The Corner

How Obamacare’s Mental-Health Regs Fail to Help the Most Serious Cases

This week, the Obama administration announced new regulations requiring private insurers to do what the federal government won’t: Provide health-care coverage for mental illnesses equal to what they provide for other physical illnesses. The new regulations will help many Americans, but few of the most seriously mentally ill. And while requiring private insurers to end discrimination against mental illness is to be lauded, it is unconscionable, dangerous, and expensive to allow the federal government to continue its own policy of discrimination.

President Obama should focus any incremental expansions in social-service and health-care programs on those who need it most. Ninety percent of people with the most serious mental illness, schizophrenia, cannot work and therefore do not have private insurance — they rely on Medicaid. The new regulations will mean little to them. Medicaid reimburses states for roughly 50 percent of the cost of caring for the truly indigent. But an obscure provision of Medicaid law called the “IMD Exclusion” prevents Medicaid from reimbursing states for the care and treatment of people in state psychiatric hospitals. As a result, states bear 100 percent of the costs of state psychiatric hospitals and have learned that, by kicking people out of such institutions, they can get reimbursed by Medicaid for fifty percent of their care in the community. So kick them out they do. 

report I co-authored with lead author Dr. E. Fuller Torrey of the Treatment Advocacy Center found that, in 1955, ten years before Medicaid was enacted, there were 340 public psychiatric beds available per 100,000 Americans. In 2005, there were only 17 public psychiatric beds available per 100,000. In other words, the number of beds per capita dropped 95 percent from 1955 to 2005. We are now short over 100,000 beds for the most seriously mentally ill — and that assumes we had perfect community services, which we don’t.

The lack of beds has had a profound effective on crime. The Economist found that as the availabililty of psychiatric beds go down, the number of jail cells goes up. It is now leaders in criminal justice, rather than mental health, who have become the most vociferous advocates for the most seriously ill. In an op-ed in the Albany Times Union, Chief Michael Biassotti, immediate past president of the New York State Assciation of Chiefs of Police, wrote about the impact Medicaid’s failure to provide parity coverage has had on New York: 

Because state hospitals (close)… local psychiatric hospitals become overcrowded. The psychiatrists are put under intense pressure not to admit patients and to discharge those admitted sicker and quicker to free beds for new arrivals. Anyone well enough to walk in and ask for help, is generally not sick enough to be admitted.

This makes involuntary admission — becoming a “danger to self or others” — the only path in. That’s when our officers are called on to defuse the potentially dangerous situation and transport the mentally ill individuals to psychiatric hospitals.

We wait hours for psychiatrists to evaluate them, only to find the doctor overrules us and refuses to admit the patient. If the individual is admitted, they will generally be discharged prior to being fully stabilized or having effective community services put in place.

The easier solution for our officers is to take people with serious mental illness to jail, something we are loath to do to sick people who need help, not incarceration.

To develop his policy, President Obama rounded up the usual suspects: those in the corners of the mental-health industry that provide services to person who are higher functioning than those in state hospitals. He ignored the National Association of State Mental Health Directors. Their members are responsible for the care of the most seriously ill and strongly encourage the ending of Medicaid discrimination. He also ignored those in the criminal-justice system. And that’s just plain dangerous.

— D. J. Jaffe is executive director of Mental Illness Policy Org., a nonpartisan think tank on serious mental illness.

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