Do Not Turn Out the Lights on the PublicMental Health System When the ACA is FullyImplemented

Howard H. Goldman, MD, PhDMustafa C. Karakus, PhD

Abstract

When all of the insurance and health care reforms of the ACA are fully implemented, somepublic financing needs for behavioral health services will remain. This commentary outlines anumber of the residual functions of the public mental health system in an ACA world, and itidentifies opportunities for expansions of service areas not covered by traditional insurance or thehealth delivery reforms for behavioral health services within the scope of the ACA.

When all of the insurance and health care reforms of the ACA are fully implemented, somepublic financing needs for behavioral health services will remain. This commentary outlines anumber of the residual functions of the public mental health system in an ACA world, and itidentifies opportunities for expansions of service areas not covered by traditional insurance or thehealth delivery reforms for behavioral health services within the scope of the ACA. (The latter areaddressed in the paper by Beronio, Glied and Frank1 in this issue.)

This commentary identifies an ongoing but altered role for state behavioral health agencies in anera of ACA health insurance and health care reform. The public behavioral health services systempre-dates health insurance by a century, offering services to indigent individuals, and, since theadvent of health insurance, it has provided services to individuals who lacked health insurance.After the full implementation of the ACA, some of its functions will be diminished, if noteliminated entirely, however, some functions will remain.

Our commentary considers several areas of public behavioral health services financing andadministration:

1. Services for populations not covered by the ACA (e.g., undocumented immigrants andindividuals who decline insurance coverage)

Address correspondence to Mustafa C. Karakus, PhD, WESTAT, 1600 Research Blvd., Rockville, MD 80205, USA.Email: mustafakarakus@westat.com.

Howard H. Goldman, MD, PhD, Department of Psychiatry, University of Maryland School of Medicine, 1501 S.Edgewood St., Suite L, Baltimore, MD 21227, USA. Email: hh.goldman@verizon.net

Journal of Behavioral Health Services & Research, 2014. 1–4. c) 2014 National Council for Behavioral Health. DOI10.1007/s11414-014-9394-y

Do Not Turn Out the Lights on the Public Mental Health System GOLDMAN, KARAKUS

2. Services not included at all in traditional health insurance (e.g., supported housing and long-term institutional care, particularly of felons and other “dangerous” groups, such as “sexualpredators”)

3. Services only partially covered within traditional insurance (e.g., supported employment andeducation, Assertive Community Treatment [ACT], wrap-around and therapeutic foster care)

4. Services for newly identified priority service populations, requiring services not entirelywithin traditional insurance coverage (e.g., first episode psychosis services) and notpreviously a priority population (e.g., individuals at risk for psychosis)

We do not consider the consequences of the decision by States to not expand Medicaid, as it ishoped that soon, all States will participate fully in the ACA expansions. States that opt out ofMedicaid will continue to have large numbers of uninsured individuals using public behavioralhealth services. This status quo issue is beyond the focus of this brief essay. We focus onconsiderations that obtain in all States, even with full implementation of the ACA.

Services for Populations Not Covered by the ACA

There are certain populations that will not be covered by the ACA. For example, unauthorizedimmigrants will be ineligible for expanded Medicaid coverage and for subsidized coverage inexchanges. They will not be eligible for Medicaid or Children’s Health Insurance Program (CHIP)coverage or for exchange subsidies under the ACA and will not be permitted to purchaseunsubsidized coverage through the exchange. They are not subject to the mandate and are excludedfrom temporary high-risk pools but will remain eligible for emergency care under Medicaid, if theywould otherwise meet the eligibility criteria for Medicaid.2 While some states may continuecovering undocumented children with state funds, they are not bound to do so under the ACA.

Immigrants are heavily clustered in several states, and in particular geographic regions. Forexample, nearly a quarter of the unauthorized immigrants live in California.3 Researchers estimatethat slightly more than 1 million people in California will not be eligible for coverage optionsunder the ACA due to immigration status in 2019.4 However, undocumented immigrant maybenefit from the fact that other family members, who are documented, will be able qualify forMedicaid or subsidized coverage. In addition to unauthorized immigrants, there is a specific ACAprovision related to the exchanges that could significantly affect county jails. The law states that“…an individual shall not be treated as a qualified individual, if at the time of enrollment; theindividual is incarcerated, other than incarceration pending disposition of charges.” However, asubstantial number of individuals that enter into county jail custody have serious medical andbehavioral health needs and would benefit greatly from treatment to address these conditions. Thisprovision will likely allow eligible individuals in custody pending disposition of charges to enrollin a health insurance plan offered through an exchange prior to conviction, or maintain coverage ifthey are already enrolled.

