Miss. forfeits $1M daily in Medicaid funds. Could they help the uninsured 77,000 battling mental illness?

By Shirley L. Smith
Mississippi Center for Investigative Reporting

By resisting Medicaid expansion, Mississippi is forfeiting more than $1 million a day that could help thousands of uninsured people with untreated mental illnesses and health care providers drowning in uncompensated costs, said state Sen. Hob Bryan, vice chairman of the Senate Medicaid Committee.

“Medicaid expansion is not going to solve the problem with mental health service delivery that we have in the state, but it would help,” said Bryan, D-Amory. “More people would be able to get services because they would have some ability to pay for them, and they would be able to get services more quickly before they are in terrible shape.”

Renewed discussions about expanding Medicaid are coming at a time when a federal court ruling in September slammed the state for over-institutionalizing people with mental illness by failing to provide adequate community-based services.

Mental Health America’s 2020 annual report shows there are 77,000 uninsured Mississippians with a diagnosable mental, behavioral or emotional disorder.

Because many uninsured people with mental illness do not receive treatment, their conditions worsen, and they risk becoming disabled, said Debbie Plotnick, Mental Health America’s vice president for mental health and systems advocacy. “They also have repeated cycles of crisis, and they show up in the emergency room or worse yet the criminal justice system.

“When we think about diversion, we only think about diverting people with mental illness from jail. What we need to do is divert them from disability. And, the way to do that is to give them treatment and services before they become disabled,” Plotnick said.

Health care providers, who derive substantial revenues from Medicaid, say expansion would also alleviate the financial hemorrhaging of Mississippi’s regional Community Mental Health Centers and hospitals that are saddled with the burgeoning costs of caring for uninsured individuals unable to pay their bills.

 “We have had hospitals that have discontinued providing inpatient psychiatric services, because a lot of their patients were uninsured adults for whom they received no payment,” said Richard Roberson, general counsel and vice president for policy and state advocacy for the Mississippi Hospital Association, which represents 114 hospitals.

“Hospitals across the state absorbed $660 million in uncompensated care costs in 2018,” Roberson said. Five of Mississippi’s rural hospitals have closed partially because of uncompensated care and four of them have filed for bankruptcy.    

Compromise plan straddles political divide

Roberson has spent the past several months traveling the state to garner support for the hospital association’s plan to expand Medicaid through a special waiver that would not cost the state a dime. While the federal government would have to approve the waiver, the state Legislature must first give its OK. Roberson said the plan is a “good health care policy” that addresses the concerns of both Republicans and Democrats.

Medicaid expansion, a major component of the Affordable Care Act, allows states to broaden their Medicaid eligibility requirements to provide health insurance to nondisabled adults shut out of the federal-state program because they are not poor enough or sick enough, Plotnick said.

While Medicaid expansion is a highly partisan issue, some red states, like Indiana under then Gov. Mike Pence, have adopted it through a waiver that gives states more flexibility of how to design their program, such as a work requirement. Roberson said the association’s plan is modeled after the Pence program in Indiana.

Contrary to misconceptions, most Medicaid recipients work and most of the individuals who would benefit from Medicaid expansion are working adults with low incomes, one-third of whom are struggling with mental health conditions, Plotnick said.

Most of these individuals are working in low-income jobs, but their employers do not offer health benefits and they cannot afford to purchase insurance, so they are left without any options for insurance, she said. 

Plotnick also pointed out that Medicaid allows people unable to work because of their medical condition to attend to their medical needs so they can gain employment and keep their jobs.  Medicaid beneficiaries do not receive any money.

Data from the Kaiser Family Foundation show the majority of Medicaid enrollees in Mississippi, 55 percent, are working adults with low-incomes, and 68 percent of Medicaid expenditures go toward caring for the elderly and people with disabilities

Mississippi is one of 14 states that have not expanded Medicaid, Kaiser officials said. 

The political divide over Medicaid has been evident in Mississippi’s gubernatorial race.  Republican candidate Tate Reeves, who did not respond to requests for an interview, staunchly opposes expansion of what he calls Obamacare. Attorney General Jim Hood, his Democratic opponent, supports the hospital association’s plan.  

In a statement, Hood said: “In states that have (expanded Medicaid), those suffering from mental health issues receive treatment, services and medication in higher numbers than those like Mississippi that have not accepted federal assistance.” 

Bryan calls the state’s failure to expand Medicaid “one of the most illogical public policy decisions that I’ve ever heard tell of.” 

