As four of the largest behavioral healthcare organizations in Washington state, we’re closely monitoring potential risks to funding at both the federal and state levels. The proposed budget cuts could significantly impact our organizations, the services we deliver, as well as the communities who rely on us most.
Given our position as providers, we want to keep everyone informed on the latest developments, their implications for us and the future of behavioral healthcare in our state, and share more about a key solution we’re advocating for that could mitigate the impacts.
Governor Ferguson’s proposed budget cuts: What it means for us
Governor Bob Ferguson recently unveiled his plan for $7 billion in budget cuts. As part of his proposal, he has suggested a 1.5% reduction in Medicaid rates. While this may seem like a low number, the impact on the community behavioral health system could be much larger when you consider the broader context. For example, once you factor in inflation and increases in insurance premiums and deductibles, providers could face more significant fiscal impacts.
The 1.5% reduction also does not account for separately proposed changes to special enhanced rates, long-term care rates, and others, which means we could be grappling with multiple substantial reductions.
The ripple effect: Impact on care and workforce stability
Even a 1.5% reduction in Medicaid rates would have a significant ripple effect. It would severely limit the number of services we can offer, which in turn undermines the quality of care we provide. Furthermore, these cuts would put added strain on our ability to retain and attract skilled professionals. With lower reimbursement rates, it would become increasingly difficult to offer competitive wages and maintain an adequately staffed workforce.
As a result, we could see longer wait times for clients and a noticeable decline in the overall standard of care. And the impact wouldn’t stop there. If community members are unable to access preventive and outpatient care, their health needs will escalate, leading to more severe conditions that further burden the crisis system, including first responders, emergency departments, and other hospital-based services.
We understand that much of the budgeting planning still lies ahead, and we’re hopeful that these practical implications will be considered as Washington state’s budget is finalized.
Federal level risks: What’s at stake
The situation at the state level is compounded by what’s happening at the federal level, where there are still many unknowns. What we do know is that sweeping proposals to reduce Medicaid spending could have far-reaching consequences for the work we do here in our state.
One proposal that raises serious concerns is the reduction of the Federal Medical Assistance Percentage (FMAP). If enacted, this would shift the entire financial burden onto states, forcing them to rely solely on Medicaid rates – a payment structure that, based on our experience, has proven to be ineffective and sustainable.
Another concern relates to proposed changes that may include work requirements for Medicaid recipients, which could limit access to essential care for vulnerable populations and exclude certain groups, such as the elderly, blind, and disabled.
Furthermore, Congressionally Directed Spending for 2025 has been cut altogether, impacting many behavioral health projects across the state.
What’s next: The need for action
There’s no doubt that challenges lie ahead. That’s why, as providers, we remain steadfast in our commitment to pushing forward.
We are working hard to strengthen our systems and services by advocating for continued momentum on statewide adoption of the Certified Community Behavioral Health Clinic (CCBHC) model, which will provide a more stable funding structure and improve access to care.
Additionally, during this legislative session, we’re asking legislators for workforce support funding to reduce the administrative burden on the behavioral health workforce and increase the number of clients receiving behavioral health support. Investing in workforce solutions for community behavioral health providers reduces reliance on Medicaid rates and the state budget.
How you can help
We invite you to support the work we’re doing to help improve and shape the future of behavioral health in Washington state. To learn more about how you can get involved – and sign up for our newsletter – click herer