Medicaid Recipients Struggle to Find Mental Health Care

Introduction to the Problem

By Shalina Chatlani, Stateline.org
Charmeka Newton, a psychologist who has her own practice in Lansing, Michigan, is passionate about serving Black and Hispanic patients. They’re often looking for therapists who will understand how their race, ethnicity and culture may affect them, she said, and she helps provide that care.
Medicaid is a major source of health care for people of color. But Newton can only afford to see a small number of Medicaid patients, because the program pays her so much less than commercial insurance.
Republicans in Congress are aiming to make extensive cuts to Medicaid, the joint federal-state health insurance program that covers a total of 72 million low-income people and people with disabilities, or 1 in 5 U.S. residents. If that happens, Newton and many other mental health providers worry that already-low Medicaid reimbursement rates will stagnate or even decline.

The Impact of Cuts on Mental Health Care

That would make it difficult for her to keep seeing Medicaid patients.
“Medicaid is probably one of the most challenging insurances to work with,” Newton told Stateline. “My biggest fear if cuts happen is that individuals won’t have access to providers that are able to help them.”
Already, there is a shortage of mental health care providers. About 122 million people, or about 35% of the U.S. population, are living in an area with a mental health care professional shortage, according to data from the federal Health Resources and Services Administration. If Medicaid reimbursement rates go down and more providers refuse to see those patients, the shortage would get worse.
Nationwide, Medicaid covers nearly 1 in 3 working-age adults who live with mental illness, or about 15 million adults, according to health policy research organization KFF.

Potential Solutions and Variations Across States

The U.S. House Energy and Commerce Committee, which oversees Medicaid, is looking for at least $880 billion in budget savings over the next decade, largely to pay for extensive tax cuts. A March 5 letter from the Congressional Budget Office, the nonpartisan research arm of Congress, confirmed that a cut of that size would have to come from either Medicaid or Medicare, the insurance program for older adults.
President Donald Trump has said that Medicare is off the table, so that leaves Medicaid.
Lawmakers are considering numerous options, including shrinking the federal government’s share of the cost of covering people who became newly eligible for Medicaid under the Affordable Care Act. If that happens, states that opted to expand to cover those residents — adults with incomes up to 138% of the federal poverty level — would have to either increase their own spending or find savings elsewhere.
That could mean removing some people from Medicaid rolls, eliminating coverage for certain services or reducing reimbursement rates — any one of which could reduce Medicaid recipients’ access to mental health care, said Stephen Gillaspy, director of health policy and health care financing at the American Psychological Association.

Variations Across States, Different Challenges

In at least 15 states, more than 40% of people on Medicaid reported experiencing a mental illness, according to a KFF analysis of 2021-2022 survey data from the federal Substance Abuse and Mental Health Services Administration.
Republicans in Congress are still hammering out whether or how they might cut Medicaid. Chris Pope, a senior fellow at the conservative-leaning policy group the Manhattan Institute, told Stateline he doubts mental health services or reimbursement rates would be affected, because the largest sources of spending are acute and long-term care.
“From a fiscal point of view, mental health is basically a drop in the bucket. It’s not where the big savings are going to need to come from,” Pope said.
Medicaid reimbursement rates for mental health services vary dramatically from state to state. Reimbursement for an hourlong individual psychotherapy session ranged from $95 to $135 in 2022, according to a 2023 study published in the journal Health Affairs.

What States Can and Have Done

Researchers at KFF point out four main ways states have been trying to address mental health workforce shortages for state Medicaid programs. They include increasing reimbursement rates, reducing administrative burden on providers, creating licensure compacts to allow providers to work across state lines or reducing licensure requirements, and incentivizing participation by, for example, reimbursing providers quickly.
Megan Cole, an associate professor of health policy at Boston University, told Stateline there are other options states could pursue, such as raising taxes to offset the federal cuts and keeping reimbursement rates high. She also said Medicaid can ask primary care providers to start integrating preventive mental health screenings and services before care becomes acute and requires an emergency room visit.

Conclusion

In conclusion, Medicaid recipients are struggling to find mental health care due to low reimbursement rates and a shortage of mental health care providers. The potential cuts to Medicaid could exacerbate this issue, making it even harder for patients to access the! care they need. States have been trying to address this issue by increasing reimbursement rates, reducing administrative burden, and incentivizing participation. However, more needs to be done to ensure that Medicaid recipients have access to quality mental health care.

FAQs

Q: What is Medicaid and how does it affect mental health care?
A: Medicaid is a joint federal-state health insurance program that covers low-income people and people with disabilities. It is a major source of health care for people of color, but low reimbursement rates make it challenging for providers to see Medicaid patients, affecting access to mental health care.
Q: What are the potential cuts to Medicaid and how will they affect mental health care?
A: The potential cuts to Medicaid could reduce reimbursement rates, remove people from Medicaid rolls, or eliminate coverage for certain services, making it harder for patients to access mental health care.
Q: What can states do to address the mental health workforce shortage?
A: States can increase reimbursement rates, reduce administrative burden, create licensure compacts, and incentivize participation to address the mental health workforce shortage.
Q: How can Medicaid improve access to mental health care?
A: Medicaid can improve access to mental health care by integrating preventive mental health screenings and services into primary care, increasing reimbursement rates, and reducing administrative burden on providers.