DISABILITY POVERTY TRAPS

Part Two: The Real Cost of Civil Commitment

This essay is informed by the work, perspectives and expertise of peer self-advocates providing services inside residential care facilities, state hospitals, and community settings across California.

In this series we are looking at how poverty traps operate in the disability community. In the last piece, we talked about poverty traps built into disability benefits systems and how people are often given just enough support to survive, but never enough to stabilize or escape poverty. These poverty traps do not stop with cash assistance programs. They also appear throughout civil commitment systems that many of us are increasingly being pushed toward as local mental health care, peer-based support, and early intervention services continue to erode.

Mental health has become more popularized in mainstream culture; we see more people seeking to have earnest conversations on the issue. It has also become more politicized -- California politicians continue to push more legislation to expand the use of law enforcement and courts to address public mental health crises. As jails and prisons become harder to defend openly, despite efforts like the 2024 passage of Prop 36 which framed carceral approaches under the guise of treatment, more forms of visible poverty and crisis are being routed into civil commitment processes, institutionalization and conservatorship. Policymakers are expanding these processes under the language of help, saying people need treatment for their severe substance use disorders, schizophrenia, or bipolar disorder, when in fact the spectrum of need is far broader, multi-dimensional, and, critically, deeply shaped by class conditions.

Visible distress that leads to civil commitment is not simply a matter of clinical evaluation or individual pain thresholds. People with money also spiral, use drugs, and experience breakdowns. But money and housing provide privacy and space to plan or come down, while poverty removes those protections and forces suffering into the open. It is this exposure that increasingly funnels poor people into civil commitment processes, processes made more punitive by the cost-of-living crisis which generates constant financial stress, housing instability, exhaustion, and isolation, then compounds that harm by imposing an additional disability and poverty tax once people are inside institutions or conservatorship.

Proposition 1

Proposition 1, passed in March 2024, restructures local mental health funding and directs billions in bond financing toward facilities and housing. However, most of the funding is distributed to facilities and other institutional settings, with little going directly to real housing for people, and Prop 1 also included cuts to services that can prevent crisis with early intervention. It was a late-stage push from Governor Newsom’s office and was advanced to the ballot by the California Legislature, which fell in line behind the governor’s proposal. It was anticipated to be a landslide victory, though in fact it was not, and was promoted as a radical and positive shift in public mental health care.

While Proposition 1 was sold as a brand new redesign of California’s mental health care system, in reality it is better understood as the latest stage in a shift that has been underway for years in the state, one that has left us with nowhere near enough local mental health care, peer support programs, or early intervention services. Most people already know this from experience.

Much of this traces back to the effects of the 2009 economic crisis, which disproportionately impacted poor and working families. For many households, it meant losing housing stability entirely or entering long-term financial precarity. In California, the financial impacts did not stay confined to housing markets but showed up across public systems, including mental health services, as counties began changing how Mental Health Services Act (MHSA) funding was used.

At an administrative level, that meant shifting toward billing structures tied to Medicaid reimbursement and more traditional forms of mental health care, since Medicaid structures services in a fairly clinical and standardized way and because these services can be sustained under tighter budgets, as counties receive federal matching funds when they operate within Medicaid structures rather than outside of them. Peer recovery services or community-defined services are often group-based and closer in structure to substance use recovery models and therefore were harder to fit into the mental health reimbursement systems needed to maximize or sustain revenue and clinically oriented jobs.

Long before Proposition 1, people were already struggling to access care and were often left cycling between housing instability, police response, short-term hospitalization, homelessness, and jails. The absence of meaningful support has been felt by families for years. For those of us who have worked in public mental health over the last twenty years, Proposition 1 did not come unprecedented, it just exposed and deepened existing cracks in the system.

Taken together with CARE Court and Senate Bill 43, Proposition 1 sits within a broader policy shift that expands the state’s capacity to supervise people’s lives and place them in facilities through psychiatric and civil systems rather than traditional criminal ones, often without meaningful treatment or support once they are inside. At the same time, the cost-of-living crisis is pushing people to the edge. As more people are forced to endure suffering in public, the likelihood of being drawn into these systems increases. Once inside, those who are already struggling financially are often pushed even deeper into economic distress.

What Institutionalization Costs

The need for institutional mental health care can be debated endlessly, but the financial costs are not debatable for those who experience them. These costs often add insult to an already harmful situation. In many cases, institutionalization allows facilities or the state to draw on a person’s income, benefits, trusts, or inheritance to help cover the cost of care, so the same crisis that led to intervention can also become financially devastating for people.

This does not only apply to long term hospitalization or institutionalization, as people can receive bills for ambulance transport, emergency room visits, psychiatric evaluations, or involuntary holds connected to crisis response. There is something deeply cruel about being pulled into a system during one of the worst moments of your life and then later being told to pay for the experience yourself.

For people receiving SSI (Supplemental Security Income,) payments can be redirected in institutional settings toward room and board, and under conservatorship or representative payee arrangements individuals may lose direct control over how their money is used or how much they receive. During longer hospitalizations, benefits can also be reduced or suspended, leaving many people with limited access to their own income even when they technically still qualify for it.

