$6.9B in Medicare Expenditures for Mental Health Care Costs
By - Many individuals receiving care under the Medicaid umbrella lack insurance protection regarding mental health expenditures. A limitation of such coverage was lifted via the implementation of Mental Health Parity and Addiction Equity Act (MHPAEA) which bans instances of mental health discrimination.
Mental health care costs hit $48 billion annually from 2009 to 2011 for adult individuals between the ages of 18 and 64. Almost half of this cost – $22 billion – was spent on prescription medicines. Healthcare expenses for 28 million individuals during this time frame were directly related to mental health diagnoses. One-third of adult mental health disorder expenditures from 2009 to 2011 were paid for by private insurers. Medicaid covered about a quarter of this segment, totaling 24.2 percent – $11.7 billion – with Medicare paying for 14.3 percent – $6.9 billion. Remaining expenditures were paid for via a variety of sources, including TRICARE, Workers’ Compensation, governmental aid, private insurance, and veterans’ benefits. All of the aforementioned financial numbers, as reported by the Agency for Healthcare Research and Quality (AHRQ), are heavily impacting the Medicare population.
Last month, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that directly concentrated on MHPAEA efforts across the Medicaid spectrum. According to one facet of the proposed rule, a state must provide documentation demonstrating adherence to MHPAEA for Medicaid managed care plans contracts for CMS’ approval, regardless of whether or not enrollees receive out-of-network mental health benefits.
Small Medicaid percentage accounts for half of expenditures
Additional research from the Government Accountability Office (GAO) confirms the high cost burden of the Medicaid population. A small percentage of Medicare and Medicaid enrollees account for a large percentage of total costs, confirms GAO. From 2009 to 2011, a tiny percentage – 5 percent – of Medicaid-only enrollees, those not dually eligible for Medicare, accounted for almost half of Medicaid enrollee expenditures, GAO maintains. Conversely, 50 percent of Medicaid-only enrollees encompassed less than 8 percent of expenditures.
“Differences between the high-expenditure Medicaid-only enrollees and the larger group of all Medicaid-enrollees were also consistent across years,” confirms GAO. “In each year, the percentage of high-expenditure Medicaid-only enrollees who had any one of these conditions or services was greater than the percentage of all Medicaid-only enrollees who had that same condition or service,” GAO states.
Mental health conditions were present in less than 15 percent of Medicaid-only enrollees. Individuals with various mental health conditions made up half of the high-expenditure group annually. Additionally, although psychiatric facility care represented 2 percent of expenditures for high-expenditure Medicaid-only enrollees, this number increased up to 11 percent, depending on the state. Mental illness is generally a large impetus of high cost. The most expensive Medicaid enrollees generally have numerous chronic conditions, says GAO.
Affordable Care Act initiatives
The influence of the Affordable Care Act (ACA) upon hospitals continues to exponentially expand across those states that expand their Medicaid programs, says a recent report from the Kaiser Family Foundation.
Those states that expanded Medicare under the ACA are reported to be saving millions of dollars, says research from the Robert Wood Johnson Foundation (RWJF) c/o Manatt Health Solutions. “Historically, many states have supported programs and services for the uninsured — mental and behavioral health programs, public health programs, and health care services for prisoners — with state general fund dollars,” confirms RWJF. “With expansion, many of the beneficiaries of these programs and services are able to secure Medicaid coverage in the new adult category, which means states can fund these services with federal — not state — dollars.”
Although some states claim such expansion is simply too costly to execute, a supplemental statement from RWJF in relation to these findings suggests, “As a result of Medicaid expansion, states have seen budget savings and revenue gains without reducing services. In some states, budget savings could offset the cost of expanding Medicaid through 2021.”
Advancing the overall quality of healthcare delivered and strengthening increased access to care creates a healthier and happier Medicare and Medicaid population. It is hopeful cost-effective access to effectively implemented mental health services and substance use disorder services will collectively progress the healthcare industry.
