NEWS: Federal money “squeeze” would hurt state’s mentally ill, coalition fears

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By Bill Davis, senior editor  |  A broad-based statewide health care coalition has formed in South Carolina to prepare for what some see as the biggest threat to the mentally ill here since deinstitutionalization ended in the 1970s.

Deinstitutionalization was the process of closing massive public state hospitals for the mentally ill that were funded with help of federal dollars. Hundreds of thousands of newly-released patients were then referred for care to what turned out to be underprepared and underfunded community health care programs.  In turn, that caused a host of problems that included, according to some, a spike in this nation’s homeless crisis.

Impact of changing Obamacare

Earlier this year, the U.S. House of Representatives passed a bill intended to “repeal and replace” the Affordable Care Act, nicknamed Obamacare. That bill, now residing in the U.S. Senate, included a major restructuring of how the federal government spends its health care dollars to fund state-run Medicaid programs.

There is concern among many observers, advocates and stakeholders here that if the Medical funding shakeup survives the Senate, it could put the “squeeze” on the state of South Carolina.  Faced with the potentiality of shrinking federal support, South Carolina would likely have to look to cut many “optional” health care offerings, which include some mental health and drug addiction programs.

Thanks to an aging loophole in federal health care law, certain mental health programs are not deemed “essential” services and don’t have to be provided on a state level for that state to continue to receive federal Medicaid funding.  This poses a particularly harsh problem in South Carolina, a poor state in which  so many residents are stranded between Medicaid and Obamacare coverage.

When the state elected to “opt out” of Medicaid expansion under former Gov. Nikki Haley, hundreds of thousands of South Carolinians were found to be earning too much money for Medicaid coverage and yet not enough for the Obamacare health care stipends to kick in.

And if more federal money exits South Carolina’s funding equation, then legislators and policy makers may be hard pressed to find more state funds to cover the difference.

Consider that South Carolina’s taxation ability means that the federal government provides close to 70 percent of Medicaid funding here, compared to a richer state like Connecticut which pays close to 50 percent, according to one state official.

Funding change could be disastrous

Bill Lindsey, a health care advocate and the executive director of the state chapter of the National Association of Mental Illness, said he “absolutely” thinks any “radical” change to Medicaid funding could be as disastrous for the mentally ill here as the closing of the institutions decades ago.


Allan Stalvey, executive vice president of the S.C. Hospital Association which is organizing the now 17-member S.C. Behavioral Health Coalition, said that one unfortunate result of the current mental health care paradigm is that since so few people have insurance in the state, many times local jails have become “inpatient mental health facilities.”

“It’s a vicious circle where mentally-ill people are picked up by police and the soon turned loose without the proper medications, and they are soon right back in the county jail,” said Stalvey, adding that uninsured mentally-ill patients showing up at emergency rooms also strain state hospitals.

Instead of being a place of last resort for mental health care, emergency rooms have emerged for many South Carolinians struggling with mental or emotional issues as their “first resort,” said Stalvey.

Mark Binkley, the deputy director for the division of administrative services at the state Department of Mental Health, estimated close to 150,000 people a year already receive some form of mental health care currently in South Carolina between locked facilities, which has the lion’s share, and public schools.

Binkley praised Stalvey organization’s efforts in creating what he called a broad-based and stakeholder-heavy coalition, which includes the S.C. Sheriffs Association. Binkley also said that the state currently enjoys “a lot of good synergy” between public and private sector health care.

“Within the last decade, it has really become really clear that there is much of a separation between mental and physical wellness,” said Binkley. He added that the presence of a mental illness on top of an existing physical one too often means neither condition will get any better.

If someone has a cold or diabetes, the threat of a disorder like depression means the patient is less likely to follow through with their care plan, according to Binkley, who added, that sometimes “treatment and the best medicine may not always help.”

Wait and see


Stalvey praised the work this year of state Rep. Murrell Smith (R-Sumter) and state Sen. Thomas Alexander (R-Walhalla) for getting a law passed that created mental health crisis stabilization units across the state for patients needing as much as a five-day stay.

Alexander, called a “stalwart” champion of mental health care by Binkley, said he wasn’t as concerned as some in the coalition.

Alexander said he was taking a”‘wait-and-see” approach to the proposed changes in the federal health care bill being debated in the nation’s capitol.


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