December 21, 2009 | last updated May 26, 2012 9:32 am

Budget Cuts Hurt Most In Need

Alicia Woodsby

The state's recent cuts have overwhelmingly affected people who are the most poor and the most ill in Connecticut.

The continuous slash-and-burn cuts to the most in need are ineffective and costly public policy. Don't be fooled. These are not real cuts — these are cost shifts. The state is shifting money from one place to another, and targeting services to those most marginalized.

Just a few of the burdens that will hit low-income people with disabilities and seniors in the coming months include:

• New restrictions on psychiatric medications, and

• New co-pays for people on Medicare and Medicaid and the elimination of coverage for drugs restricted by their federal private plan.

Concurrently, the governor made substantial rescissions to community mental health services for both children and adults. The stark reality is that Connecticut does not have the services or staff necessary to face current and increasing needs. Any cuts to community mental health services or providers will further erode cost-effective community options and force people into expensive crisis and institutional settings.

Cuts to community mental health services for children will create significant burdens on emergency rooms and inpatient pediatric psychiatric beds, and feed a pipeline to in-and out-of-state residential treatment settings, child welfare, juvenile justice, and adult correctional systems. At the same time, the state is slated to significantly reduce its psychiatric inpatient capacity for both children and adults. Families will be in crisis with nowhere to turn.

What this translates into is more people who cannot afford their medical bills, rent or medications — more people who cannot work without the treatment and supports that enable them to function. What this will mean for many people with psychiatric illnesses is bankruptcy, relapse, job loss, and homelessness. Proven community solutions, like Supportive Housing, costs $54 per day — hospitalization and inpatient psychiatric care are more than 20 times more costly.

In addition to these cuts, the governor wants to impose co-pays on the entire Medicaid population — a policy that has been twice rejected in our state because the harm and costs are so well-documented.

The governor also wants to remove the protection that the legislature just put in place in order to prevent medication disruptions for people who are stable on psychiatric medications. The estimated savings is $110,000 — when the consequences of medication disruptions can be dire, resulting in costly hospitalizations, and often leading to the loss of independence that took years to obtain.

Multiple studies show that restricting access to psychiatric medications leads to higher costs through increased emergency room use and hospitalization. A study in the New England Journal of Medicine noted that limiting the use of psychotropic medication for those with schizophrenia increased costs 17-fold because of hospital costs incurred.1

Numerous studies also show that Medicaid co-pays lead to people not getting their medications. Co-pays result in across the board reductions in all service usage, not just less important services or products, and they more adversely affect people at risk of poor health who are low-income.2

What's even worse is that the state stands to lose federal revenue for every dollar cut from Medicaid, and has left nearly $30 million in federal reimbursement on the table. Connecticut can bill Medicaid for several community mental health services currently provided in the state. In addition, the state's Commission on Enhancing Agency Outcomes recently reported an estimated savings of $17 million annually by providing community services to 1,400 persons in prison with psychiatric illnesses who are incarcerated for low-level, nonviolent offenses. The average cost of the community services and housing is $20,000, whereas the cost of a correctional setting ranges from $40,000 to $60,000 per year.

There are revenue enhancements and other choices that can be made. Policymakers are refusing added costs to the most wealthy — but have already approved bigger, more devastating burdens on those with the least resources in our state — many of whom have serious and debilitating illnesses. Connecticut needs real solutions. We need to spend smarter — on fiscally sound and proven solutions, and not on more costly crisis and institutions.

Alicia Woodsby is the public policy director of the National Alliance on Mental Illness, Connecticut chapter (NAMI-CT).

1. Soumeria, S.B. et al, "Effects of Limiting Medicaid Drug-Reimbursement Benefits on the Use of Psychotropic Agents and Acute Mental Health Services by Patients with Schizophrenia." New England Journal of Medicine, 331:650-655; 1994.

2. J. Gruber, "The Role of Consumer Copayments for Health Care: Lessons from the RAND Health Insurance Experiment and Beyond," Kaiser Family Foundation (2006)


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