“It’s more important for the politicians to denounce Obamacare than it is to try to figure out what to do to help people.”

Medicaid no quick fix for ‘antiquated’ mental health system

Senate Medicaid Committee Chairman Brice Wiggins, R-Pascagoula, said expanding Medicaid would not fix Mississippi's "antiquated," poorly coordinated mental health system. It would only be putting more money into a bad government structure that rewards those who benefit from the current system.

“The infrastructure that was built up over time was built when the standard of care was to institutionalize people, so the dollars that are appropriated and requests made of the Legislature rewards that,” Wiggins said. “The Legislature has not taken a forward-thinking approach and implemented policies to change that.”

Rep. Jarvis Dortch, D-Raymond, supports expansion but shares Wiggins’ concerns. “We have a bad system because of choices we are making about how we deliver services and how we pay for those services. We are putting too much emphasis on institutional care. We need to put more emphasis on community-based care,” Dortch said. “We have to make a more efficient mental health system. That is better coordinated.”

Dortch, like Bryan, said he realizes expanding Medicaid will not fix Mississippi’s broken mental health system, but that it would alleviate suffering and the unnecessary incarceration and institutionalization of people with mental illness. It would also help other uninsured Mississippians.  

Based on 2017 data from Kaiser, the total number of uninsured Mississippians is 406,000. 

Bob Neal, senior economist with the state’s University Research Center, said 210,000 of these uninsured individuals would qualify for Medicaid today if Mississippi expanded its program. 

Phaedre Cole, president of the Mississippi Association of Community Mental Health Centers, said she supports expanding Medicaid, because it would not only improve access to preventative and maintenance care for people with mental illness, but “it would ultimately reduce the reliance on the more expensive emergency mental health services.”  

The Community Mental Health Centers are also losing money from uncompensated costs. “Collectively, the Community Mental Health Centers provide $33 million of indigent care a year. We here at Region 6 provide $4.3 million, so we do things on a shoestring budget, and it makes it difficult to expand and grow services,” said Cole, who also serves as the executive director of Life Help. The community center is in Region 6, which serves 10,000 people in 12 counties primarily in the Delta, one of the state’s poorest and most rural areas.

Cole said Medicaid expansion would also provide the additional funding the centers need to comply with the federal court order to increase community-based services. The court ordered state officials to work with a special master – a person appointed by the court to make sure judicial orders are followed – to expedite the development of more community-based services and eliminate disparities in the system. 

However, Medicaid expansion is only part of the solution, Cole said. “We also need increased state funding and increased reimbursement rates from Medicaid.” 

Policy analysts at Kaiser said a review of more than 320 studies shows Medicaid expansion has resulted in improved access to care and significant reductions in uncompensated care costs for hospitals and clinics as states’ uninsured rates dropped.  

The studies also show that states that have expanded Medicaid have seen a greater reduction in unpaid medical bills than non-expansion states and an increase in financial security among the low-income population. 

In 2015, the Urban Institute reported that Mississippi had the highest past-due medical debt in the country because of its high uninsured rate. Mississippi also has the highest percentage of families living in poverty in the nation, according to the U.S Census Bureau.

Mississippi receives about 77 percent in federal matching funds to run its existing Medicaid program, the highest match in the nation, said Hannah Katch, a senior policy analyst at the Center on Budget and Policy Priorities.

“This means that for every dollar that Mississippi spends on Medicaid, 77 cents of that dollar is reimbursed by the federal government,” Katch said. “Even without expansion, most of Medicaid’s spending in Mississippi is covered by the federal government.”  

The federal match rate is higher for the expansion population. For the first three years of the expansion program, from 2014 to 2016, the federal government covered 100 percent of the cost. States were then required to pay a small percentage. In 2020, the federal government will cover 90 percent of the cost for newly eligible individuals in the expansion population. 

“Based on a 2012 study conducted by the University Research Center, the net state fiscal burden for Medicaid expansion would be about $65 million in fiscal year 2020. Based on the state’s general fund revenue of about $5 billion, the state would be devoting about 1 percent of the general fund revenue to Medicaid expansion,” Neal said.

The annual income limit for a family of three to qualify for Medicaid in Mississippi is $5,676, Matt Westerfield, the director of communications for the state’s Division of Medicaid, said in a statement. (Officials with Medicaid and the Department of Mental Health denied multiple requests to be interviewed.) 

