Legislative Update: Mental Health Bills Await Fall Consideration

The Pathways to Independence Act of 2003 (S. 1523) Senate IDEA bill (S. 1248) The Senator Paul Wellstone Mental Health Equitable Treatment Act (S. 486 and H.R. 953) The Family Opportunity Act (S. 622) Information on the Pharmacy Plus Medicaid Waiver from the Kaiser Commission on Medicaid Get Involved... Support the Bazelon Center. Your tax-deductible donation helps the Bazelon Center keep you informed on important developments in mental health law and policy. Not a Subscriber? Sign up now to receive action alerts and updates from the Bazelon Center.

August 13, 2003 — Congress has recessed for August, but lawmakers will resume work on major legislation after Labor Day. Priorities include funding for mental health services and reauthorization of the Temporary Assistance to Needy Families (TANF) program and the Individuals with Disabilities Education Act (IDEA). Congress is less likely to take up other important bills such as mental health parity and the Family Opportunity Act, so grassroots advocacy will be necessary to ensure their consideration.

In this update:

• Bill Addresses TANF Disability Issues
• Senate to Consider the IDEA
• Parity Awaits Consideration
• Family Opportunity Act Still A Priority
• Waiver Promotes Back-Door Caps to Medicaid Spending
• Gun Bill Likely to Resurface
• Mental Health Funding Is Mixed Bag

Bill Addresses TANF Disability Issues

Soon after Congress returns, the Senate Finance Committee may consider legislation to reauthorize the 1996 welfare reform law, which created the TANF program.

TANF recipients are three times more likely to have at least one physical or mental impairment than adults not receiving program benefits, according to several government studies. But studies also show that, since the 1996 law authorizing the program was passed, recipients with disabilities are also more likely to be dropped from the program than people who do not have disabilities — often before obtaining a job.

Prior to the recess, Senators Gordon Smith (R-OR), Jim Jeffords (I-VT) and Kent Conrad (D-ND) introduced the Pathways to Independence Act of 2003 (S. 1523). By allowing recipients to participate in mental health and substance abuse services and permitting families to care for a relative with a disability, the bill would help such recipients to be better able to work.

A House-passed TANF bill would also permit participation in mental health and substance abuse treatment, but only for three months, with an extension only if stricter work requirements are met. S. 1523 would give states more flexibility to extend the time allowed for TANF recipients with disabilities to participate in such services.

The Senate bill would also increase states’ flexibility to design appropriate work plans for people with disabilities. If enacted, these provisions could help people with mental disabilities avoid losing benefits because they are unable to comply with some program requirements. This would help TANF recipients with disabilities to become more self-sufficient.

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Senate to Consider the IDEA

The Senate recessed without voting on the special education reauthorization bill unanimously approved by committee earlier this year. Some special education advocates fear the bill could be delayed until next session.

The Senate bill (S. 1248), while less protective of students with disabilities than current law in situations involving disciplinary actions, is still much stronger than the House-passed bill (described in the Bazelon Center’s April 25 Action Alert). It encourages use of positive behavioral supports to help students with behavior problems. The Senate version also requires schools, before disciplining a student, to determine whether the offending behavior was a manifestation of the child’s disability or of the school’s failure to implement the student’s individualized education plan (IEP) or to use appropriate behavioral interventions.

In contrast, the House version would dramatically alter the IDEA’s current discipline standards, allowing schools to expel children with disabilities at will if they violate the school’s “code of conduct.” This bill would have a profound negative impact on the ability of students with disabilities to be able to benefit from education.

For more information, see our July 9, 2003 Action Alert.

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Parity Awaits Consideration

More than a year after President Bush called for an end to insurance discrimination, legislation to provide full parity between mental health and medical/surgical care still awaits committee consideration.

The Senator Paul Wellstone Mental Health Equitable Treatment Act (S. 486 and H.R. 953), co-sponsored by Senators Pete Domenici (R-NM) and Edward Kennedy (D-MA) and Representatives Jim Ramstad (R-MN) and Patrick Kennedy (D-RI), enjoys bipartisan support and is endorsed by more than 260 national advocacy organizations.

The bill would strengthen the 1996 Parity Act, set to expire at the end of this year. The 1996 law requires private health plans to provide the same lifetime and annual financial limits on mental health care as on treatment for physical conditions. S. 486 and H.R. 953 would also ban differences in the limits on outpatient sessions, inpatient days, co-payments, deductibles and maximum out-of-pocket expenses.

The legislation would apply to services for all disorders in the Diagnostic and Statistical Manual of Mental Disorders (DSM), the standard diagnostic tool for mental and emotional disorders. However, it would only apply to plans that already provide mental health benefits and are sponsored by employers with more than 50 employees.
Despite the president’s endorsement of parity — and the support for it expressed recently in the final report of the President’s Commission on Mental Health — the insurance industry’s opposition to the bill remains strong.

Family Opportunity Act Still A Priority

Senators Charles Grassley (R-IA), finance committee chairman and lead sponsor of the Family Opportunity Act (S. 622), and Edward Kennedy (D-MA) are considering committee review of the Family Opportunity Act soon after Congress returns.

The bill would extend Medicaid coverage to children in families with incomes of up to 250% of the federal poverty level (about $45,000 for a family of four), allowing families to “buy in” to Medicaid on a sliding-scale basis (not to exceed 7% of their income).

