Medicaid disenrollment leads to reduction in healthcare use among people with mental health disorders

Reviewed by James Ives, M.Psych. (Editor)Jul 22 2019

For Medicaid enrollees with mental health disorders, losing Medicaid coverage leads to lasting reductions in overall healthcare use, and in outpatient mental health treatment specifically, reports a study in the July issue of Medical Care. The journal is published in the Lippincott portfolio by Wolters Kluwer.

"Insurance loss after disenrollment from Medicaid leads to a persistent disruption in the receipt of healthcare services for beneficiaries with mental health disorders," according to the new research by Janet R. Cummings, PhD, and colleagues of Rollins School of Public Health, Emory University, Atlanta. They discuss the implications for state and national policies affecting healthcare access for low-income adults with mental health disorders.

One-third reduction in outpatient mental health services after medicaid disenrollment

The largest payer of mental health services in the United States, Medicaid accounts for more than one-fourth of all behavioral health spending. Medicaid expansion under the Affordable Care Act has greatly increased access to treatment for Americans with mental health disorders.

"Despite the critical role of Medicaid for beneficiaries with mental health disorders, disruptions in Medicaid coverage are common," Dr. Cummings and coauthors write. They note that many factors can lead to Medicaid disenrollment, including income fluctuations and state recertification protocols.

The researchers compared patterns of healthcare use for people with Medicaid disenrollment versus those with continuous coverage. The study used federal data (from the Medical Expenditure Panel Survey, 1999-2015) on approximately 8,800 adults (under age 65) with mental health disorders and at least some Medicaid coverage.

About 32 percent of individuals lost Medicaid coverage and became uninsured at some point. Using their study data, the researchers could follow these individuals while they remained uninsured, for an average of nine months.

Medicaid disenrollment was followed by sustained reductions in healthcare use. There was an average 52 percent relative reduction in the likelihood of receiving any outpatient health service in a month, with a similar reduction in acute health services (emergency visit or hospital admission). The data also showed a 35 percent reduction in the likelihood of receiving any mental health-related outpatient services in a month after disenrollment.

The declines were greatest in the month after losing Medicaid coverage, but continued throughout the next half-year while the person remained uninsured. Total healthcare costs decreased by 71 percent (an average decrease of $207 per person per month) after Medicaid disenrollment, while there was a small but significant increase (an average increase of $6 per person per month) in individuals' out-of-pocket spending.

At a time of ongoing debate over Medicaid expansion, Dr. Cummings and colleagues believe their findings have important policy implications. "When adults with mental health disorders lose Medicaid and become uninsured, elevated out-of-pocket costs may compel [them] to forgo routine treatment," the researchers write. "Reductions in outpatient care...could lead to poor outcomes among those with mental illness."

Medicaid disruptions might become even more frequent with proposals to implement work requirements and reduce federal funding for Medicaid. Dr. Cummings and coauthors conclude:

As states consider the future of their Medicaid programs, it will be crucial to implement strategies to mitigate Medicaid disenrollment and ensure adequate receipt of mental health outpatient services for those in need of services."