Those in the know say the Ryan proposal to turn Medicaid into block grants to states would be a disaster for some. But as a liberal, I believe It could be a giant step forward for people with serious mental illness. 

 Medicaid--as it is now--is the largest reason people with serious mental illness can't get care. It is the single biggest reason there are so many homeless psychotic individuals abandoned on the street eating out of dumpsters.   As I wrote in the Washington Post, and my very first HuffPo story, if you are between 18 and 65 and have a disorder in any organ other than your brain, and need long-term inpatient care, Medicaid reimburses states for half the cost. But if someone has a serious mental illness like schizophrenia, and needs long-term inpatient care, Medicaid refuses reimbursement.

Since the states can't get reimbursed for hospitalization of seriously mentally ill, they lock the front door of the hospital and open the back, discharging psychotic patients sicker and quicker.  Hence the homeless mentally ill. The next stop for many is jail or death. Meanwhile, because Medicaid will reimburse for community care, the worried-well who need counseling (versus the seriously psychotic who need hospitalization) find a cornucopia of services that cater to their every 'issue'.

Refusing to pay for mentally ill who need inpatient care is part of Medicaid's Institutes for Mental Disease (IMD) Exclusion and represents federally mandated discrimination against the seriously mentally ill. 

The Ryan proposal would free the block grants of federal regulations and allow states to use the funds as they see fit. For example, for inpatient hospitalization of the seriously mentally ill who need it and community services for those who don't.

DJ Jaffe is founder of Mental Illness Policy Org. http://mentalillnesspolicy.org ;