Mental Health & The Budget

Katharine Ligon

This week, I submitted and delivered the following testimony to the Senate Finance Committee in regards to mental health funding in Texas:

My name is Katharine Ligon.  I am the Mental Health Policy Analyst for the Center for Public Policy Priorities.  I appreciate the opportunity to testify before you today, specifically to address the budget items related to mental health and substance abuse.

First, I would like to provide you with a bit of perspective about Texas spending for mental health services.  The budget cuts to state agencies in 2003 significantly affected the public mental health system and the consumers it serves.  Since, mental health funding has only increased for crisis and inpatient services while community-based services for children and adults have essentially remained the same.  As you have likely heard recently, Texas spends considerably less per capita on mental health services than any other state.  The national average for state spending on mental health services is $121 per capita; however, Texas spends almost $39 – ranked 49th.[i]  What is particularly disconcerting is Texas is so far from average per capita expenditure.

Limited community mental health funding and services creates a double-edged sword, by creating a crisis-driven system in which emergency room, jails and hospitals become the de facto mental health provider. Individuals in a mental health crisis consume a large amount of resources in a short time-frame, which is much more expensive to the state and counties.  As important as crisis service capacity is in our system, greater investment in community services is needed to reduce avoidable crises and save money.

Second, the expansion of Medicaid under the Affordable Care Act has substantial potential to positively impact individuals with serious mental illness and substance abuse disorders and, therefore, will significantly affect the state budget.  As Dr. Lakey has stated, 70% of DSHS GR is for mental health services.

Additionally, city and county officials, health care providers, economists, and chambers of commerce have noted the very large potential economic and social benefits to Texas communities if Texas accepts the federal option to expand Medicaid.  Extending Medicaid coverage would ensure ongoing coordinated care for individuals who are currently undertreated or not treated, which would reduce the local costs associated with treating individuals in the de facto systems such as E.R.s and jails costs.

Other noteworthy potential benefits for Texans with MH/SU conditions, local governments, and their communities are:

  • Foster Care:  The ACA requires Medicaid coverage (with full EPSDT[ii] benefits) for children up to age 26 who were in foster care when they turned 18 (January 2014).  This will provide a stronger continuum of care for these youth and young adults, who have much higher than average behavioral health needs.
  • Family Therapy:  In addition, a large share of parents of children in families where CPS interventions have occurred would gain Medicaid coverage and be able to access the ongoing therapies they need to break family cycles of abuse or neglect.  Today, local governments are limited to small and inadequate “pots” of funding to provide parents with services; if Texas accepts ACA Medicaid, many more families will be served effectively and counties will see savings on both the direct services and from reduced recidivism.
  • Jail cost offsets:  If Texas accepts ACA Medicaid, most inpatient hospital stays by inmates could be billed to Medicaid.  This would reduce local jail costs, and allow limited local resources to be redirected to improving continuity of MH/SU care for inmates with behavioral health conditions.

DSHS 2014-2015: Exceptional Items

The Center strongly supports all the exceptional items related to public mental health and substance abuse services.  Three exceptional items target community-based direct-care services for individuals with serious mental illness and substance abuse problems:

  • Exceptional Item #6 proposes to allocate approximately $81 million GR to address the community mental health wait lists for children and adults as well as Children with Special Needs.  This would increase the capacity of DSHS to serve 6,500  more adults and children.  Currently 5,897 adults and children are on the DSHS wait list for mental health services.  We strongly encourage acceptance by the legislature of this particular exceptional item provide the opportunity to ensure that some of Texas’ most vulnerable individuals have access to a spectrum of community services to maintain their continuity of care, which allows for better mental well-being and, therefore, likeliness of stable housing and employment.
  • Exceptional Item #7 proposes to allocate $33.5 million to increase substance abuse services particularly for parents involved in CPS, which will promote reunification.
  • Exceptional item #8 proposes to allocate $23 million to increase behavioral health treatment outcomes by establishing supportive housing for individuals in substance abuse recovery as well as expanding housing for individuals with serious mental illness who are homeless or at risk of being homeless.

Lastly, I would like for you to keep in mind that the successful future of the Texas is influenced by the public policy decisions we make today.  Mental health is an essential factor and indicator of everyone’s overall well-being and quality of life.



[i] NASMHPD Research Institute, Inc. (2012).  FY 2010 State Mental Health Revenues and Expenditures. http://www.nri-inc.org/projects/Profiles/RevenuesExpenditures.cfm

[ii] Federal Medicaid law requires comprehensive benefits without arbitrary limits to be covered for Medicaid enrollees under age 21.  The federal law is referred to as “Early and Periodic Screening, Diagnosis, and Treatment” (EPSDT), and in Texas as Texas Health Steps.

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