States Cut Mental Health Budgets As Demand Increases

More than half the states have cut their mental health budgets since the recession hit home, while the economic slump has pushed up demand for such services, according to a new report from the National Alliance on Mental Illness.

Largest Percentage Cuts to State Mental Health Budget FY 2009-2012
South Carolina 39.3%
Alabama 36.0%
Alaska 32.6%
Illinois 31.7%
Nevada 28.1%
DC 23.9%
California 21.2%
Idaho 17.9%
Kansas 12.4%
Mississippi 10.4%
Source: National Alliance on Mental Illness

General funds for mental health — excluding funds brought in through Medicaid and other federal programs — are down $1.6 billion overall between fiscal year 2009 and fiscal 2012, a period when 28 states plus D.C. reduced mental health outlays.

That’s actually a slight improvement from the $1.8 billion slide that NAMI reported through FY 2011. Thirty states  increased their budgets for FY 2012, but “these increases do not mitigate the damage that has been done,” the NAMI report noted.

Between FY 2009 and FY2012, four states — South Carolina, Alabama, Alaska and Illinois — cut their mental health budgets more than 30 percent. Ten others reduced their budgets by more than 10 percent.

“Mental health treatment in this country is so fragile, so inaccessible and so variable that taking out that much money really staggers it,” said NAMI Executive Director Michael Fitzpatrick.

The timing couldn’t be worse, he added:  “More people are seeking mental health services than ever before” and “treatment systems have been battered by cutbacks.”

Access to services has decreased, and emergency rooms are increasingly having to deal with people experiencing a mental health crisis.

Surveys by the research institute of the National Association of State Mental Health Program Directors have found that more than a dozen states cut short-term and long-term hospital mental health treatment for adults in FY 2010 and 2011. Many states also cut crisis intervention programs and supportive housing.

Ted Lutterman, the institute’s director of research analysis, said that a survey of FY 2012 services is being conducted. Only half of the states have reported up to this point.

“What we’re seeing so far is that 2012 isn’t as bad as 2011, but still, when you take a cut on top of a cut, it just compounds,” Lutterman said. The latest survey also finds that many states underestimated the service cuts they experienced in FY 2011.

Fitzpatrick said that deficit reduction talks on Capitol Hill could put at risk the modest funding turnaround under way in some states.

According to NAMI, states like Arizona and Ohio increased their FY 2012 general mental health funds only to shift some of that money toward Medicaid recipients, because federal stimulus money had been depleted. Federal cuts to Medicaid could draw away even more mental health funds, leaving non-Medicaid recipients in need, the NAMI report warned.

This post was updated at 9:20 a.m. on Nov. 10.

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