Medicaid Expansion to Boost Access to Mental Health Services

BY Ellen Rolfes  February 22, 2013 at 3:50 PM EDT


State funding and investment for mental health services have significantly decreased in recent years, even as demand for these services has increased. But there may be a glimmer of hope for advocates of expanded access to mental health coverage.

In participating states, the upcoming Medicaid expansion under the Affordable Care Act will increase both the number of eligible enrollees and the list of treatments and services covered, including mental health coverage.

Both the Medicaid expansion and the establishment of health insurance exchanges are scheduled to roll out Jan. 1, 2014. The federal government will pick up all the costs for newly eligible Medicaid patients under the expansion for the first three years, and then will slowly decrease the federal contribution to 90 percent.

By expanding Medicaid and creating the health insurance exchanges, the federal government hopes that more uninsured Americans will become insured, and as a result, fewer people will need to rely on costly emergency room treatment for their basic health care needs.

But the Supreme Court’s ruling on the health care reform law on June 28, 2012, allowed states to opt out of the law’s Medicaid expansion while maintaining their existing Medicaid funding. Those states that opt out will not receive the additional funds to expand coverage to include mental illnesses.

For more of an overview of where U.S. mental health stands now, we turn to Christine Vestal, senior writer for the Pew Charitable Trust’s Stateline blog.


After the shooting at Sandy Hook Elementary School, many officials have been calling for more mental health services in the United States. How realistic do you think that is?

Christine Vestal, Stateline: Well the states don’t have a lot of money. It’s probably getting more publicity than it will actually get funding. There are a handful of states where the governors have made this a big priority: Colorado is one, and we’re also hearing from Ohio, Rhode Island, Maryland, and South Carolina.

We’ve seen pretty drastic changes in state-level mental health funding in the last few years. What have you observed?

Christine Vestal: At the state level, [mental health funding] has gone down since 2009. There’s a report from the National Association of State Mental Health Program Directors that shows a decline of $4.35 billion between 2009 and 2012 across all the states.

State budgets have been challenged ever since 2001 with the back-to-back recessions, and “non-essential services” are getting cut. They don’t want to cut education (even though they are). And they can only cut Medicaid so much because it’s a federal program with federal minimums.

So like other social services, mental health services are getting cut. They’re just not considered essential. And because of that, some states are closing beds and closing hospitals.

As cuts for mental health services continue, where do people go for help?

Christine Vestal: When crisis hits, they end up in emergency rooms, because states are not only lowering the number of beds and state-funded hospitals, they’re cutting back on funding to community services as well.

State charity hospitals, state psychiatric hospitals, counselors within schools, emergency screening, long-term care and crisis centers and community mental health centers — all of these are being cut. The study that I mentioned also shows that between 2009 and 2012, 12 states closed a total of 15 state psychiatric hospitals. And a total of 4,471 psychiatric beds were cut within state hospitals.

Are emergency rooms equipped to deal with people in need of mental health services?

Christine Vestal: For the most part, they are able to stabilize them. But the big question is: What happens after that? They’re released again and so they may keep coming back.

All of this doesn’t mean there are no services. It’s not as if they’re closing everything up, they’re just not funding it to the level to meet demand. There are longer waiting lists. You can look at the funding trend-line and say it doesn’t look good and you can look at the demand, which is going up — especially for community services — so it’s not good.

How might the Affordable Care Act, the health care reform law, play into all of this?

Christine Vestal: There are two major ways. One is that if you’re buying insurance on an exchange, those policies will be required to include mental health services. Right now, a lot of people have insurance but it doesn’t cover mental health.

So for the people who are going to be using an exchange — and that’s estimated to be 22 million people by 2022 — those people will be sure to have affordable insurance that covers mental health services.

The other major factor is the expansion of Medicaid, which states can now choose whether they want to go forward with or not. If all states went forward, an estimated 13 million Americans would have insurance, most of whom don’t have insurance through Medicaid at the moment, and the new coverage would include mental health services. Many of the people who would benefit from the expansion would be young adults, and that’s a large portion of the people affected by mental illness.

But there are quite a few Republican-led states that are saying “no,” they’re not going to expand Medicare. And at this point, a “no” means they’re probably not going to be doing it at least for the first year, which is 2014.

Do we know what kind of services will be included in these Medicaid plans?

Christine Vestal: I haven’t gotten to that level of detail, but it’s considered comprehensive — it would include some long-term care, some residential care, preventative care, screenings, testing, counseling, pharmaceuticals. It’s just a matter of how much.

The flip side of spending all of this money on this additional money is that this could potentially save the U.S. some money. What’s known about that?

Christine Vestal: The same report that I mentioned before says that for every dollar spent on depression, $7 is generated on the economy. And that’s mainly because people can’t work at all — or at least not effectively — when they’re suffering from depression. So that’s one gain that we can put a dollar figure on.

Another is that it cuts back on admissions to hospitals, because mental illness affects physical wellbeing and very often, an individual can have physical health problems and they tend to be much worse when combined with mental illness. A recent study has shown that when comprehensive community based mental health services are available for young people, that cuts down on hospital admissions and the length of stay by 40 percent.

What are states that are strengthening their mental health programs looking to do?

Christine Vestal: Responding to the tragedy in Aurora, Colo., Gov. Hickenlooper proposed an $18.5 million increase in mental health services. Again, that’s not enough to make up for the decline in funding in recent years by a substantial amount. But he wants to create a statewide mental health crisis hotline, set up five 24-hour mental health crisis centers, increase the number of psychiatric beds in state-run hospitals and develop housing for people suffering from mental illness.

In Ohio, the governor has $5 million he wants to use to help families who have a family member suffering from mental illness and feel threatened by [their family member]. It provides housing for the person with mental illness or respite care for the beleaguered parents.

In Maryland, Gov. O’Malley has said he wants to increase funding for crisis intervention, mostly for young people. Rhode Island wants to better identify the early signs of mental illness in young people and get them into effective treatment. And very often this involves having counselors in public high schools or K through 12.

Christine Vestal is the senior writer for the daily news service Stateline at Pew Charitable Trusts.

Photo above by Stockbyte/Getty Images.

Jason Kane contributed to this report.