Now that the Supreme Court’s ruling on the Affordable Care Act– including the individual mandate and Medicaid expansion (with an important limitation) – has had a few days to sink in, all eyes are turning toward the states to see what they will do about that limitation.
Here’s the limitation: the Supreme Court held that the federal government could provide the incentive to expand Medicaid – which under the ACA is 100 percent of the costs of expansion for the first year, with a gradual reduction to 90 percent over a 10-year period – but could not punish states by taking away any current Medicaid dollars if they did not expand.“They [the Court] thought they had to give the states something,” one Washington insider told Behavioral Healthcare, of the 26 states that opposed the ACA in the Supreme Court case.
The argument for the mandate was essentially that having health insurance is the right thing to do, since sooner or later everyone will need health care and health care isn’t free. But just because it’s the right thing to do, can the federal government require it (recall the discussion about whether the federal government could require people to eat broccoli, just because it’s good for you)?
The argument against the mandate, heard in the case NFIB v. HHS was headed up by small business employers. The National Federation of Independent Businesses, the lead plaintiff in the Supreme Court case, said its small business members could not afford to buy health insurance for their employees. The unspoken question is, of course, how can their employees, many of whom are paid low salaries, afford health insurance on their own? Health insurance on the open market for a family costs at least $17,000 a year in New York State, for example.
But the majority of the Supreme Court upheld the mandate, and with that, the rest of the ACA, with the exception of the “stick” part of Medicaid expansion. The “carrot,” which is huge, is still there.
While the individual mandate got a lot of attention in media coverage prior to the Court’s decision, the Medicaid expansion, under which people earning up to 133 percent of the federal poverty limit get free health insurance via an expanded Medicaid program, has been what public health and behavioral health treatment advocates for treatment have pinned their hopes on for 2014.
The National Council is “thrilled” that the Supreme Court upheld the ACA, but “disappointed” with the Medicaid expansion decision, says Chuck Ingoglia, vice president for public policy. Still, with Medicaid expansion paid for 100 percent by the federal government, wouldn’t every state want to do it? Probably not every state, he says. “Just looking at the math, they should,” he says. But there may be some governors who, for ideological reasons, will not want to do it. “Over the next two years, we have to work with governors and state legislatures,” he says. “There will probably be some states that choose not to expand Medicaid.”
The Medicaid expansion would, for the first time in memory, enable states to extend health coverage to childless, low-income adults, a population that is often neglected under current Medicaid programs. It would thus open up the possibility of medical and behavioral health treatment to many who have been unable to access it.
In all, the Medicaid expansion provisions of the ACA would provide coverage for 17 million currently uninsured Americans.
Medicaid managed care
When providers hear “Medicaid” in the context of the ACA decision, they should think “insurance company,” and of the need to justify each and every patient encounter, instead of providing whatever services they can with the regular check that comes from the state or county. Patrick Gauthier, director of Healthcare Solutions, a division of Advocates for Human Potential (AHP)is cautioning providers about this aspect of Medicaid expansion: it is more likely to be via managed care plans.
The majority of states are already contracting with managed care organizations to manage their Medicaid programs or are heading in that direction, says Gauthier. And economic pressures, in the wake of the Supreme Court’s ACA decision will only spur states toward greater use of Medicaid managed care contractors, even for states that might decide against a Medicaid expansion. “It may come in different guises under different names like ‘Coordinated Care Organizations’ (the term used in Illinois and Oregon) but the basic principle of having private entities — payers, administrators, utilization and benefit managers, as well as providers — integrate and assume some share of the financial risk to better control and contain finite resources will only make more sense and occur more often not less,” he adds.
This leads to other questions. Whether Medicaid managed care will have to comply with the parity rule is still unclear, says Gauthier. Medicaid managed care plans, while they do have to comply with MHPAEA the law, do not have to comply with the interim final rule (IFR) implementing the law. “The result is confusion at all levels,” says Gauthier. The field is waiting for the Centers for Medicaid & Medicare Services (CMS) to issue a final rule, as well as a specific directive that Medicaid managed care plans must comply with the final rule.
The health insurance exchanges that states are required to set up (or allow the federal government set up for them) will be marketplaces where people whose income is too high to qualify for Medicaid (134 percent of FPL or above) can buy insurance.
Under the ACA, small businesses with fewer than 50 employees do not have to purchase insurance for their workers, so these are the workers who will buy it on the exchanges, with federal health insurance subsidies available for all workers whose household incomes fall under 400 percent of the FPL. Some lower-wage workers may even qualify for Medicaid under terms of the expansion, particularly if they have children.
About 15 million currently uninsured people will be able to take advantage of the states’ health insurance exchanges; these people are expected to sign up on the exchanges, then compare pricing and benefits before making a selection. Within each state, a state-defined “essential benefit package” will help to simplify this process by requiring that a baseline package of health care services be made available in all health insurance policies (employer, exchange, Medicaid) sold in that state.
The federal Department of Health and Human Services says each state’s essential benefit package must include services within the following categories:
· ambulatory patient services,
· emergency services,
· maternity and newborn care,
· mental health and substance use disorder services, including behavioral health treatment,
· prescription drugs,
· rehabilitative and habilitative services and devices,
· laboratory services,
· preventive and wellness services and chronic disease management, and
· pediatric services, including oral and vision care.
Whether a beneficiary receives insurance through Medicaid, the exchanges, or an employer, their policy must include coverage for addiction and mental health treatment, under the ACA and under parity law. However, states have some latitude in determining the levels of care care to be required in their essential benefits package.
