Dear Secretary Thompson:

On behalf of the National Mental Health Association, I am writing to express our concerns and offer some constructive suggestions regarding the recently announced Health Insurance Flexibility and Accountability (HIFA) Demonstration Initiative.  NMHA, the country’s oldest and largest nonprofit organization addressing all aspects of mental health and mental illness, shares your goal of improving access to health care for the over 42 million Americans who currently lack coverage.  However, we reject the notion that in this nation, one of the richest in the world, we must roll back health care for some of the neediest members of our society in order to improve access to care for others.

Medicaid beneficiaries covered at State option, who will be most affected by the HIFA Initiative, number almost 12 million individuals and comprise over 25 percent of those covered by the program.  Many of them have mental health disorders and many have incomes at or below the poverty level of $8,590 for an individual and $14,630 for a family.  Through the HIFA Demonstration Initiative, States are invited to cut benefits for this vulnerable and low-income optional population, without any requirement that the resulting savings be invested in expanding coverage to otherwise uninsured individuals. 

In light of the fact that one in every five Americans experiences some type of mental disorder each year and one in ten children have a serious emotional disorder, mental health services should be a part of any health benefits package.  Thus, we are very concerned that documents issued by the Department of Health and Human Services (DHHS) regarding the HIFA Initiative seem to encourage States to reduce and even eliminate coverage of mental health services and other benefits upon which individuals with mental illness rely, including, prescription drug coverage, rehabilitation services, other practitioner services (e.g., treatment by psychologists and therapists), and case management services. 

Descriptions of the basic services that must be provided to optional Medicaid populations and any newly covered expansion populations make no mention of mental health services.  In fact, although benefit packages for optional populations are to be based on the State Children’s Health Insurance Program (SCHIP) benefit package options, the HIFA documents pointedly exclude a provision from the SCHIP statute that requires some coverage of prescription drugs and mental health services.  Regarding benefit packages for expansion populations, the DHHS documents state that at a minimum states must provide basic primary care which is defined as services furnished by a general practitioner, family physician, internal medicine physician, obstetrician/gynecologist, or pediatrician.  This description of fundamental benefits again fails to recognize mental health care and substance abuse treatment as critical elements of primary care.

Many of those individuals who will be affected by the HIFA Initiative have severe mental disorders and many are working to overcome the double burden of mental illness and substance abuse.  Without appropriate treatment, they are often unable to work up to their full potential and must rely on Medicaid to cover the therapeutic services, medication, and other healthcare they need.  We urge you to ensure that adequate access to mental health and substance abuse treatment are considered issues of highest priority when reviewing HIFA waiver applications.

We are also concerned that individuals with disabilities, including those with mental illness, will be particularly impacted by benefit cuts under HIFA waivers due to their intensive service needs.  In keeping with the President’s New Freedom Initiative and the Supreme Court’s decision in Olmstead v. L.C., we urge you to take all necessary steps to limit any proposed increases in cost-sharing or reductions in benefits that may prevent individuals with disabilities from accessing the supports they need to live in their communities. 

To ensure that these issues are adequately considered prior to Departmental approval of HIFA demonstration applications, we further urge you to notify the public of HIFA waiver applications as they are received by the DHHS and provide an opportunity for meaningful comment.  Although States have been required to provide public notice of their section 1115 waiver applications prior to submission to the DHHS, this requirement has not been adequately enforced in the past.  Consumers and other concerned citizens can bring important perspectives to any discussions regarding changes to the benefit structure of the Medicaid and SCHIP programs.  We trust that you recognize the importance of consumer and public input and will strongly enforce the requirement that States provide adequate notice and opportunity for comment on any waiver applications prior to their submission and that you will provide an opportunity for public input after waiver applications are received by the Department.

Thank you for your consideration of these recommendations.  If we at NMHA can provide additional information, please call upon us.

Sincerely,

Michael M. Faenza, MSSW

President and CEO