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Cost Shift From States to Counties

Many states have delegated greater responsibility and funding for services for people with mental disabilities from state governments to local governments. These states include: Pennsylvania, Michigan, Iowa, Wisconsin, Minnesota, Oregon and California.

In Minnesota, for example, oversight for the state-operated, community-based services is provided by the Department of Human Services. The counties are the gatekeepers for patient placement which is handled by case managers. Although the state bears financial risk, the counties have the authority to contract with non-state providers for developmental disabilities services which are relevant to its resident population.

Giving local governments more authority and responsibility to serve people with disabilities can result in services that are more responsive to and appropriate for local residents, but it can also mean new financial burdens and risks for local governments. While states often take primary responsibility for Medicaid-eligible persons with disabilities, counties typically must assume responsibility for indigent people who may not qualify for Medicaid — particularly people with mental illness. One area of special concern for local officials is the interaction of people with mental disabilities with the court and criminal justice systems. Local governments need to take a strong role in the design and funding of the service delivery system.

 

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