Mental health funding changes force county cuts

DES MOINES, Iowa (AP) - Changes to Iowa's mental health system have left counties short of money and forced some to drop mentally disabled people from programs.

County officials blame a new state law that shifts control over Medicaid-funded mental health services from counties to the state. The change is part of larger reforms of Iowa's mental health care system designed to make services more uniform, in part by taking control away each of Iowa's 99 counties.

In the past, counties used local property taxes and state money to fund their part of Medicaid, a federal program that pays for medical and other services for low-income people. Many are elderly or have disabilities.

For individuals who don't meet federal Medicaid qualifications, some Iowa counties have long been the safety net of last resort. They have helped people with mental health issues, brain injuries, or certain developmental disabilities that would otherwise fall through the cracks.

Because the state will now control payment of Medicaid expenses, counties that have co-mingled Medicaid funds with other revenue worry that they won't have the money to continue services at previous levels.

At New Perspectives Inc. of Sioux City, the expected loss of funding beginning July 1 will mean mentally disabled workers will lose their jobs repairing metal clothes hangers for a uniform company and packaging fishing tackle.

Molly Hildebrand, the organization's director of consumer services, said the jobs provide money but also give workers a sense of being productive.

"Some of our people are in their 40s, 50s and 60s and have been working at some sort of small job their entire lives," Hildebrand said. "Now they're being told, we're sorry we can't provide those services anymore because the money's not there."

Hildebrand's program, which is among several in the county, must reduce its workforce from 60 to 30, and those remaining will see their hours cut in half.

In Burlington, John Hager is worried that his daughter, Ginnie, will lose her job and her group home apartment operated by a nonprofit group, the Hope Haven Area Development Corp.

Ginnie, 33, has a seizure disorder. She lives in her own apartment and works tagging and sorting clothing at a local store.

Hager, a 64-year-old retired heating and air conditioning installer, said Hope Haven has provided peace of mind that she has needed medical support and activities that encourage socialization.

A Des Moines County worker called Hager about two weeks ago to tell him the state changes could mean a funding cut for his daughter's program.

Last week, however, a consultant with the Iowa Department of Human Services met with county officials and concluded they would have enough money to maintain current programs.

The county will have to place new applicants on a waiting list to avoid adding new costs, and it must delay paying some state bills until October, when the county will begin receiving money from a mental health levy, said Ken Hyndman, the county's director of community services.

Hyndman said he's still worried about funding.

"I'm not confident we'll get through the whole fiscal year," he said. "I'm not as confident as the state DHS people are."

Hager fears the money could run out for his daughter.

"There's no assurances whatsoever there's going to be funding for her," he said.

Bob Bartles, Hope Haven's executive director, said he's relieved that people are not going to be forced out of their homes or jobs now.

"I will feel comfortable if we're a couple or three months into the fiscal year in the county and the state's analysis does prove correct and the county extends support through the rest of the fiscal year," he said.

Rep. Lisa Heddens, D-Ames, said Story County will cut services on July 1 and will hold back about $1 million worth of payments to the state just to get by. It's also starting waiting lists.

Heddens, who has a son with Down syndrome, said she understands what the assistance programs mean to families. She said she fought hard to ensure state money was set aside to help counties get through the transition as the state makes funding changes. She said legislative leaders told her money would be budgeted, but in the end it wasn't.

"Not to have those additional dollars there is heartbreaking to me because I know these families that are going to be cut from services," she said.

Rep. Renee Schulte, R-Cedar Rapids, helped push the mental health reform bill through the Legislature and said the counties struggling with funding now would have faced problems anyway.

Some counties were spending Medicaid dollars in ways the federal government was going to stop. That's a big reason the state is taking over the program, Schulte said.

"They have to make choices to live within their means based on the money they have for non-Medicaid services," she said. "How they choose to get there is up to them."

Schulte said part of the problem was that the state and counties were relying on one-time federal economic stimulus dollars that were never intended to be ongoing.

Iowa Department of Human Services Director Chuck Palmer said his department estimated a year ago that counties would lose up to $65 million this year in Medicaid funding after the stimulus money ended.

Lawmakers budgeted $40 million for the Medicaid program to ease the funding drop, but Palmer acknowledged there will be an impact.

"There will be some adjustment in local delivery," he said. "Hopefully it won't be as drastic as some counties are portraying it."