Proposal Would Increase Medicaid Access to Substance Abuse and Mental Health Benefits

A rule proposed this week by the Obama Administration would allow Medicaid recipients who receive services through managed care organizations or alternative benefit plans to get the same access to substance abuse and mental health benefits as those provided by private health insurance.

About 70 percent of people covered by Medicaid are in managed care plans, The Wall Street Journal reports.

Under the Mental Health Parity and Addiction Equity Act of 2008, health insurance and group health plans must provide the same level of benefits for mental or substance abuse treatment as they provide for medical and surgical care. Under the new proposal, certain provisions of that law would now apply to Medicaid and the Children’s Health Insurance Program.

The new proposed rules would not change state limits on mental health coverage for Medicaid fee-for-service plans, but would ban limits for Medicaid recipients in managed care plans.

The proposal would mean that plans no longer could have hard limits on coverage such as a certain number of mental health visits in a year, according to Kaiser Health News. Medicaid would have to provide an explanation if it denies treatment for a mental health or substance use disorder.

In a statement, the National Association of Medicaid Directors said, “In the historical absence of effective parity rules and regulations, Medicaid has quietly become the largest payer of mental health services in the country, in part because other payers have been able to shift these costs onto the safety net.”

The group noted in the short term, the rule will result in additional costs for Medicaid programs. Matt Salo, Executive Director of the group, noted about 30 percent of all Medicaid dollars are spent on individuals with behavioral health needs. The regulations may cost state governments $150 million in the near term, he said.