Health Reform WK-EDGE Medicaid expansion should be a no-brainer for mental health
Monday, June 20, 2016

Medicaid expansion should be a no-brainer for mental health

By Bryant Storm, J.D.

The expansion of state Medicaid programs has been a significant milestone for many of the 44 million individuals in the United States with a mental health condition. Due in part to the high occurrence of behavioral health care needs among the population of Medicaid eligible individuals, coverage growth under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) has provided access to treatment for low-income individuals that would otherwise go without care. The 19 states that have chosen not to expand their Medicaid programs have so far passed on an opportunity to improve access to mental health care for low-income individuals—a policy choice that negatively impacts individuals’ health as well as overall health care costs. This strategic perspective examines the implications of Medicaid expansion on behavioral health care and considers what is being lost in states that have elected not to expand.

Behavioral health care

Behavioral health is expensive for the country in both medical and financial terms. According to the National Institute of Mental Health (NAMI), one in five adults in America experience mental illness and one in 25 adults live with a serious mental illness. Additionally, serious mental illnesses cost the U.S. an estimated $193.2 billion in lost earnings every year. In 2012, states spent more than $44.2 billion providing mental health and substance use disorder services.

Uninsured. Individuals with behavioral health care needs represent a significant portion of the uninsured and Medicaid eligible populations. Specifically, individuals with a mental or substance use disorder constitute 28 percent of uninsured individuals age 18 to 64 with incomes below 138 percent of the Federal Poverty Level (FPL)—the income threshold for Medicaid eligibility in states that have expanded their Medicaid program.

Medicaid. Insurance coverage is one of the most crucial steps in improving access to behavioral health care services because, if an individual has health insurance, that coverage dramatically increases the likelihood that the individual will obtain treatment for behavioral health care needs. According to an HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE) report, one study, which focused on serious mental illness, found that having Medicaid coverage increased the likelihood that an individual would receive mental health treatment by 30 percent.


The ACA impacted mental health and substance use disorder treatment indirectly through coverage gains and directly through efforts like those aimed at mental health parity. Medicaid expansion is among the indirect changes to the health care industry which benefited behavioral health. The ACA’s Medicaid expansion provides financial support to states that choose to expand Medicaid eligibility under their state Medicaid programs to all nonelderly individuals with incomes below 138 percent of the FPL.

Nonexpansion.  Jackie Selby at Epstein Becker Green noted that while “there is not just one right mechanism for improving behavioral health care in the U.S., Medicaid expansion helps considerably by providing coverage to a population that has had higher than average behavioral health needs.” While 31 states and the District of Columbia have expanded Medicaid and extended health coverage to millions, an additional 1.9 million individuals that live in nonexpansion states with a mental illness, substance abuse disorder, or both would be eligible for Medicaid if their state chose to expand. Medicaid may be the only option for those 1.9 million individuals. Selby explained that without expansion, vulnerable populations “that would otherwise have insurance coverage will likely continue to go without adequate behavioral health care.”

Health. HHS predicts that, if all states expanded Medicaid, about 371,000 fewer people each year would experience depression and 540,000 more people would report being in good or excellent health. Untreated behavioral health conditions can have serious negative impacts on patients’ lives. According to the ASPE report, individuals with behavioral health conditions have a lower average life expectancy.

Access to treatment is crucial because of the nature of some behavioral health conditions. There are typically substantial delays between the first time an individual experiences an episode of a serious mental illness and when treatment begins. For conditions like bipolar disorder and schizophrenia, the delay can worsen outcomes. Also, in addition to extending coverage to more individuals, expansion also can improve health outcomes by increasing the variety of behavioral health care services that states can offer. For example, according to the ASPE report, Medicaid expansion can enhance the continuum of care services to include expanded recovery services and peer and employment support services.

