ATLANTA — Every day he’s without his meds, Scott Patrick’s demons return: the urge to get high to forget that he’s dying of AIDS; the anxiety, paranoia, and phantom noises spurred on by his bipolar disorder and PTSD.

Patrick, a former male prostitute and recovering drug addict, was released from a Georgia jail last month without any of his medications on hand. “I could die dirty or die clean,” he said. “I want to die clean.”

So like many struggling Atlantans with nowhere else to go, Patrick sought treatment at Grady Memorial, the state’s largest safety net hospital. He carried all his worldly possessions with him: a change of clothes, a Bible, and some vitamin C drops.

The partisan war over Obamacare is now threatening the mental health services that Patrick and countless others are seeking. The president’s health care law cuts federal subsidies to safety-net hospitals that were expected to have more paying patients under the law’s Medicaid expansion and insurance exchanges. But Republican-controlled states like Georgia have refused to go along with the expansion. That’s turned safety-net providers like Grady into unintended casualties—and mental health services for Georgia’s most troubled residents are first on the chopping block.

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It was never meant to happen this way. States like Georgia, which has the nation’s sixth-highest uninsured rate, were supposed to be the biggest beneficiaries of the new Medicaid dollars. But in 2012, the Supreme Court unexpectedly ruled that the federal government couldn’t force states to accept the expansion.

Along with 22 other states with Republican governors or statehouses, Georgia Gov. Nathan Deal has refused to go along with the Medicaid expansion, saying the cost to the state would be untenable. Democrats counter that it’s a cruel political stunt, since the cost of new coverage is overwhelmingly paid for by the federal government.

So safety-net hospitals like Grady are now caught in the middle: they aren’t getting new Medicaid funding, yet they’ll see a cumulative $18 billion reduction in federal payments by 2020.

Grady alone expects to lose $45 million in annual federal subsidies by 2018 because of Obamacare. At the same time, it’s losing the opportunity to gain $25 million a year in new revenue because of Georgia’s decision to opt out of the Medicaid expansion, which the hospital says would cover 30,000 of its patients. Grady is also facing immediate reductions from the county government, which helps foot the bill for its uncompensated care. Fulton County has proposed to reduce its funding to Grady from $50 to $25 million, and it’s expected to come to a final decision on Friday.

As the fiscal pressures mount, mental health services for low-income residents are especially vulnerable to cutbacks. On an annual basis, “the mental health department leaves us $8 million in the hole,” says John Haupert, Grady Hospital’s CEO. “As a business decision, that lands it on the list.”

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Patrick ditched the clothes they gave him first: white button-down, brown pants, and black sneakers. All standard-issue for released convicts in the area, marking him as a man who had done time.

He then headed to an overnight shelter, avoiding the part of town where everyone knew him as “Peanut”—the slight guy with light brown hair who was often strung out on drugs and always slept in Piedmont Park.

But there was one thing Patrick missed from his year behind bars: the medication he was given for mental illness. “I want to feel like I did when I was in jail—a level mood,” said Patrick, who was locked up most recently for entering a car with the intention of stealing it.

When he showed up at Grady in late December, it was the first time Patrick had ever sought mental health care on his own. He’s now one of thousands of new patients to flood the hospital just as major budget cuts are looming.

Mental health visits to Grady’s emergency room spiked 20% in 2013 on top of a 20% rise in 2012, Haupert says. If a hospital or other major provider closes in the state, chances are that Grady will get at least some of the overflow.

Georgia’s prison system is still the state’s single biggest provider of mental health care, but Grady is number two, logging more than 68,000 visits in 2013. The police drop off so many mental-health patients there every day, “you’d almost think they were another ambulance service,” said hospital spokesperson Denise Simpson.

Patients pack the emergency room at all hours, some of their ailments visible, others not: the short elderly woman talking and gesturing angrily to herself for hours; the young man weeping uncontrollably, unable to walk unassisted from the triage area to a chair. “They’re gonna call you,” a hospital attendant told him as he curled into a ball. “You’re gonna have to do the best you can.”

Some will wait as long as 36 hours to get treatment, like Eric, 48, who suffered from uncontrollable panic attacks after a stranger threatened to kill him, holding a gun to his head while shouting racial epithets. In the hallways, psychiatric patients may wait days to be transferred to a bed, lying on gurneys without treatment. Security guards make the rounds to usher out the homeless just looking for somewhere to wait out the cold. Nearly everyone in the room is African-American.

Like other hospitals, Grady is trying to reduce the burden on its overloaded ER and cut back on costly psychiatric beds. Haupert says one likely target for cutbacks is inpatient care, which has been falling out of favor for decades as hospitals have scaled back their old-fashioned psych wards. In Georgia, the state-run mental hospitals were so abusive and poorly run that the US Attorney filed suit, forcing the state to close them after a 2010 settlement.

Grady itself hasn’t been immune to serious management problems. The hospital nearly closed in 2007, when it was facing a $55 million budget gap and reports of subpar care. It’s since turned itself around and returned to solvency after being privatized, even turning a $27 million profit in 2012 and raising $680 million in operating revenue last year. But about 32% of the patients Grady treats are still uninsured, leaving the hospital heavily dependent on outside funding.

Grady currently receives $90 million a year from the federal government for serving a high number of low-income, uninsured, and Medicaid patients—a subsidy that Obamacare will eventually cut in half. In addition to $50 million from Fulton County, the hospital got $11 million from DeKalb County, which recently threatened to cut its funding as well. Other safety-net providers have faced an even bigger crunch: budget shortfalls forced three of Georgia’s public hospitals to close last year, forcing patients to travel long distances to get medical care.

