States that opt out of Medicaid expansion under the Affordable Care Act may be undermining access to mental health and addiction services for low-income individuals.  Roughly 3 million low-income individuals nationwide struggle with behavioral health issues, about half of whom live in Medicaid non-expansion states, according to a report published by the Government Accountability Office. Residents of non-expansion states have not gained access to much needed mental health and addiction services as a result, including psychiatric assessments, outpatient and inpatient treatment, and prescription drugs. And the states themselves are losing on several fronts as well.

A study published in Psychiatric Services in Advance found community health centers, which primarily serve low-income and uninsured populations, would see nearly $230 million in extra revenue if all 50 states expanded Medicaid by 2020, and an estimated $12.9 million of that figure would go toward behavioral health services. Besides forfeiting substantial federal funding for expanded coverage of low-income residents, states end up spending more on uncompensated care to providers, since individuals lack coverage they otherwise would be getting if under Medicaid.

As a result, states are risking the capacity of the safety net. According to the U.S. Department of Health and Human Services, about 1 in 15 people in the nation rely on a community health center for medical care, and nearly 70 percent of federally-funded health centers provide mental health services, while about 40 percent offer substance abuse services. However, qualified health centers are not required by law to provide on-site behavioral health services, making these services vulnerable to cuts under financial hardship. Health centers could lose revenues from insured patients as a result. While Health Center Program grant funding constitutes 20 percent of federally-qualified health center’s revenue, the remainder comes from Medicaid, Medicare, private insurance, and patient fees--revenue health centers could lose as a result of a reduction or elimination of services.

As is stands today, Medicaid is the largest single payer for mental health services in the nation, and it is playing an increasingly larger role in financing substance abuse services. Moreover, individuals enrolled in Medicaid experience behavioral health conditions at a higher rate than those with private insurance, as low-income individuals are disproportionally likely to struggle with mental illness. The demand for behavioral health treatment is likely only to grow due to Medicaid expansion, and expansion states stand to gain the most as the insured rate increases across the nation. Medicaid spends $8 billion on psychotropic drugs, representing 30 percent of total drug spending, according to a report issued by the Medicaid and CHIP Payment Access Commission in 2015, further illustrating this demand for behavioral health treatment.

As more individuals gain health insurance coverage, they are more apt to seek out services. Conversely, in states that have not yet expanded Medicaid, health centers that are required to cut back or eliminate services will see a loss of patients, some of whom will not have access to treatment elsewhere. States that choose not to expand Medicaid are forgoing revenue to sustain and expand access to behavioral health services, leaving roughly 1.4 million low-income people struggling with behavioral health issues in the cold.

Follow Nicole Witowski on Twitter @NicoleWitDRG

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