One stark example is the way California state hospitals and forensic commitment systems limit what indigent patients can keep for basic personal use, even while the state may recover far more from them for the cost of care. Indigent patients receive only $12.50 a month for personal and incidental needs, and that amount has not changed to reflect inflation or the actual cost of basic personal items since the 1970s, leaving many people without any real ability to save money, buy necessities or take part in canteen purchases.

Until recently, California could apply funds above $500 from certain patient personal deposit accounts toward the cost of care. That practice no longer applies in Department of State Hospitals facilities, but it remains in place in institutions operated by the Department of Developmental Services. People inside these systems are still losing their money while institutionalized, under different rules depending on where they are placed. Even when that money is not taken during hospitalization, the state can still bill people after they leave. A Financial Assistance Program now exists for some people who cannot pay, but the cost of institutionalization does not disappear.

The impact rarely stops with the individual alone, as families absorb the shock through credit card debt building up, bills going unpaid, increasing debt, loss of health insurance or employment, and fear of losing assets that ripples outward through entire households. These effects grow even more severe when the person hospitalized was contributing income, care, or stability to the family and community around them.

Whether continuity or recovery happens during incarceration is often debated, but what is consistently seen in practice is the financial precarity of reentry. People leave institutional settings without income, wages, or housing, and the burden shifts onto families. Without money or stable housing at release, no matter the situation, it’s very hard for things to stabilize.

Conclusion

There is still a real and necessary conversation to be had about the near-total absence of a functioning continuum of care, what meaningful recovery looks like, and the immense pressure that crises place on families and communities. But for many people, mental health cannot be separated from money, housing, and economic security. Few things intensify distress more consistently than instability and the absence of material support.

Undoubtedly, our approach to mental health care would take a fundamentally different shape if housing were guaranteed, direct cash transfers were in place, and a full behavioral health continuum of care existed. Although this is well understood by many of us, none of those things have been guaranteed by Proposition 1, Senate Bill 43, or CARE Court.

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Carolina Valle, MSW, is DRC’s Director of Power Building. She is a social worker by training with experience in public health social work and traditional public policy. Originally from Los Angeles, she is a founding member of the All People’s Health Collective.

This piece was written in partnership with the peer self-advocates at Disability Rights California. This is a unique model of care, and one of the only programs of its kind in the country. Their work supporting people navigating institutional systems, poverty, conservatorships, and mental health crises reflect the kind of support led by people in the community that too often disappears from policy conversations.

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For more reporting and accounts on medical debt and institutional billing in California mental health systems, see:

Los Angeles Times – Hospitals that pursue patients for unpaid bills will have to tell L.A. County

CalMatters - California sent a mentally ill man to a state hospital. Then it charged him $760,000

DDS Institutions:

Advocates continue to push for changes in DDS institutions, including the Porterville Developmental Center, California’s only remaining developmental center, citing concerns about the use of restraints, long-term institutionalization, and the lack of step-down placements that would enable individuals to live in the community. https://www.disabilityrightsca.org/latest-news/porterville-developmental-center-qa

For more information about DDS-operated facilities, developmental centers, and community-based services, visit: https://www.dds.ca.gov/services/state-facilities/

Resources and Citations:

California Welfare and Institutions Code §§ 5000–5550 (Lanterman-Petris-Short Act) In California state hospitals, indigent patients are individuals committed through civil or criminal court processes under the Lanterman-Petris-Short Act or related forensic statutes, who lack sufficient income, insurance, or assets to cover the costs of their care.

California Welfare and Institutions Code § 4136 provides that patients in California state hospitals who have resided there for at least 30 days are entitled to a monthly personal-needs allowance, and indigent or newly admitted patients must be provided with writing materials and postage for correspondence.

California Welfare and Institutions Code 7281 provides there is at each institution under the jurisdiction of the State Department of State Hospitals and at each institution under the jurisdiction of the State Department of Developmental Services, a fund known as the patients’ personal deposit fund. Any funds coming into the possession of the superintendent, belonging to any patient in that institution, shall be deposited in the name of that patient in the patients’ personal deposit fund, except that if a guardian or conservator of the estate is appointed for the patient then the guardian or conservator shall have the right to demand and receive the funds. Only for patients at an institution under the jurisdiction of the State Department of Developmental Services, whenever the sum belonging to any one patient, deposited in the patients’ personal deposit fund, exceeds the sum of five hundred dollars ($500), the excess may be applied to the payment of the care, support, maintenance, and medical attention of the patient. After the death of the patient, any sum remaining in the patient’s personal deposit account in excess of burial costs may be applied for payment of care, support, maintenance, and medical attention. Any of the funds belonging to a patient deposited in the patients’ personal deposit fund may be used for the purchase of personal incidentals for the patient or may be applied in an amount not exceeding five hundred dollars ($500) to the payment of the patient’s burial expenses

Additional Resources:

California Department of State Hospitals – Financial Assistance Program

Social Security Administration – Re-Entering the Community After Incarceration – How We Can Help -

Social Security Administration –What Prisoners Need to Know