OAK HARBOR, Wash. -- Homeless camps now dot the scenic landscape in Oak Harbor. Transients live almost side-by-side with retirees and vacationers along the shores of the city's Windjammer Park.

Chief Ed Green says the city is on the edge of a serious problem.

What we see is a lot of substance abuse. People are trying to just cope using alcohol and drugs, he said.

Just up Highway 20, about 200 people are seeking treatment at the Sea Mar Community Health Center for drug and alcohol issues. Island County picks up some of the tab and gets reimbursed through Medicaid. With the Affordable Care Act now in place, however, many more clients are using Medicaid. The problem is the government reimburses treatment centers at a far lower rate than private insurance, so places like Sea Mar are losing money.

Now, Island County and five other rural counties have been notified that they're at imminent or critical risk of losing their publicly funded substance abuse programs. It s a situation Sea Mar Regional Director Kate Scott says simply isn t sustainable.

To expect that we can sustain the necessary services on the Medicaid rates now, it s not possible and it will create a dire situation for the people in our community, said Scott.

Some 40,000 addicts are expected to be added to the Medicaid rolls due to the Affordable Care Act with no additional state Medicaid funding. Responsibility for the problem is widespread. The state legislature declined to raise the Medicaid rate it pays to treatment centers when the Affordable Care Act was implemented. At the same time, Governor Jay Inslee chose to focus on mental health funding. DSHS agreed to only study of the issue. At this point no solutions are ready to be implemented.

If treatment centers close, Chief Green believes communities like his will only grow less safe.

Homelessness, crime, addiction, incarceration will grow exponentially all across Puget Sound and all the communities.

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