Local mental health programs face cuts


April 3, 2014 BY MICHAEL WALTON mwalton@record-eagle.com Traverse City Record-Eagle


TRAVERSE CITY — Community mental health programs in the Grand Traverse area stand to lose millions of dollars in state funding.

Pending cuts coincide with the state’s Medicaid expansion, dubbed the Healthy Michigan Plan. Community mental health groups across the state began to lose roughly 54 percent of their state-funded general purpose money on Tuesday, the same day enrollment in the Healthy Michigan Plan opened.

State officials estimate the Healthy Michigan Plan will expand Medicaid to more than 450,000 new participants over the next two to three years, but accompanying cuts will limit local agencies’ ability to serve non-Medicaid clients, said Greg Paffhouse, CEO of Traverse City-based Northern Lakes Community Mental Health.

“I don’t think anyone wants to harm people being served,” Paffhouse said. “We also understand that if our general fund is reduced too far too quickly, we will have to give formal notice to people that we’re currently serving that we will have to suspend or terminate their services.”

Medicaid dollars comprise about 80 percent of Northern Lakes budget, which totals about $58 million. State general fund money accounts for 10 percent of the budget, and other funding sources like fees and local contributions make up the last 10 percent.

The cuts will reduce Northern Lakes general fund by about $1.4 million over a six-month period, Paffhouse said.

Northern Lakes officials made two decisions Monday to preemptively address the budget reductions.

Officials will review each person the organization serves to determine if other community providers could meet their needs. Northern Lakes also will not accept new non-Medicaid clients, expect in instances of a crisis or emergency.

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