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Doubts about Medicaid Expansion: Practical or Political? (Part two)

September 25, 2012
by Alison Knopf, Contributing Writer
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[[READ PART ONE OF THIS ARTICLE]]

The numbers behind the expansion

Under the ACA, 30 million currently uninsured people will gain health insurance. Joel Miller, senior director for policy of the National Association of State Mental Health Program Directors (NASMHPD), said one-third of these – 11-12 million people – will have a behavioral health condition. Of these, about 60 percent of these new behavioral health care costs under the ACA will be covered through the expansion of Medicaid, and about, and about 40 percent will be covered by insurance purchased through the exchanges.”

“We know that some of the states are concerned that if they do expansion that other residents will come out of the woodwork,” said Miller. “They think their healthcare systems don’t have the capacity to treat these people.”

“The rhetoric is that they can’t handle the costs,” he added. “But a lot of people with no coverage end up in the emergency room, or get readmitted, so hospitals see their uncompensated care costs go up.”

Unfortunately, said Miller, many people with a serious mental illness, even though they are eligible for Medicaid, are not enrolled, and end up “going through the criminal justice system, getting uncoordinated care, or homeless.”

“It would be penny-wise and pound-foolish not to opt in for Medicaid expansion,” said Miller. It’s a good bet that NASMHPD members agree, but few of these state behavioral health directors  would speak to Behavioral Healthcare on the issue, presumably because the issue has placed so many of their bosses—state governors—on the hotseat.

 

One state’s plan for the expansion

One, however, did step forward:Brian M. Hepburn, M.D., executive director of the Mental Hygiene Administration of the Maryland Department of Health and Mental Hygiene.

He said that Maryland is already well on its way to expanding Medicaid, and is way ahead of the naysaying states in covering people for behavioral health problems. He suggested that Maryland could well be a model for states to follow.

“Most persons with serious mental illness are already covered for their mental health treatment through programs for the uninsured if they do not qualify for Medicaid or have other insurance,” Hepburn said. However, he added, they don’t have coverage for physical problems so Medicaid expansion will be very beneficial for them.  

“This will enable individuals to get the needed services for their substance use and for their physical problems,” said Hepburn. “We are anticipating that the expansion population will have less severe mental health issues but more severe substance use problems.”

Currently, the state’s mental health benefit is through a carve-out, with mental health services paid through Value Options on a fee-for-service basis. This is a full service benefit package which includes inpatient and outpatient treatment, and rehabilitation. Of the individuals getting services, 45 percent are under age 21. Substance abuse treatment is not carved out, but delivered by the HealthChoice managed care organizations. The benefits package only covers inpatient treatment for detoxification.

Under the Medicaid expansion, the benefits package will be similar but with more flexibility in the use of technology, such as telemedicine. That may be necessary in order to accommodate the increase in demand, Hepburn said. There will be increased efforts to make people aware of their eligibility and to get them enrolled.

“We are expecting a decrease in costs for those persons currently getting services paid for with only state dollars but who are eligible for Medicaid under the expansion,” said Hepburn. “We are being cautious because there are services that are needed for recovery that are not covered by Medicaid, such as housing and supported employment.”

Gov. Martin O’Malley and Joshua M. Sharfstein, M.D., Secretary of the Department of Health and Mental Hygiene, have no political problems with Medicaid expansion. “They want Maryland to be one of the first states to comply with the ACA,” Hepburn said. “We’ve moved ahead with the health insurance exchange.”

 

Too good to pass up?

Like all behavioral healthcare advocates, Hepburn finds Medicaid expansion under the ACA to be an obviously good deal – too good to pass up, even if only on fiscal grounds. “The fact that the federal government is paying almost 100 percent of the costs, especially considering the problems states have had since 2008 with the recession, makes it pretty hard to object to Medicaid expansion, unless the objection is politically motivated,” said Hepburn. 

Indeed, it can be argued that the states with the worst current Medicaid programs stand to gain the most through the Medicaid expansion, while states with more comprehensive Medicaid programs stand to gain relatively less. Hepburn notes that Maryland will have gone so far toward expanding Medicaid by 2014 that its federal share for expansion will be relatively small. Through its adult care waiver, the state has, essentially, been moving ahead with its own Medicaid expansion for many years. And, it has done so with its usual federal Medicaid match—just 50 percent.

“I can’t believe that states will leave 100 percent federal funding on the table,” said Hepburn. “Many of those states are having big time trouble financially right now. To say that they’re afraid of what’s going to happen down the road – well, right now what’s happening is that people who are uninsured are using high-cost services—emergency rooms and inpatient services.” The uninsured have been a significant cost driver, he said.

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