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Failure to Raise Spending Caps Threatens Mental Health Resources

An estimated 25.5 million adults with a mental health condition didn't receive services of any kind in 2016. Yet federal funding for the Community Mental Health Services Block Grant (MHBG), a key program providing services to adults with serious mental illness and children with severe emotional disturbance, will at best stay flat in 2018 — which is effectively a cut after accounting for inflation. That's just one example of how the 2011 Budget Control Act's (BCA) caps on funding for annually appropriated programs are impeding investments (and often forcing harsh cuts) in critical domestic priorities.

MHBG resources are distributed to all 50 states, the District of Columbia, and the eight territories on a formula basis and then distributed to local community mental health providers. MHBG pays for services that Medicaid doesn't cover and fills important gaps like case management, provider administrative costs, and outreach and engagement. Its funding for services is particularly important for the uninsured, so cuts in MHBG funding would be especially harmful for people in the 19 states that have not implemented the Affordable Care Act's (ACA) Medicaid expansion.

MHBG funding has risen in inflation-adjusted terms since 2010. Current House and Senate bills that fund MHBG would keep 2018 funding at the 2017 level, resulting in a 2 percent cut after accounting for inflation. Earlier proposals were far worse. President Trump's 2018 budget and the House Appropriations Committee's original bill proposed drastic cuts of 28 percent and 27 percent, respectively. The full House reversed the cut in the Appropriations Committee's bill, but Congress hasn't yet enacted the final 2018 bill, leaving open the possibility that MHBG won't be protected from further cuts. And, as noted, the pending House and Senate bills only provide flat funding, rather than a funding increase that would enable states to serve more people.

Mental health services funding is a victim of a larger effort by the President and House Republicans to reduce non-defense appropriations below the BCA's tight caps, which were further lowered by "sequestration." To adequately fund priorities like mental health, Congress should raise the caps by reducing the sequestration cuts — as the President and Congress have done every year since sequestration took effect in 2013.

Failing to raise the caps would likely roll back the incremental progress that policymakers have made to improve financing for mental health services. In 2008, President Obama and Congress enacted the Mental Health Parity and Equity Act, which strengthened private and public insurance coverage for both mental health and substance use treatment services. Also, the ACA's coverage expansions — especially the Medicaid expansion — allow more people with mental health conditions to have health insurance and afford the care they need. And policymakers have consistently increased MHBG funding, recognizing that it's a key part of building provider capacity to deliver services that public or private insurance doesn't cover but that are essential for peoples' success. These services can be the difference between self-sufficiency and adverse outcomes such as incarceration, institutionalization, homelessness, or a co-occurring substance use disorder such as overuse of opioids.

In past years, Republicans and Democrats have worked together to increase investments in MHBG and there's no reason to stop now. Congress should raise the budget caps by reducing sequestration cuts and provide increased funding so that more people can get the help they need.

Peggy Bailey
Executive Vice President for Policy y Program Development