Medicaid’s role in low income individuals access to mental health services

Medicaid plays a significant role in providing treatment for low income individuals with mental health conditions. Medicaid recipients usage of mental health services “is comparable to and sometimes greater” than usage among privately insured individuals, according to a Kaiser Family Foundation (KFF) analysis. In 2015, Medicaid covered 22 percent of nonelderly adults with mental illness and 26 percent of nonelderly adults with serious mental illness. KFF found that Medicaid coverage of mental health services is often more comprehensive than private insurance coverage.

Analysis Findings

The analysis (1) describes individuals with mental health conditions, and (2) compares the mental health needs and the receipt of services among individuals without insurance, with Medicaid, and with private insurance. KFF provided the following findings:

  • Characteristics of nonelderly adults with mental illness. Twenty percent of nonelderly adults have a mental illness. They are predominantly white, female, and under 50. Five percent have a serious mental illness. Most are employed (63 percent), but 4 in ten have low incomes and 22 percent are below poverty. In addition, nonelderly adults with mental illness often have co-morbid conditions.
  • Utilization of mental health services. Most nonelderly adults with mental illness have either Medicaid or private insurance. Those with Medicaid are more likely to receive treatment than those with private insurance or without insurance. In addition, the receipt of psychiatric medication is more common among those individuals covered by Medicaid.

The role of Medicaid expansion

The Patient Protection and Affordable Care Act (PPACA) (P.L. 111-148) and the Health Care and Education Reconciliation Act of 2010 (HCERA) (P.L. 111-152), (together referred to as the Affordable Care Act (ACA)) expanded Medicaid coverage to millions of low-income Americans. Sections 2001 and 2002 of the PPACA as amended by 1004 and 1201 of HCERA enabled many low-income individuals with mental health conditions to obtain coverage and access treatment through state Medicaid programs that choose to expand.

KFF pointed out that the American Health Care Act of 2017 (AHCA) (H.R. 1628), introduced by Republicans and passed by the House of Representatives on May 4, 2017 would limit enhanced federal support for the expansion population. The Congressional Budget Office projected that the reduction in federal funds would result in a cut of $834 billion over 10 years. “A reduction in federal funds of this magnitude would likely cause states to decrease Medicaid payment rates, covered services, and/or eligibility, limiting states’ ability to reach people with mental health conditions,” KFF said.

AGs request Medicaid policy change to fight in-home elderly abuse, neglect

The Centers for Disease Control and Prevention’s (CDC) estimate that one in 10 people aged 65 and over who live at home will become the victim of abuse has drawn the attention of the National Association of Attorneys General (NAAG). Millions of people in this age group are enrolled in Medicaid and the NAAG believes that a change in policy allowing federal funds to investigate more abuse and neglect cases—even those that occur in the home—will help.

Medicaid Fraud Control Units (MFCUs) are charged with investigating and prosecuting state Medicaid provider fraud as well as resident abuse and neglect complaints at Medicaid-funded health care facilities, and can choose to look into complaints at board and care facilities. The MFCUs usually operate within the state attorney general’s office. Because there are strict limitation on the use of MFCU funds to investigate fraud and abuse, the NAAG is now asking Secretary of HHS, Tom Price, to replace or eliminate the “outdated” policies. Instead NAAG provided two recommendations to the Secretary: (1) allow MFCU funds to investigate and prosecute abuse and neglect of Medicaid beneficiaries in non-institutionalized settings; or (2) allow use of MFCU funds to freely screen or review any and all complaints or reports of whatever type, in whatever setting.

The May 10, 1017, letter to Price was signed by attorneys general of 37 states and the District of Columbia. Montana Attorney General Tim Fox noted “abuse and neglect in the home takes many forms, including physical abuse, sexual abuse, and drug diversion. Abuse and neglect is perpetrated by family, friends, and caregivers alike. The requested change in policy would allow our MFCU to investigate reports…regardless of where they reside, whether it’s a home or in a healthcare facility.” David Y. Chin, Attorney General of Hawaii, cited “[the Hawaii MFCU] receives thousands of complaints relating to fraud and abuse and neglect every year…We hope that the federal government will hear our concerns and support our efforts to protect Hawaii’s most vulnerable residents.”

ACA’s Medicaid expansion helped hospitals get paid $6B more

Hospitals in states that expanded Medicaid under the ACA saw large reductions in uncompensated care between 2013 and 2015, realizing estimated savings of $6.2 billion. Overall, those states’ uncompensated care burdens fell from 3.9 percent of operating costs to 2.3 percent, according to an issue brief from the Commonwealth Fund, which analyzed Medicare Hospital Cost Reports from 2011 to 2015.

Section 2001 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) expanded Medicaid eligibility to nonelderly adults with incomes up to 138 percent of the federal poverty level (FPL). In National Federation of Independent Business v. Sebelius (2012), the Supreme Court held that states could not be required to expand Medicaid eligibility, essentially allowing states to choose whether to expand their programs. One of the purposes of the ACA’s Medicaid expansion was to reduce uncompensated care—that is, a hospital’s losses on charity care and bad debt.

The researchers compared hospital uncompensated care burdens and found a marked decline in uncompensated care costs for hospitals in states that expanded Medicaid between 2013 and 2014, and continuing into 2015. There was no similar decline in nonexpansion states. The results were found across hospitals with both high and low levels of uncompensated care prior to 2014, though hospitals with the highest levels of uncompensated care saw the largest benefit from Medicaid expansion. The researchers therefore concluded that Medicaid expansion met the ACA’s goal of reducing uncompensated care burdens for hospitals, and noted that if the 19 states that have not yet expanded Medicaid eligibility were to expand, those states would also save over $6 billion in uncompensated care costs.

Highlight on Pennsylvania: Better Medicaid spending through technology

Pennsylvania lawmakers introduced legislation attempting to reduce spending and improve patient care within the state’s Medicaid program. Under the proposed legislation, Senate Bill 600, the state would adopt new technology to monitor and identify areas of unnecessary or wasteful health care services and procedures. The state would have 90 days within enactment of the bill to pick a technology company and implement the monitoring. Lawmakers noted that by providing more information, patients and providers, alike, could make better health care decisions. Consequently, this would reduce Medicaid spending. Pennsylvania is one of the highest spenders per Medicaid enrollee in the U.S., with one out of every four dollars in the state’s annual budget accounted for by Medicaid.

The lawmakers have started to review tech companies with prior experience in collecting and monitoring patients to improve care, notably companies that have worked with Alaska’s Medicaid program. The tech company involved  reduced misdiagnosis rates, improved outpatient care, cut waste, and reduced Medicaid expenditures in Alaska by over 14 percent. According to Pennsylvania lawmakers, a similar program could generate between $2 billion and $4 billion in annual savings.

In fiscal year 2015-16, the federal government spent about $15.3 billion on Medicaid in Pennsylvania, while the state spent about $10.6 billion, bringing the total to $25.9 billion; the state’s Department of Health and Human Services budget over the past few years has increased by about $500 million annually. The influx of approximately 700,000 new patients into the Medicaid system is a 20 percent increase and has cost an additional $4.6 billion. State lawmakers are concerned that the push for health care reform by the federal government will result in a cut in the federal portion of Medicaid to the state.