Medicaid Coverage for Mental Health

May 7, 2018 Posted by

Approximately 29% of people who receive health insurance coverage through the Medicaid expansion either have a mental disorder (e.g. schizophrenia, bipolar disorder, clinical depression, anxiety) or a substance use disorder (SUD) such as alcoholism or opioid addiction, or both. As mentioned in our blog post “Mental Health Insurance,” 1 in 5 Adults have a mental health condition. With the concern for mental health becoming increasingly important, how does Medicaid, the nations largest insurer, support those suffering with mental illness as well as the growing prevalence of Americans with mental health problems? 

What Medicaid Offers for Mental Health Coverage

Although behavioral health services are not a specifically defined category of Medicaid benefits, the program covers many behavioral health benefits. All state Medicaid programs provide some mental health services and some offer substance use disorder services to beneficiaries. Medicaid plans typically cover the following mental health services:

  • Psychiatric hospital visits
  • Case management
  • Day treatment
  • Psycho-social rehabilitation
  • Psychiatric evaluation and testing
  • Medicate management
  • Individual, group and family therapy
  • Inpatient detoxification
  • Methadone maintenance
  • Smoking and tobacco cessation services

Who Benefits, and are there Restrictions?

By itself, having a SUD isn’t considered a disabling condition under Medicaid rules, so before the ACA expanded Medicaid, low-income adults with SUDs generally didn’t qualify for Medicaid unless they also had a physical or mental health disability.  States’ recent Medicaid expansions under the ACA allow adults with incomes below 138 percent of the poverty line to enroll regardless of disability, opening the door to coverage for far more adults with SUDs.  

The Kaiser Family Foundation reports that, among Medicaid beneficiaries with behavioral health conditions (excluding those who also qualify for Medicare), over four in 10 adults (41%) are eligible for Medicaid based on having a disability. Psychiatrist services may be covered under the “physician services” category, and inpatient psychiatric treatment for individuals over age 65 may be covered under the “inpatient hospital services” category.

Historically, federal law has prohibited federal Medicaid payments for services provided in “institutions for mental disease” (IMD) to adults age 21-64. However, in April 2016, the Centers for Medicare & Medicaid Services (CMS) issued final Medicaid managed care regulations that allow states to receive federal matching funds for managed care capitation payments for adults age 21-64 who receive psychiatric or SUD inpatient or residential services in an IMD for up to 15 days in a month as of 2016.

Mental illness is much more prevalent among low-income Americans and the elderly. Previously noted, these illnesses can include but not limited to:

  • Anxiety & Panic Disorders
  • Bipolar Disorder
  • Depression
  • Eating Disorders
  • Schizophrenia
  • Substance Abuse & Addiction

Data from the Substance Abuse and Mental Health Services Administration confirms that 5 percent of people with mental illness suffer from a disorder severe enough to affect school, work, or other aspects of daily life. There is no single cause for mental health disorders, as they can be caused by a mixture of biological, psychological, and environmental factors. Only a certified mental health professional can provide an accurate diagnosis of the causes of the given disorder and properly diagnose, which can be covered via Medicaid.

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