Medicaid Expansion and Health Insurance Coverage and Treatment Utilization among Individuals with a Mental Health Condition

Abstract

Background: The Affordable Care Act (ACA) gives states the option of expanding Medicaid coverage to low-income individuals; however, not all states have chosen to expand Medicaid. The ACA Medicaid expansions are particularly important for Americans with mental health conditions because they are substantially more likely than other Americans to have low incomes.

Aims of the study: We examine the impact of Medicaid expansion on adults who were newly eligible for Medicaid using the 2008-2017 Medical Expenditure Panel Survey (MEPS).

Methods: We use the AHRQ PUBSIM model to identify low-income adults aged 19-64 who were either newly Medicaid eligible if they lived in an expansion state or would have been eligible had their state opted to expand its Medicaid program. We estimate linear probability models within a difference-in-difference framework. An additional interaction term allows us to test for differences among those with serious psychological distress (SPD) or probable depression (PD). Outcomes of interest are insurance coverage by type, behavioral health treatment by service (specifically, any behavioral health treatment, any specialty treatment, any psychotropic medication, any ambulatory treatment outside of an emergency department, and any emergency department treatment), quantities of behavioral health treatment services, and out of pocket spending on healthcare.

Results: Our adjusted difference-in-differences estimates indicate Medicaid expansion increased any insurance coverage by 14.2 percentage points and increased Medicaid coverage by 21.2 percentage points. Insurance coverage for individuals with SPD/PD in expansion states increased by an additional 12.9 percentage points. Medicaid expansion did not have an effect on behavioral health treatment for the newly eligible population as a whole or for the subset with SPD/PD.

Discussion: Consistent with previous Medicaid expansions, we find that the ACA Medicaid expansions substantially increased insurance rates for the newly Medicaid-eligible population, regardless of mental health status but the overall effect on insurance coverage was stronger among those with SPD/PD. The lack of an effect on treatment use suggests that providing insurance coverage alone may be insufficient to guarantee that people with mental illness will receive the treatment they need. Limitations include that our difference-in-difference estimator may not account for time-varying factors that change contemporaneously with the expansions. Our estimates may also be affected by other provisions of the ACA that went into effect at the same time as the Medicaid expansions. IMPLICATIONS FOR HEALTH CARE PROVISION AND USE AND IMPLICATIONS FOR HEALTH POLICIES: Although the ACA has resulted in increased coverage for low-income individuals, more outreach efforts may be needed to encourage individuals with mental illness to get the treatment they need.