Connecticut mental health services is expecting at least a $10 million hit in the form of cuts to state grants beginning July 1 which could result in an inability to treat everyone who needs it. Gov. Dannel P. Malloy proposed the cuts last year based on an argument that most uninsured Connecticut residents would gain new coverage options via Obamacare. However, mental health care leaders say most of their clients still don’t have health insurance and probably won’t by July 1.

According to agencies that run mental health and substance abuse clinics, even if each of their clients had insurance, they would still feel the hit because the grants help cover the loss they take from the inadequate payments they receive from Medicaid.

The mental health system is under tremendous stress,” Raymond J. Gorman, president and CEO of Community Mental Health Affiliates in New Britain told the CT Mirror. “The governor has put forward a couple of initiatives for some program expansions, but program expansions never take care of the underlying fundamentals of the system being dramatically under-resourced.”

According to the CT Mirror, Gorman said his agency would be forced to cut staff, reduce outpatient programs and do away with individual therapy if the cuts go through.

“We’re going to have to dramatically reduce the size and scope of what we do, the number of people that we serve and provide less intensive care to them,” he said.

According to reports, the Department of Mental Health and Addiction Services was already hit with the first round of cuts and may be hit with another $10 million on July 1, the beginning of the new fiscal year. The agency was able to “hide” the first round of cuts by moving money around, but will not be able to absorb the impact of the second round of cuts.

Malloy’s budget director Benjamin Barnes argues that changes in the way mental services are paid for need to be made and that they should no longer be allowed to rely on state-funded grants and Medicaid as much as they do.

According to the CT Mirror, Barnes is aware of the issues and has made a statement that he is working with the Department of Mental Health and Addiction Services to make sure the agencies have what they need to continue to provide services to people who need them.