Health Insurance and Medicaid
The 2008 Federal Parity Law requires insurers to cover illnesses of the brain, such as depression or addiction,
no more restrictively than illnesses of the body, such as diabetes or cancer.
As rates of suicides and overdoses continue to climb nationwide, mental health parity is more important than ever. Unfortunately, many insurers are still not following the law.
On November 13, the federal government released groundbreaking new guidance to expand and improve mental health services under Medicaid. This new policy will permit states to apply for a waiver that will allow Medicaid to pay for short-term (a statewide average length-of-stay of 30 days) inpatient treatment services in an “institution for mental disease (IMD)”—a facility of 16 or more beds that primarily provides mental health treatment.
Why is this important for people with mental health conditions?
Currently, the law prohibits states from using Medicaid to pay for care provided in an IMD. This discriminatory exclusion has been part of the Medicaid program since Medicaid’s enactment in 1965, and it has resulted in unequal coverage of mental health care.
People with mental health conditions—just like people with any medical condition—need a range of care options from outpatient services to hospital care. Updating the IMD exclusion to allow for short-term stays in psychiatric hospitals helps strengthen the system and provides people who rely on Medicaid with more treatment options.
Was NAMI involved in making this change?
Yes. Changing the IMD exclusion has long been a priority for NAMI. Last year, NAMI CEO Mary Giliberti was appointed to a federal committee tasked with making recommendations that will improve the lives of people with mental health conditions. Waiving the IMD exclusion was a major recommendation of that committee and a focus of the committee’s work this year.
When will these changes happen in my state?
Nothing happens automatically. This policy change will not happen unless your state Medicaid program applies and is approved for a demonstration waiver with the federal Centers for Medicare & Medicaid Services (CMS). NAMI strongly urges states to step up to the plate and use this flexibility from CMS to improve care for people with mental health conditions.
Will this take resources away from community-based care?
No. In order for CMS to approve a state’s request for payment in IMDs, states must commit to taking a number of actions to improve community-based mental health care. These commitments to improving community-based care are linked to a set of goals that will include actions or milestones to:
- Ensure good quality of care in IMDs,
- Improve connections to community-based care following stays in acute care settings,
- Ensure a continuum of care is available,
- Provide a full array of crisis stabilization services, and
- Engage people in treatment as soon as possible.
In fact, the new guidance specifies that federal funding will be withheld if states are not making adequate progress on meeting the milestones and the required performance measures. NAMI believes this new policy has the potential to both improve access and quality of care in IMDs and to improve community-based services.
What else is in the guidance?
In addition to the IMD waiver opportunity, the guidance also outlines existing options that states can use to support innovative service delivery systems for people with mental health conditions. Specifically, the guidance highlights options for:
- Coordinated Specialty Care for early psychosis
- Earlier identification and engagement in treatment
- Improved data-sharing between system partners, like criminal justice and mental health
- Integration of mental health care and primary care
- Crisis stabilization services
- Tele-mental health
- Registries of available mental health providers
- School-based mental health care
- Care coordination and transitions to community-based care
- Delivery of evidence-based services, such as supported employment and education
How can you help?
In order for changes to become a reality in your state, your Medicaid agency must develop a proposal and submit it to CMS. We encourage you to get involved now. Every state’s proposal will look different, and you can be a part of shaping the proposal to meet the needs in your state.
Here are some ways you can take action:
- Encourage your state Medicaid program to apply for this waiver
- Start a dialogue with your state mental health program director
- Review the guidance and think about what is important for your state to do to improve the lives of people with mental health conditions
- Identify other organizations who can join with you
- Request a meeting with your state Medicaid agency so you can share your thoughts about what should be included in the state’s proposal
- Build public and state legislative support for approving the state’s Medicaid waiver proposal
Once a proposal is developed, your state is required to seek public input from stakeholders. However, we encourage you to get involved at the ground level so you can shape the proposal rather than simply comment on it.
- Wellness & disease management
- Prescription drugs
- Laboratory services
- Emergency services
- Maternity & newborn care
- Children’s care, dental & vision
- Rehabilitation & habilitation
- Mental, behavioral health & substance use care
- Outpatient clinic services
In the public sector the primary funding source for mental health services is Medicaid, the joint federal/state health financing program for the poor. As you can see from the pie chart on your handout, Medicaid pays for almost half of all public mental health services.
- Every state Medicaid program is different. Known by different names in each state, regulations regarding who qualifies also vary by state. Until now the program has been limited to low income children, mothers of young children, frail elders and people with disabilities who get Supplemental Security Income (SSI). We’ll talk in greater depth in a while, but in 2014, many states will add eligibility based on income alone. Benefits also vary by state, but Medicaid generally covers outpatient mental health treatment, case management, crisis intervention, partial hospitalization, prescription drugs and long term care. In some states Medicaid may cover additional services such as psychosocial rehabilitation, peer support and intensive interventions such as Assertive Community Treatment (ACT). By law Medicaid does not cover state hospital or specialty psychiatric hospital care for adults ages 22-64. Called the institutions for Mental Disease (IMD) exclusion, this outmoded policy is changing in some states.
- The Children's Health Insurance Program, or CHIP, is a federal/state health program for children up to age 19. Income eligibility varies by state but in most cases is 200 to 250 percent of the federal poverty level* and states may set premiums and cost-sharing on a sliding scale. The state CHIP program is not required to cover mental health benefits, although if mental health services are covered it must be at parity with other medical conditions. CHIP typically pays for inpatient care, outpatient mental health treatment, emergency care and prescription drugs Some CHIP plans may include additional mental health services or the full range of the state Medicaid plan's mental health services.
- Medicare is a federal program that provides coverage for seniors and people under 65 who have received Social Security Disability Insurance (SSDI) benefits for at least 24 months. People with low incomes who are enrolled in Medicare may also be eligible for Medicaid coverage. These people are known as dual eligibles. Medicare benefits are the same nationwide and include inpatient hospitalization, partial hospitalization, outpatient services with licensed mental health professionals, emergency care and prescription drugs. Medicare does not cover case management, psychosocial rehabilitation or peer support. Until now copayments for mental health services have been higher than for other types of care, but by January, 2014 they will be reduced to 20 percent to be on par.
- Military and veterans coverage includes TRICARE and Veterans Health Administration (VHA) benefits. TRICARE covers active duty and retired service members and their families, including the National Guard. Benefits are similar to private health care. VA benefits are more extensive although eligibility is more limited.
- State and local community mental health programs are funded with tax dollars. Typically these programs fill system gaps with a wide range of services to a limited number of uninsured people who have high mental health needs. People on Medicaid may get non-Medicaid-billable services from public mental health programs, such as state psychiatric hospital or housing supports.
- The majority of private health insurance is provided through employers although Americans are increasingly on their own to purchase a private plan. We are not going to go into all of the different types of private insurance in this presentation. Suffice it to say that private insurance benefits usually include a narrow range of clinical care such as inpatient hospitalization, partial hospitalization, outpatient mental health services, emergency care and prescription drugs. On the other hand, because private insurance pays better rates to providers than Medicaid it may be easier to find professionals in your plan’s network.
This is just a brief overview of current health care financing in the US. The patchwork of health coverage opportunities is fraying at the seams, leaving many without the care they need - even while costs rise to the breaking point for individuals, employers and governments.
Something had to be done, so in 2010, Congress passed the Patient Protection and Affordable Care Act, or ACA. Let’s talk about how the health reform law affects people living with mental illness.