How Poor Are Medicaid Mental Health Benefits Under PL 111-148?

Just how badly will mental health care benefits be affected under the Patient Protection and Affordable Care Act?

When the Patient Protection and Affordable Care Act (PL 111-148) was enacted back in March, it soon became apparent that millions of new Medicaid enrollees would likely be left with mental health care coverage that is significantly less robust than what most current Medicaid plans provide.

Now, an analysis of PL 111-148, published in the November issues of Psychiatric Services shows that although the law will allow for new insurance coverage of millions of Americans with mental health disorders, the scope of that coverage under Medicaid could be more limited than what was expected.

“For those people moving from no coverage to coverage, the law is good,” said lead author Rachel Garfield, PhD, assistant professor, Department of Health Policy and Management, University of Pittsburgh. “But there will be [coverage] limits on those services.”

Concerns regarding these limits are based on the use of the Medicaid program under PL 111-148 to provide insurance to 16 million of the nearly 30 million uninsured people who are expected to receive health insurance coverage under the law, allowed through expansion in 2014 (mandatory) or as early as 2011 (if states elect to expand Medicaid eligibility that early) of eligibility from specific categories of low-income people to any person who makes up one of the up to 133% of the federal poverty level.

The problem, according Garfield and colleagues, is that the new Medicaid coverage will likely exclude many services that people with mental illnesses need, especially those people with substance use disorders, as such services fall outside the scope of benefits that most private insurance plans currently provide. Further, PL 111-148 allows the use of private-plan coverage by the states—as opposed to the broader coverage of mental health services in current Medicaid plans—as a benchmark for coverage for new Medicaid enrollees.

“If behavioral health benefits are set at those currently available in typical private plans or in benchmark coverage, some newly insured individuals with mental illnesses or substance use disorders who are covered by private plans or Medicaid expansions are still likely to face gaps in covered services,” Garfield, et al wrote.

And although the 2008 enactment of the federal insurance parity requirement (PL 110-343) was expected by mental health advocates to prevent shortfalls in insurance coverage under the federal health care reform law, it appears as though the Medicaid provision is unable to guarantee broad coverage.

According to Andrew Sperling, director of federal legislative advocacy, National Alliance on Mental Illness, “his analysis of the law indicates states are more likely to benchmark their Medicaid expansions to more generous state or federal health insurance plans, which would lower the likelihood that substance abuse coverage would be unavailable.” What’s more likely, according to Sperling, is that “traditional Medicaid support services for people with mental illness, such as care coordination and housing supports, will be unavailable to newly covered beneficiaries.” He added, “These are the types of services that state Medicaid plans currently pay for.”

Under the federal parity, insurers that provide mental health coverage are required to provide mental health services coverage that is equal to that of other health care, which is where the coverage shortfall lies, as anticipated by Garfield and colleagues; no general medical service counterparts exist for such mental health services as non-hospital residential treatment, partial hospitalization, or treatment by a certified addiction counselor.

“The final interpretation of the parity provision will be a critical determinant of access to some benefits,” Garfield, et al wrote. For instance, states aren’t prohibited from cutting services once reform is implemented, as particularly large issue as temptation to do so could rise as states face budget shortfalls, with Medicaid already one of the largest line items in state budgets.

So, what’s a society to do? Garfield said that federal regulations, expected to be released closer to 2014, could “clarify whether the essential health benefits package includes services that are important to improving the health of those with mental illness. For example, regulations could require minimum benefits packages in Medicaid that include screening and counseling for substance use disorders.”

Legislation barring states from restricting Medicaid services beyond current levels and requiring them to maintain non-Medicaid mental health spending at a certain proportion of pre-reform-law funding could also help.

But Sperling gives neither approach much chance to succeed, with both running up against a strengthened Republican role in Congress that would likely block efforts to expand benefits.

But hope shan’t be lost. An approach with hope would see states encourage to apply for a 1915i Medicaid waiver, which allows states to expand services for certain new categories of Medicais beneficiaries, including people who are arrested repeatedly for mental illness-related behaviors.

How will the law affect your practice and your patients? What efforts can physicians make to help alleviate the problem, if any? Or is hope lost?

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