website at: www.nmha.org