Mark Covall, president and CEO of the National Association of Psychiatric Health Systems, said in a statement that the Supreme Court decision “continues the positive national movement towards ensuring that mental health and addiction are on par with other medical conditions.” However, the chief piece of legislation to enforce parity, The Mental Health Parity and Addiction Equity Act (MHPAEA) passed in 2008, still does not have a “final” set of regulations for implementation, though interim final regulations have been available for some time.
And, while concerns about the enforcement of parity regulations have been temporarily overshadowed by the ACA decision, strong future enforcement of the MHPAEA remains essential if the behavioral health benefits enabled by the ACA are to be fully realized. Otherwise, Covall worries that these benefits could be eroded. If medical and surgical conditions are treated on an inpatient basis; behavioral health conditions must be too, on an equitable basis, under the MHPAEA. Under the ACA, the terms of the parity law are extended to small businesses and individuals, both inside and outside the health exchanges, Covall noted.
The Substance Abuse and Mental Health Services Administration (SAMHSA) didn’t wait for the Supreme Court’s decision before making plans to reshape the Substance Abuse Prevention and Treatment (SAPT) block grant starting in 2014. Today, the SAPT block grant pays for the majority of care for low-income individuals, but in 2014, SAMHSA plans to redeploy the grant to pay for wraparound services instead of treatment. This plan has caused concern among some state offices, since there is no guarantee under the ACA that everyone who needs treatment will have either Medicaid or private insurance coverage.
“While the Supreme Court ruling helps provide some clarity in terms of moving forward with ACA implementation, many questions remain unanswered in terms of the extent to which certain substance abuse services will be covered,” said Rob Morrison, executive director of the National Association of State Alcohol and Drug Abuse Directors (NASADAD). “For example, what will be included in each state’s essential health benefits package? What will each state’s Medicaid benchmark plan look like?” In the end, he says, each situation will be different depending on the state.
“As we focus on the SAPT Block Grant through the lens of the ACA, it is important to remind stakeholders that any changes to the program require Congressional discussion and approval,” adds Morrison. Any changes, including those through the SAPT block grant application, should be done in partnership with the states, he says. “And as we have said before, we need to see how implementation impacts state substance abuse systems before considering major changes to the SAPT block grant.”
A NASADAD study of care systems in Maine, Massachusetts, and Vermont showed that the SAPT block grant remains a critical funding source for substance use treatment because so many people who need treatment services will remain uninsured, even under reform. Study findings demonstrate that in three states which have already implemented health care reform, neither private insurers nor Medicaid covered certain services, forcing the states to depend on the SAPT block grant to pay for services including:
· Residential treatment;
· ‘Non-medical’ services such as case management, other recovery support services, housing, child care, transportation and employment counseling;
· Improvements to infrastructure of the state treatment system;
· Addressing new challenges;
· Implementing innovative services, and;
· Substance abuse prevention services.
Because of these findings, NASADAD does not recommend statutory changes to the block grant.
In general, expanded insurance coverage via Medicaid and private insurance will mean more premiums for health insurers — an estimated $1 trillion dollars in additional payments from newly-insured Americans between 2013 to 2020, according to Bloomberg —and more patients for behavioral health providers. However, experts also predict that providers will see managed care practices that are more reminiscent of the private sector than the public sector. AHP’s Gauthier says that, among the other implications of the Affordable Care Act for the behavioral health field are these:
· Waiting lists will no longer be acceptable.
· Health information technology will be key.
· Providers who are willing to assume some financial risk will do well.
· Behavioral healthcare providers in particular need to be more attuned to financial issues than ever before.
David Guth, CEO of Centerstone (Nashville, Tenn.),says the ACA ruling gave a huge boost to what treatment providers are trying to do – and had already started doing – which is helping patients by coordinating care and focusing on the whole person. “There are so many parts of [the ACA] that are important to us,” he says. “There’s a real focus on health outcomes, better coordination or care, and the elimination of the preexisting condition exclusion, something that plagued folks with serious and persistent mental illness.”
The coverage extension for people up to age 26 is also important because, says Guth, because many serious mental illnesses reach an acute stage during the late teens or young adulthood. “They usually have just aged out of their parents’ insurance, so this coverage extension provision is tremendously important,” he said.
While uncertainty remains as to how states will formulate their essential benefits packages, Guth asserts that there is greater awareness than ever before that mental health services cannot be provided without integration with other medical services. “We have seen the dialogue change in recent years,” he says. “All of us are looking at medical home in a more enlightened way than we were 10 years ago,” he adds, noting. “The medical home should be where the primary problem is.”
From a leader in the public health arena comes this message: good health isn’t only in the “facilities,” it’s in neighborhoods and communities. That is why the Robert Wood Johnson Foundation has, following the ACA ruling, committed resources to help states, communities, nonprofits, and private sector organizations “realize the full potential” of the ACA, said RWJF president and CEO Risa Lavizzo-Mourey, M.D.
“Improving access to stable, affordable health care is not a partisan issue to us,” she said in a statement, adding that the ACA brings the foundation “wonderfully close” to achieving its mission of improving quality health care.
But the law by itself won’t solve everything, she said. “Health care spending continues to rise and crowd out investments in other areas,” she said, noting that even for people with insurance, out-of-pocket costs are so high that the insurance plan itself is a barrier to people seeking help. “Furthermore, our health is not just something that comes from the doctor’s office. Community and neighborhood conditions have a significant effect on health.”
Alison Knopf is a freelance writer.