To be eligible for the benefits, children must meet the federal definition of disability. Families with employer-sponsored health insurance that contributes at least 50% of the premium must use their private insurance benefits before buying into the program. These families could then use Medicaid coverage to supplement, not replace, their private health insurance policy.

The Family Opportunity Act also provides a needed fix to the Medicaid home- and community-based waiver law. Children with serious emotional disorders who are at risk of being placed in a residential treatment center or who are receiving psychiatric services in a residential treatment center would be able to access services under the waiver. The waiver does not now fund services for such children.

The Family Opportunity Act remains a high priority for children’s mental health advocates. It cleared the Senate Finance Committee in the last Congress, but did not reach the Senate floor for a vote before Congress adjourned. The House has yet to take up the bill.

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Waiver Promotes Back-Door Caps to Medicaid Spending

In 2002, the Centers for Medicare and Medicaid Services (CMS) announced a new Medicaid waiver — Pharmacy Plus. The waiver allows states to use federal Medicaid funds to provide drug coverage for low-income seniors and/or people with disabilities with incomes too high to be otherwise eligible for Medicaid coverage.

The federal government requires that the waivers be cost-neutral, and this is achieved by a cap on total spending for any group covered by Pharmacy Plus. CMS contends that providing pharmacy benefits will keep individuals from deteriorating and needing future Medicaid services. But if savings do not materialize, the cost would come out of existing Medicaid funds.

To date, waivers — all for elderly people — have been approved by CMS in five states. These waivers cap federal funding for all Medicaid services to elderly people. A negotiated inflation factor allows total spending to increase slightly, but most of the waivers assume lower spending growth in the future than in the past five years — a rash assumption, given recent trends in healthcare costs.

Four of the states with waivers for older people —Connecticut, Delaware, Maine and New Jersey — have now applied for waivers for people with disabilities, threatening similar caps on federal dollars for necessary services for people disabled by mental illnesses.

Advocates should monitor requests for Pharmacy Plus waivers in their state and urge state Medicaid directors not to apply. Advocates in states with pending waivers can still express concern about the long-term impact on the availability of mental health services that might result from adoption of the Pharmacy Plus waivers.

More information is on the Kaiser Commission on Medicaid site at
http://kff.org/content/2003/20030515/.

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Gun Bill Likely to Resurface

A controversial bill on gun purchases is likely to be re-introduced in the Senate soon after Congress returns. Serious concerns were raised during the last Congress about the proposal, known as the Our Lady of Peace Act. Senator Jeff Schumer (D-NY) continues to sponsor the bill.

Under current law, gun dealers must check a purchaser’s background before selling a gun. Generally these checks are done through the NICS—a computerized system managed by the FBI that searches criminal records and other information to determine whether an individual is eligible under federal or state law to purchase a gun.

Using broad, stigmatizing definitions, the new bill creates incentives for states to submit to the NICS the records of certain people with mental illnesses. The list of individuals banned from buying a gun under this bill includes people “adjudicated as a mental defective or those committed to a mental institution.” The mental health records of law-abiding citizens who have been involuntarily committed or determined to have difficulty managing their own affairs would be collected, and people with mental illnesses who have committed only minor misdemeanors and have no history of being dangerous would be placed on the list of people prohibited from owning a gun.

Mental health advocates fear that this list might be used for other purposes, violating the privacy of people whose mental health records are collected. Advocates call for stronger privacy protections to reduce the likelihood of discrimination, timely removal of records after a set period and the exclusion of people with mental illnesses who have no history of violence.

For more information, see the Bazelon Center’s December 2002 Legislative Update.

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Mental Health Funding Is Mixed Bag

The House and Senate have begun work on the fiscal year 2004 spending bill that funds important programs administered by the Substance Abuse and Mental Health Services Administration’s Center for Mental Health Services (CMHS). A chart containing program totals is available here.

The House-passed bill includes a $9.5 million increase to the children’s mental health services program — slightly more than the president requested in his budget. The Senate Appropriations Committee did not increase spending for the program, which funds children’s system-of-care development and services.

Consistent with the president’s budget request, the House approved an $8.2-million increase for the PATH program for individuals who are homeless or at risk of being homeless. The Senate approved a $4-million increase.

The Senate committee also approved a $2-million increase for the protection and advocacy systems for people with mental illnesses. The House did not increase funding for the P&A program.

Budgets for other important programs were either reduced or kept at current levels. The mental health block grant was reduced by $2 million in the House and level-funded by the Senate committee. The discretionary Programs of Regional and National Significance (PRNS) lost $6.5 million in the Senate and $7.5 in the House.

Although the overall PRNS budget was cut, some components received increases. The jail diversion program received a $1-million increase in the House, but was level-funded at $6 million by the Senate. The program helps communities develop programs to divert offenders with mental illnesses into community mental health treatment. Appropriations for it (currently authorized at $10 million) have steadily risen in the last two fiscal years.

Both the Senate-committee and House bills maintain funding for consumer-run technical assistance centers at $2 million for fiscal year 2004. The Administration sought to end funding for the centers, which promote community integration through investments in self-help, recovery and peer-to-peer support.

Funding levels must still be approved by the full Senate and differences between the House and Senate levels must be reconciled before the legislation is sent to the president.

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