Currently, to qualify for Medicaid in Mississippi, adults must not only be living in poverty but also be elderly, pregnant, have a federally approved disability or have a dependent child under the age of 18, said Micah Dutro, legal director for Disability Rights Mississippi.  There are very few exceptions, he said.

Wiggins said Medicaid expansion will not address the critical shortage of physicians in a mostly rural state like Mississippi or the difficulty the state has recruiting physicians. “You can expand Medicaid, but if the infrastructure isn’t changed and a county does not have the resources and psychiatrists, you are still not going to have adequate community services.” 

Neal also cautioned that adding 210,000 individuals to the Medicaid rolls without increasing the number of doctors would lead to longer wait times for doctors and possibly physician burn-out.

Harold Pollack, a professor at the University of Chicago’s School of Social Service Administration, countered that several states, including red states, have similar problems in rural areas and they are using Medicaid expansion to help address these problems. “There are mental health provider shortages across the country,” he noted. 

Roberson said officials are being shortsighted. “The reality is, unless you have a sustainable source of funding to pay health care providers, then you will never attract physicians, nurses and pharmacists to those areas of the state which need it. In other states that have expanded Medicaid, they have been able to provide more inpatient and out-patient treatment opportunities in the community, and they have seen better health outcomes and improvement in mental health.”

‘Hands down, it would be better’

Roberson said the association’s Mississippi Cares plan would provide insurance coverage to nondisabled working adults, ages 19 to 64, who earn up to 138 percent of the federal poverty level, which in 2019 is about $17,000 for an individual in Mississippi and $35,000 for a family of four.    

Unlike the for-profit, out-of-state managed care companies that Mississippi contracted to manage Medicaid reimbursement claims, Roberson said the association’s Medicaid program would be run by Mississippi True, a nonprofit, hospital-owned corporation based in Mississippi. The program is projected to create up to 19,000 jobs.

Mississippi True had unsuccessfully vied for one of the managed care contracts and sued Medicaid in 2017 alleging the division's scoring criteria was biased against it, its score was unfairly low and that the former Medicaid director had a conflict of interest with one of the winners. The case was voluntarily dismissed. 

Roberson will introduce the plan to the Legislature in January, the start of the new legislative session. He said the program would be financed by the 90 percent in federal matching funds the association would obtain if the waiver were approved. The remaining 10 percent would be funded by increased hospital taxes and a required $20 monthly premium on beneficiaries. Some beneficiaries may pay less depending on their income level.

“The hospitals are willing to pay additional state taxes under their proposal to reduce their level of uncompensated care cost by $300 million,” Roberson said.

Beneficiaries would have to pay a $100 co-pay for non-emergency visits to hospital emergency departments if a federally qualified health center, rural health clinic or urgent care center were within 20 miles of the hospital. 

The plan also requires unemployed beneficiaries to participate in a job-training or educational program, called community engagement. Roberson said certain individuals would be exempted like the disabled and parents with preschool children.  

The association’s plan has gained support among key stakeholders. However, some have expressed concerns about certain provisions that have proven to be problematic in other states, like requiring poor people to pay a monthly premium as a condition for maintaining coverage and requiring them to participate in community engagement, which Plotnick said is a euphemism for a work requirement.

In Arkansas, the first state to implement a work requirement, Kaiser researchers found that more than 18,000 people lost coverage in 2018 because they failed to meet the work and reporting requirements. Only a few regained coverage in 2019.

Similarly, in Indiana, state data show about 25,000 adults were dropped from the rolls between 2015 and October 2017 for failing to pay their premiums. Indiana also recently implemented a work requirement program, but officials say it’s too early to know how many people would be impacted by that. 

Another provision that has some providers concern is the exclusion of non-emergency transportation services, which they say is essential because access to transportation is a problem, especially in rural areas.  

“There are components of the plan that we don’t agree with and we think would cause fewer people to enroll in coverage, but by far their proposal is better than what Mississippi has today,” said Jesse Cross-Call, another senior policy analyst at the Center on Budget and Policy Priorities  “Hands down, it would be better, because hundreds of thousands of Mississippians would gain health care coverage.” 

Dortch said he hopes everyone will work together to fine-tune the plan to improve health outcomes for Mississippians.   

Report for America corps member Shirley L. Smith is an investigative reporter for the Mississippi Center for Investigative Reporting, a nonprofit news organization that seeks to hold public officials accountable and empower citizens in their communities.

Email her at Shirley.Smith.MCIR@gmail.com.