State behavioral health authorities will be expected to provide services for such unauthorizedimmigrants, along with individuals who opt out of Medicaid or other health insurance under theACA. As noted above, there is a continuing role for State behavioral health authorities or someresidual service function in States that do not adopt the Medicaid expansion.

Services Not Included at All in Traditional Health Insurance

State behavioral health service systems provide some services that are not a part of acute carehealth insurance benefits, such as those expected to be available through the ACA healthexchanges or the Medicaid expansion. Although some of the long-term care and support servicesresemble the Medicaid long-term care and nursing home benefit, for the most part, these services

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are never covered by private insurance or Medicare. Even though long-term hospitalization hasbeen a feature of the public mental hospital since the mid-19th century, Medicaid does not pay forcare in so-called “institutions for mental disease” (IMDs) for beneficiaries between the ages of 22and 64 years. Many of the rules in Medicare, Medicaid, and private insurance excluded such carefrom coverage because of the existence of the public mental health system. While some of thiscustodial, supportive, long-term care is provided in nursing homes, some continues to be providedin public mental hospitals.

Forensic psychiatric patients are one special population increasingly served in public mentalhospitals, funded entirely by State and local dollars, with little or no insurance coverage. They willcontinue to need services, funding, and administration under the ACA. State mental hospitalsprovide evaluation, care, and treatment to individuals who are charged with crimes and areawaiting trial and sometimes a return to competency to face their charges. Other individuals havebeen adjudicated as not guilty by reason of insanity and have been committed to psychiatrichospital care. Still others, such as so-called sexually dangerous predators, may have beentransferred from prisons at the end of their criminal sentences because they remain a danger to thepublic. In each of these instances, and for all long-term psychiatric care, the ACAwill not eliminatethe need for State and local finances and some residual form of behavioral health servicesadministration.

Some of this free, indigent care counted toward Medicaid disproportionate share hospital (DSH)payments from Medicaid to States, but the ACA cut these payments by half. It was argued thatStates would have far less indigent care in DSH facilities with the expansion of health insurancecoverage, but that is not the case for state mental hospitals, which have IMD status in Medicaid.Even States that do not participate in the ACA Medicaid expansion will lose half of their DSHpayments, further exacerbating funding for services.

Some specific services also fall entirely outside the framework of health insurance. During theperiod of reductions in the resident population of mental hospitals, reformers recognized the role ofthe public mental hospital in providing a residence for disabled individuals. Once discharged fromcare, many individuals were unable to provide for their own independent living expenses and forsupport services they might need to stay housed. Supported housing was an approach to providehousing to individuals who lacked the means to obtain and maintain safe and affordable housing.States wishing to continue or initiate supported housing schemes will get no relief from the ACAother than the role of health insurance in paying for acute care services used by individuals insupported housing settings. Provision of supported housing and other residential supports are alsocontinued roles for a public behavioral health system and State or local behavioral health authority.

Services Only Partially Covered Within Traditional Insurance

Traditional insurance is the model for the benefits to be included within the essential benefits forbehavioral health care in the ACA. The traditional insurance benefits model covers inpatient andoutpatient services, including psychotherapy and office visits, plus some coverage for a variety oflower and higher intensity services, such as partial hospitalization and intensive outpatient services.It also covers standard diagnostic tests, such as imaging, laboratory evaluations, and psychologicaltests, medications, and some procedures, such as electro-convulsive treatments. Some rehabilitationservices should also be included in the behavioral health benefit design, but they are likely to besimilar in intensity and duration to rehabilitation following orthopedic surgery or a myocardialinfarction. Rehabilitation services are likely to be limited to a few sessions and a requirement forsubstantial justification for longer periods of rehabilitation. The services will not be long-term orsupportive.

