House Subcommittee Approves FY 2014 Budget for Community Health

 Full report in PDF

On March 20, the House Appropriations Subcommittee for the Department of Community Health approved its version of the Fiscal Year 2014 budget. Overall, the Subcommittee did not support programs recommended by the governor to improve the health status of Michigan residents. Of critical importance, the Subcommittee did not support the governor’s recommendation to accept federal funds to expand eligibility for the Medicaid program.

The Subcommittee also did not support expanded funding for key initiatives recommended by the governor including the Healthy Kids Dental program, infant mortality reduction initiatives, mental health and substance abuse service improvements for veterans, mental health innovation grants for high risk children and youths, or Health and Wellness initiatives. Subcommittee initiatives included in the budget are increased funding for the Nurse Family Partnership and pregnancy and parenting support projects.

The House Subcommittee’s budget includes $15.3 billion in total funding for the Department of Community Health in Fiscal Year 2014, a 2% increase over current year funding, but 8% below the Governor’s recommended budget for Fiscal Year 2014.

Included in the House Subcommittee budget are the following:


Medicaid expansion:

    • Governor: The governor’s budget includes 100% federal funds to support the expansion of Medicaid coverage to very low-income parents and childless adults up to 133% of the federal poverty level. This influx of federal revenue would increase total Medicaid funding to $12.3 billion, and result in savings in the state’s General Fund of $206 million by allowing the state to use federal funds to provide comprehensive services to a population that is currently eligible for very limited state funded health benefits. The governor recommended that half of the savings in state funding ($103 million) be deposited in a newly created healthcare savings fund, with the remainder used to expand the Healthy Kids Dental program and other state services.

The expansion would increase the number of Michigan residents covered by Medicaid from approximately 1.8 million to 2.2 million, reducing the number of uninsured adults by 46%.

    • House Subcommittee: The Subcommittee rejected the governor’s recommendation to accept Michigan’s share of federal funds to expand healthcare coverage to 320,000 low-income parents and individuals through the Medicaid program, likely forcing many to remain uninsured, reducing access to primary care, and increasing costs through emergency room care.

Healthy Kids Dental:

    • Governor: The governor included $11.6 million ($3.9 million in state General Funds) to expand the Healthy Kids Dental program to 70,500 children in three counties: Ingham, Ottawa and Washtenaw. With this expansion, 50% of eligible children statewide would be covered in Fiscal Year 2014, and the governor indicated his intention to expand the program to an additional 100,000 children in Fiscal Year 2015.
    • House Subcommittee: The Subcommittee rejected the governor’s recommendation.

Graduate medical education:

    • Governor: The governor’s budget cut the one-time funding for the Graduate Medical Education program by $4.3 million. These funds are used by teaching hospitals to offset the costs of operating medical residency programs for physicians, and to provide care to uninsured and other vulnerable populations in hospitals and clinics.
    • House Subcommittee: The Subcommittee reduced funding for Graduate Medical Education by a $2.7 million, leaving $1.7 million in one-time funds.


Medicaid expansion:

    • Governor: The Medicaid expansion endorsed by the governor in his Fiscal Year 2014 budget would include comprehensive mental health services.
    • House Subcommittee: By rejecting the Medicaid expansion, the Subcommittee’s budget denies comprehensive mental health services to an estimated 320,000 Michigan residents, forcing them to go without needed services, be added to a waiting list for services, or receive services through the corrections system.

Mental health innovations:

    • Governor: The governor included $5 million in one-time General Fund dollars for mental health innovations, including: (1) comprehensive home-based mental health services for children to reduce child hospitalizations and strengthen families ($2.5 million); (2) a pilot program to address the needs of youths with complex behavior disorders ($1 million); and (3) mental health “first aid” training for a range of public and private groups, including law enforcement officers, to ensure that they can identify mental health problems ($1.5 million).
    • House Subcommittee: The Subcommittee rejected the governor’s recommendation.

Mental health services for special populations:

    • Governor: The governor reduced funding for mental health services for special populations from $8.8 million to $5.8 million, a cut of 34%. Included in the cuts are the Hispanic/Latino Commission, ACCESS, Arab/Chaldean services, the Chaldean Chamber Foundation, and the Michigan Jewish Federation.
    • House Subcommittee: The Subcommittee concurred with the governor.

