Shifting Focus

Abstract

Over the past 20 years, state mental health agencies have shifted the bulk of funding for community mental health services to the federal-state Medicaid program. Over this same period, states adapted their Medicaid programs to more comprehensively address the service needs of people with mental illness. Adopting the financing mechanism that primarily funds other health care for low-income people moves mental health more toward the mainstream. But it is a policy with risks. Changes to Medicaid are now outside the purview of those most concerned with mental health issues. In 2006, Congress radically altered Medicaid, making fundamental changes to the law. These were soon followed by further proposed shifts in federal administrative policy. This article describes these federal policy changes and assesses their impact on individuals and on state mental health policy. (It should be noted that most administrative changes have since been halted by the Obama Administration).