Medicaid services under the ACA may include some longer-term and supportive home-and-community-based services, but it will be left to State discretion that will be covered in each State

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Medicaid plan. Medicaid benefits for the ACA expansion population may be more restrictive thanthose for individuals in the current Medicaid program, such as those who qualified on the basis ofdisability and are Supplemental Security Income beneficiaries or who might be dually eligible forMedicaid and Medicare. The ACA offers States the option to amend their Medicaid plans toinclude home-and-community-based services under Section 1915i of the Social Security Act. Theymay amend their State Medicaid plan to cover some of the evidence-based services that are nottypical benefits in private insurance, such as assertive community treatment (ACT) or supportedemployment for adults with severe and persistent mental disorders or wrap-around services forchildren with serious emotional disturbances.

If States are to offer comprehensive behavioral health services to their populations, they willneed to finance the full array of needed, effective services. They can accomplish this goal bycombining the use of health insurance with continued use of some categorical behavioral healthservices funded from State and local budgets or from other federal programs outside the ACA.Among these federal resources are the behavioral health block grants from Substance Abuse andMental Health Services Administration (SAMHSA), the Veteran’s Health Administration, andother human services and community block grants, such as for vocational rehabilitation or housing.

States will need some continued degree of behavioral health expertise and administration tomanage the non-insurance-based funding for services. Some behavioral health expertise will alsobe useful for health insurance agencies to oversee informed insurance benefit design and guide themanagement of behavioral health services.

Services for Newly Identified Priority Service Populations

Individuals in the early stages of the behavioral health conditions are a new priority population.Under the Medicaid expansion of the ACA, individuals experiencing their first episode ofpsychosis can benefit greatly from early treatment and prevention services. Prior to theimplementation of the ACA, most of them could not qualify for Medicaid because they did notqualify for Supplemental Security Income (SSI), as they are not significantly disabled at this earlyphase of their psychotic illness. Under the ACA, single non-disabled adults can qualify forMedicaid on the basis of income without qualifying for SSI. In addition, some early psychosispatients will be able to remain on parents’ health insurance for longer because of the ACA; otherswill be able to qualify for health insurance on the exchanges without fear of being disqualifiedbased on psychosis as a pre-existing condition. However, for effective treatments in psychosis,implementation of an integrated set of evidence-based services delivered early in the course ofpsychosis is very much needed. There is a strong evidence base for many services in clinical usefor treating psychosis, but they are not routinely available in practice. However, other supportiveservices such as family psycho-education, skills training, and supported employment, although allhave been demonstrated to be effective in treating psychosis and schizophrenia, will not necessarilybe covered by Medicaid or other health insurance plans in the exchange.5

Implications for Behavioral Health

This commentary identified four main areas of continued need for public mental health services,financing, and administration. Even as the benefits of full implementation of the ACA are realizedby the behavioral health services system, there will be populations in need of publicly financedservices and service programs that will need public finances to operate. Furthermore, there willneed to be a state agency to finance and oversee these residual functions with expertise. They willneed to stick around, even though some would have them leave and turn out the lights as some oftheir historic functions are in decline. State behavioral health agencies also may be able to turn onsome new lights to promote recovery for individuals diagnosed with mental disorders in the USA

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as it enters the full implementation of the ACA. Originally, these agencies served only individualswho lacked health insurance or had no other means to pay for their care. Under the ACA, they mayserve all the citizens of a State, providing or financing some of the behavioral health care that is notincluded in traditional health insurance.

Conflict of Interest None.

References

1. Beronio K, Glied S, Frank R. How the Affordable Care Act and The Mental Health Parity and Addiction Equity Act will Expand Coverageof Behavioral Health Care. Journal of Behavioral Health Services & Research. 2014; In this issue

2. Passell JS, Cohn D. Unauthorized Immigrant Population: National and State Trends, 2010. Pew Hispanic Center. Available online at http://www.pewhispanic.org. Accessed June 15, 2013.

3. Lucia L, Jacobs K, Dietz M, et al. After Millions of Californians Gain Health Coverage under the Affordable Care Act, who will RemainUninsured? UC Berkeley Center for Labor Research and Education; UCLA Center for Health Policy Research. September 2012.

4. National Immigration Law Center. Affordable Care Act. Available online at http://www.nilc.org/immigrantshcr.html. Accessed June 15,2013.

5. Goldman H, Karakus M, Frey W, et al. Economic grand rounds: financing first-episode psychosis services in the United States. PsychiatricServices. 2013, 64(6): 506-508

Do Not Turn Out the Lights on the Public Mental Health System GOLDMAN, KARAKUS