Costs. Insuring individuals with behavioral health care needs through Medicaid expansion—or otherwise—also stands to reduce overall health care costs. There are myriad reasons for the positive cost impact. Because improved prognosis result from earlier diagnosis, treated individuals are likely to require less overall care if they are treated sooner rather than later. Additionally, because 68 percent of individuals with mental illness also have at least one general medical disorder, improved access to care also will improve the general physical well-being of the population—lowering overall costs. Because behavioral health care treatment increases individuals’ likelihood of employment and success at work, employers stand to gain from improved behavioral health care treatment. The impact of behavioral health issues on employers is dramatic—according to a 2000 study cited in the ASPE report, average sick days from depression exceed the number of sick days due to hypertension, back problems, diabetes or heart disease. The report also notes that Medicaid expansion stands to improve the likelihood that homeless individuals get care and drive down criminal justice costs by covering formerly incarcerated individuals and reducing recidivism rates.

Beyond expansion

Although expansion is a significant step towards improving behavioral health, it is not an absolute solution. Selby noted that “access to adequate networks of behavioral healthcare continues to be an issue even in expansion states.”

Minorities. A lack of coverage and treatment continues to be problematic, especially for minorities. For example, an analysis of National Survey on Drug Use and Health data from 2005 to 2014 indicated that since the passage of the law, whites remain the only racial group where the majority of individuals with severe psychological distress get treatment. Additionally, while Hispanics and Asians are moderately more likely to obtain behavioral health care treatment than they were before the ACA, African Americans are not more likely to get mental health treatment.

Addiction. Substance use disorder coverage also has fallen short under the ACA. Although the ACA does not enumerate which substance use disorder benefits must be covered, the law mandates that each state must select an essential health benefit benchmark plan to serve as the minimum level of substance use disorder coverage that ACA plans sold in the state must offer. According to a report from the National Center on Addiction and Substance Abuse, over two-thirds of state EHB benchmark plans violate the ACA’s requirements. Specifically, the report found that 18 percent of benchmark plans do not meet parity requirements and none of the plans provide comprehensive coverage for addiction. Additionally, 88 percent of plan documents lacked sufficient detail to allow for a full evaluation of the plan’s compliance with parity requirements.

Justice-involved. Behavioral health care is also an important issue for justice-involved individuals—those who have been or are currently involved with the criminal justice system. Justice-involved individuals have disproportionately high health care needs, resulting from higher rates of chronic conditions, HIV infection, mental disorders, and substance use disorders. According to 2005 data, 56 percent of people in state prison, 45 percent of people in federal prison, and 64 percent of people in jail reported symptoms of a mental health disorder. With 2.2 million people currently incarcerated and 4.7 million people under probation or parole in the U.S., providing justice-involved individuals with access to care is a significant component of improving behavioral health. HHS believes one method of improving health care for justice-involved individuals is a greater reliance on Medicaid and Medicaid expansion under the ACA. In particular, the agency has proposed that improved use of Medicaid could reduce financial burdens on correctional facilities (see HHS proposes using Medicaid to improve criminal justice, May 4, 2016).

Alternatives. There are other steps that states can take to improve the dim outlook. Selby said that “state policies can support professionals entering the field and alternative delivery models such as telemedicine can improve access.” Additionally, she noted that recent changes in the parity requirements in Medicaid managed care are expected to help with access issues.

Demonstrations. Selby suggested that another mechanism to improve behavioral health, beyond expansion, is “demonstrations programs for those in the Medicaid population with serious mental illness or substance abuse that incorporate services beyond healthcare.” Selby noted, “residential, vocational, transportation, and other services play a big role in improving behavioral health.” She said it is possible that positive outcomes in some of the demonstration programs could “influence policies in non-expansion states.”

A logical step

Medicaid expansion has improved access to behavioral health care by extending coverage to millions of individuals with incomes that previously put them out of reach of Medicaid. However, more can be done to assist those with behavioral health care needs. Expansion alone may be insufficient to meet the health care needs of the 44 million individuals in the U.S. with a mental health condition. However, if coverage and access gains are the goal, Medicaid expansion is a step in the right direction.

Attorneys: Jackie Selby (Epstein Becker Green).

MainStory: StrategicPerspectives NewsFeed AccessNews AgencyNews DrugNews EssentialBenefitNews HealthInsuranceExchangeNews InsurerNews MedicaidNews MedicaidExpansionNews ProgramIntegrityNews

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