Georgia providers aren’t alone: public hospitals have also closed in North Carolina and Virginia, both of which declined the Medicaid expansion, and cutbacks are on the horizon for others. ”Our concern—especially in the absence of a Medicaid expansion—will be more pressure on psychiatric beds,” says Joseph Parks, medical director of the Mental Health Department in Missouri, another GOP-controlled state refusing to expand the program. Elsewhere, hospitals warn that cancer treatment and infant care are at risk of being scaled back, and some are already laying off employees.

In Atlanta, the looming cuts are particularly worrying to advocates for the city’s poorest. They stress that access to mental health care at Grady is critical to keeping troubled residents off the streets and out of prison. “If you’re trying to end a person’s homelessness, and you don’t address their mental illness, you lose the battle,” said Protip Biswas of United Way Atlanta.

There is already a cautionary tale an hour north of the city, in Rome, Georgia. After the state shuttered its mental hospital there, community-based services were supposed to fill in the gap. But the number of inmates with mental health issues at the local Floyd County jail has skyrocketed from 20 to 115 in the past year, which the sheriff attributes to the rocky transition.

Back in Atlanta, Patrick is terrified he’ll backslide without receiving proper treatment. He says he feels hopeless, anxious, and sometimes hears voices without his meds—feelings that have previously led him to commit crimes and abuse crack, cocaine, and meth.

During one bout of paranoia, he violently carjacked a man. “I busted his head open,” he said. “I thought he was out to get me.”

These days, Patrick’s face is gaunt from his mental and physical ailments. “I’m seriously dying. I’m dying every day more and more,” he said. But he’s still determined to go back to Grady to get help. “I want to die happy. I don’t want to be known to be mean to people,” he explained. ”When I’m on my medication, I’m normal. I don’t want to do things.”

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Advocates have rallied around Grady as cuts loom, lobbying both Fulton County and Gov. Deal, whose gold-domed office is just a block away from the hospital in downtown Atlanta. They point out that by accepting Obamacare’s proposed Medicaid expansion, an estimated 400,000 Georgia residents would become eligible for the program, which currently does not cover non-disabled, childless adults.

That would mean revenue from thousands more patients at Grady, which supports the Medicaid expansion, as does Georgia’s biggest hospital advocacy group. It would also mean more effective treatment for the mentally ill in particular. A recent study published in the New England Journal of Medicine found that Medicaid does not actually improve the basic physical health of enrollees, but it does improve their mental health, lowering depression rates by 30%.

Deal, who is up for re-election this year, has said that safety-net hospitals need to be put on firmer financial footing. But like many other GOP governors, he argues the Medicaid expansion is an unjust burden for state governments, which must pony up 10% of the cost after 2016. “We’re not going to put taxpayers on the hook for any more entitlement spending,” says Deal spokesman Brian Robinson.

Ultimately, Deal believes the hospitals’ predicament is the ACA’s fault. “We think the administration is putting hospitals in a very bad spot. The state of Georgia is not changing its policies—the federal government is changing its policies,” says Robinson. Instead, Deal believes the federal government should simply block-grant the money to the states instead of tying it to Medicaid.

Haupert, Grady’s CEO, acknowledges that the Medicaid expansion is no panacea: there’s already a severe nationwide shortage of mental-health providers, and a flood of new patients could make it even harder to find treatment. Other hospitals are concerned that patients who get minimal coverage through Obamacare’s insurance exchanges will have larger out-of-pocket expenses they can’t afford to pay, increasing hospitals’ bad debt.

A little relief has come to Grady amid the Obamacare showdown: under pressure from hospital advocates and Rep. John Lewis, a Democrat who represents much of Atlanta, the White House and Congress quietly agreed to delay the subsidy cuts by two years. The cuts will begin in Fiscal Year 2016 instead of FY 2014, although they will be doubled the first year they take effect.

But the delay simply buys safety-net hospitals a little more time to fight for a more permanent solution. And the Obama administration insists the Medicaid expansion is still the ultimate answer. By refusing to participate, Republicans are simply holding their own constituents hostage, Democrats say.

“The opportunity to serve citizens should not be examined through some partisan lens, especially when rejection of that opportunity can affect a person’s life or death,” Lewis said last year, blasting Gov. Deal for his “reckless disregard” for poor Americans.

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Some mental-health experts argue that hospitals like Grady are getting too much money already, bloated with funds that are being wasted on ineffective care. “Georgia is the primary example of a system where the problem is way too many hospital beds and too much money spent on hospitals,” says Ira Burnim, legal director at the Bazelon Center for Mental Health Law.

Instead, Burmin believes more resources should go to community-based treatment, like local crisis centers that can respond to mental-health emergencies. Grady has opened up outpatient clinics in the Atlanta metro area and embraced a new approach called Assertive Community Treatment (ACT), which sends caseworkers to visit patients with serious mental illness in their homes.

One patient is Shantel Murray, who was hospitalized after a breakdown a year ago. Since her release last spring, an ACT team has come multiple times a week to check on her, and she hasn’t had a serious episode since. “I’m fine with the voices because I ignore them,” she says.

However they get there, Atlanta’s advocates for the poor are simply hoping the safety net will hold.

After three aborted attempts to see a doctor at the ER, Patrick was finally referred to one of Grady’s outpatient clinics to get back on his meds. But he still needs to bring himself to go there, with his old life of beckoning to him every day.



“I’m ten minutes down from where I did wrong,” he said, waiting for a bed at the shelter. “It’s a mental health problem being on the street.”