Medicaid Expansion Could Expand Funding, Increase Use of MH Services

If states that have opted not to expand their Medicaid programs—an option under the Affordable Care Act (ACA)—were to do so by 2020 they could reap millions of dollars for health centers, resulting in a significant increase in patients receiving mental health care.

That’s the finding from an analysis of health services data published in Psychiatric Services in Advance on August 17.

“If all states expand Medicaid by 2020, we estimate that nearly $230 million in additional revenue could accrue to health centers in states that are currently opting out,” according to Emily Jones, Ph.D., M.P.P., of the U.S. Department of Health and Human Services and colleagues at George Washington University. “If health centers are able to hire additional staff, this revenue could cover the costs of over 70,000 encounters with mental health and substance use disorder specialists, in addition to general medical, dental, and other services.

“This study indicates that expanding Medicaid would likely result in higher utilization of behavioral health services in health centers, highlighting an important indirect benefit of Medicaid expansion,” they said.

The ACA increases access to affordable insurance by two main avenues—the Medicaid expansion to residents at or below 133 percent of the federal poverty level and tax subsidies for low-income Americans in households above 133 percent to purchase insurance through the ACA health insurance marketplaces with no exclusions based on preexisting conditions.

A June 2012 Supreme Court decision allowed states to opt out of expanding Medicaid, and as of June 2014, 24 states had done so, leaving up to 3.6 million individuals uninsured who might have been covered if all states expanded.

According to Jones and colleagues, most health center patients fall below the poverty line, rendering them ineligible for tax subsidies to purchase health insurance through the ACA marketplace. For this reason, many uninsured health center patients living in states that have opted out of Medicaid expansion might still lack access to affordable insurance, particularly if they have incomes below 133 percent of the federal poverty level.

In order to assess the ways that state decisions to opt out of Medicaid expansion affect resources for health centers—and by extension on provision of mental health services—the researchers used the 2012 Uniform Data System data set, which is maintained by the Health Resources and Services Administration (HRSA). Health centers that are grantees of HRSA report patient demographic and organizational data annually, including insurance mix, the number of full-time–equivalent mental health and substance use disorder treatment specialty staff members, the costs of the services provided by these specialists, and the number of encounters they provided.

Jones and colleagues estimated the total potential health center revenue in 2020 that will not accrue to health centers in states that continue to opt out of Medicaid expansion by multiplying a projected case mix for insurance status by the payment gap for patients with each type of insurance. Using the estimated percentage of total revenues supporting the provision of specialty behavioral treatment services, the authors also estimated the number of encounters with behavioral health specialists that might be possible in 2020 if all states were to expand Medicaid by then.

They found that if all states expand Medicaid by 2020, an additional $229,607,165 in revenue would be projected to accrue to the nation’s health centers. According to the authors, the estimated revenue would be the result of reductions in losses from treating uninsured and underinsured patients. Revenue would also come from the provision of services that are not reimbursed by insurers, such as behavioral health services delivered on the same day as medical services, and enabling services, such as transportation and translation.

Moreover, the authors projected that if current non-expansion states expand Medicaid by 2020, an estimated additional 59,214 encounters with mental health professionals and 11,480 encounters with substance abuse treatment specialists might occur in health centers in these states.

Howard Goldman, M.D., M.P.H., editor of Psychiatric Services and a health services researcher noted for his studies on the cost effectiveness of mental health parity, said the analysis by Jones and colleagues should be an incentive to states that have opted out of the Medicaid expansion to consider the effects on health services funding and on individuals requiring mental health and substance abuse services.

“As these authors demonstrate, the Medicaid expansion is a critical component of the ACA,” Goldman told Psychiatric News. “Although the Supreme Court made it an elective benefit, states would do well to consider the financial consequences of not participating, along with the benefits for their citizens by expanding Medicaid under the ACA.” ■