Jail diversion initiative:

    • Governor: The governor redirected $1.6 million in state funds currently used by psychiatric hospitals to a new jail diversion initiative that will enhance current diversion efforts for individuals with mental illness, emotional disturbances, or developmental disabilities within five Michigan communities.
    • House Subcommittee: The Subcommittee concurred with the governor’s recommendation, adding language that gives priority to county sheriffs and community courts, specifying the St. Joseph County Sheriff and the 36th District Court community court project.

Mental health and substance abuse services for veterans:

    • Governor: The governor recommended $60,000 to improve mental health and substance abuse services for veterans and their families, including training and credentialing for community mental health and substance abuse programs, co-location with services provided through the Veterans Health Administration, and training for law enforcement officers in recognizing post-traumatic stress disorders.
    • House Subcommittee: The House Subcommittee rejected the governor’s proposal.

Services for persons with chronic mental health conditions:

    • Governor: The governor included $900,000 for three “behavioral health home” demonstration projects for Medicaid recipients with chronic mental health conditions. The model coordinates physical and mental health care, including comprehensive case management, family education and service referrals. The demonstration projects would be located in the Washtenaw area (Washtenaw, Livingston, Lenawee and Monroe counties), Northern Michigan (21 counties), and either Saginaw County or the Genesee region.
    • House Subcommittee: The Subcommittee concurred with the governor’s recommendation.


    • Governor: The governor recommended $3 million for competitive grants to address emerging healthcare and service delivery system issues and needs, encourage innovation in service delivery, and build partnerships between the public and private sectors.
    • House Subcommittee: The Subcommittee rejected the governor’s recommendation.


Local public health services:

    • Governor: The governor recommended no changes in funding for local public health essential services, which are funded at $37.4 million in the current fiscal year.
    • House Subcommittee: The Subcommittee included current funding of $37.4 million, but added a $100 placeholder to ensure a point of difference for later legislative debates, indicating an interest in a possible restoration of funding for local public health departments.

Health and Wellness Initiative:

    • Governor: The governor’s budget removed $5 million in one-time state funding available in the current year for Health and Wellness initiatives, and then increased ongoing funding by $1.5 million, bringing total funding to $8.7 million–a net reduction of $3.5 million or 29%. The largest cuts in the governor’s budget include the elimination of funding for cancer prevention and control ($862,500), an 87% cut ($750,000) in the pregnancy prevention program, and a 44% cut in both the 4×4 wellness program ($1 million) and cardiovascular health programs ($317,500). Also reduced are the diabetes and kidney programs, health disparities, the Michigan Care Improvement Immunization Registry, the Michigan Model for school health, and smoking prevention programs.
    • House Subcommittee: The Subcommittee concurred with the reduction of the one-time funding of $5 million, but rejected the additional $1.5 million in ongoing funding, resulting in total recommended funding of $7.2 million, or a reduction of 41% in the Health and Wellness Initiative. The Subcommittee eliminated funding for the 4×4 wellness program, and took additional cuts in cardiovascular health and smoking prevention programs.

Infant mortality reduction:

    • Governor: The governor included $2.5 million in state funds to implement recommendations in the Infant Mortality Reduction Plan, including regional perinatal care, initiatives to reduce medically unnecessary deliveries before 39 weeks, the promotion of safe sleep practices for infants, and expanded home visiting programs. Medicaid currently pays for 51% of all Michigan births, and Michigan ranked 36th in the country in infant deaths in 2012, with infant deaths rates that are three times higher for African American babies.
    • House Subcommittee: The Subcommittee rejected the governor’s recommendation.

Home visitation programs:

    • Governor: The governor’s budget did not include new funding for home visitation or parent support programs. During last year’s budget cycle, the Legislature approved $2 million for a home visitation and support program that promotes childbirth and adoption, as well as an additional $1 million for the Nurse Family Partnership program. The governor vetoed both budget increases.
    • House Subcommittee: The Subcommittee included $350,000 in state funds for the Nurse Family Partnership program, a 4% increase, as well as $700,000 for a new pregnancy and parenting support pilot project. Budget language indicates that the Nurse Family Partnership funding is to be used to improve training and support for nursing teams, recruit families in high-need communities, and plan and market a program in Detroit. The goals of the pregnancy and parenting support pilot are to promote childbirth choice, educate parents about adoption options, improve parenting skills, and provide abstinence education. Counseling, support and referral services would be available to women during pregnancy through 12 months after birth.