Adult Behavioral Health Benefits in Medicaid and the Marketplace

Introduction

Behavioral health encompasses both mental illnesses and substance use disorders. In 2013, an estimated 10 million adults (or 4.2 percent of all adults) had a mental illness that seriously impaired their functioning (serious mental illness, SMI),¹ and an estimated 20.3 million adults (8.5 percent) had a substance use disorder involving alcohol or illicit drugs in the past year.² There is some overlap between these groups, with 2.3 million adults (23.1 percent of adults with SMI in the past year) experiencing SMI co-occurring with a substance use disorder.³ SMI includes a range of conditions, such as anxiety disorders, bipolar disorder, major depression, schizophrenia, and post-traumatic stress disorder.

Medicaid plays a key role in financing behavioral health services, accounting for 26% of spending on behavioral health care nationally.⁴ Examples of behavioral health services include psychotherapy, prescription drugs, day treatment, case management, crisis intervention, peer support, assertive community treatment, and supported employment. Prior to the implementation of the Affordable Care Act’s (ACA) coverage expansion, in 2009, 35 percent of non-elderly adult Medicaid beneficiaries had a chronic behavioral health condition, likely reflecting Medicaid eligibility rules that extend coverage to people with substantial health needs.⁵

However, not all adults with behavioral health diagnoses receive treatment services. In 2013, 11 million adults (4.6 percent of all adults) reported an unmet need for mental health care in the past year, with 5.1 million of these adults receiving no mental health services during that time. Of these 5.1 million adults, the most common reason cited for foregoing services was the inability to afford the cost.⁶ Also in 2013, 22.7 million persons aged 12 or older needed treatment for an illicit drug or alcohol use problem (8.6 percent of persons aged 12 or older). Of these individuals, 20.2 million persons (7.7 percent of the population aged 12 or older) needed treatment for an illicit drug or alcohol use problem but did not receive treatment in the past year. The most common reason cited for not receiving substance use treatment was no health care coverage and inability to afford cost of the treatment.⁷

People may be unable to afford the cost of health care because they are uninsured. While lower than the prevalence among Medicaid beneficiaries, a sizeable share — 13 percent — of low-income non-elderly uninsured adults had a chronic behavioral health condition in 2009.⁸ The actual rate of behavioral health conditions among uninsured adults may be even higher, as this population is more likely than those with coverage to have undiagnosed chronic illnesses.⁹

As of 2014, many previously uninsured adults may be newly eligible for Medicaid in states that choose to implement the ACA’s coverage expansion or for subsidized coverage through a qualified health plan (QHP) in the Marketplace.¹⁰ As additional people become insured under the ACA, policymakers and other stakeholders can be helped by a better understanding of the benefits and challenges that adults with behavioral health needs are likely to experience when applying for coverage through Medicaid, selecting an individual plan on the Marketplace, or moving between Medicaid and Marketplace coverage as their income changes. People with behavioral health diagnoses will need clear information about which services specifically are and are not covered to make meaningful comparisons among plans when shopping for coverage.

This issue brief analyzes specific specialty behavioral health services covered by state Medicaid programs (including the benefit packages for adults newly eligible for Medicaid under the ACA’s expansion) and Marketplace QHPs in four states: Arizona, Colorado, Connecticut, and Michigan. We identify similarities and differences in Medicaid and QHP coverage of behavioral health services across these states as well as similarities and differences in behavioral health coverage between Medicaid and QHPs generally and between different QHPs within each state. Detailed coverage information for all plans analyzed in each study state is included in Appendix A, and Appendix B provides brief background about each state’s Medicaid program.