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Healthcare Reform and You


Part Two
The Waterfall Effect:

The Impact of the New Medicaid Expansion 
 on Access to Health Insurance 
and Quality Care 
for People with Mental Health Conditions 

Second in a three-part series on the implications of the Affordable Care Act for clinical mental health counselors


By Joel E. Miller
AMHCA Executive Director and CEO

“Of all the forms
of inequality, injustice
in health care
is the most shocking and inhumane.”

— Dr. Martin Luther King, Jr.

The Patient Protection and Affordable Care Act (ACA), and specifically the new Medicaid Expansion program, will provide a major opportunity for clinical mental health counselors (CMHCs) to serve as primary mental healthcare providers. Health plans will need CMHCs in their provider networks to address the needs of newly insured people, with an emphasis on prevention and wellness, as well as providing necessary services and treatments.

It’s important for CMHCs and all mental health practitioners to be up to speed on healthcare reform, since many of their clients will rely on their mental health counselors for guidance on what healthcare reform means to them. 

The main reason the ACA was enacted in 2010 to address the magnitude of the uninsured problem in the United States. According to the U.S. Census Bureau, the number of uninsured Americans—those with no public or private health insurance through Medicare, Medicaid, CHIP, Blue Cross/Blue Shield, commercial insurers, etc.—has been hovering around 50 million people over the last few years. 

The decision of the U.S Supreme Court in June 2012 to allow the states to reject the ACA’s Medicaid Expansion program has created a substantial gap in the comprehensive-coverage design of the ACA, which addresses a major portion of the uninsured issue. States such as Florida and Texas, where state officials have rejected participation in the new ACA Medicaid Expansion program, have large uninsured populations.

Since July 2012, state officials have been deciding whether to implement the Medicaid Expansion. For many states, fiscal issues are critically important to this decision. Years of rising Medicaid costs have left state officials understandably concerned about the financial risks of any increase to Medicaid eligibility. But this particular expansion has unusual features. Some factors will raise state costs—such as initial internal Medicaid operational actions—but several factors will significantly reduce individual state Medicaid costs and budget deficits, making the expansion a good buy and investment for individual states.


Over the next several months, state legislatures and governors will have the opportunity to reconsider their positions on whether to participate in the new Medicaid Expansion program, which will likely be based on budgetary considerations alone. The adjacent map (Figure 1) shows which states have decided to opt in for Medicaid Expansion, which are leaning toward expansion, which are not, and which are currently undecided. 

(The the Center on Budget and Policy Priorities has createdan interactive version of the adjacent map, along with resources for encouraging states to opt into Medicaid Expansion.)

However, the moral and human face to this issue has been lost in the shuffle due to those very state budget and financial problems that have lingered since the Great Recession. 

The lack of healthcare for the poor is a national problem that the ACA is trying to fix and one that only the federal government can fix. States cannot solve national problems. With health insurance exchanges open to all legal residents, and Medicare providing coverage for elderly adults, the addition of all lower-income, non-elderly adults to Medicaid by the ACA would give virtually a major cross-section of the population access to affordable health insurance. 

States that do not participate in the new Medicaid Expansion will deny their impoverished citizens the coverage that the federal government is willing to finance, and these states will also leave many uninsured citizens who are above the tax-filing threshold subject to the new tax on the uninsured. Their impoverished legal residents will continue to rely on the charity of safety-net providers, which is the very problem that the ACA was designed to solve. 


Eight key cascading events (see Figure 2, above)—a waterfall effect—are associated with the new Medicaid Expansion program that are critically important to assuring that uninsured people with men-tal health conditions gain access to health coverage, and the ultimate goal: high-quality care. 

Each of these eight markers are discussed in this article:

  1. Access to Health Insurance Coverage
  2. Ability to Enroll in Health Insurance Plans
  3. Access to Covered Services, Benefits, and Providers
  4. Emphasis on Prevention and Health Promotion Benefits
  5. Choice of Health Plans and Providers
  6. Deploying the Workforce and Increasing Capacity
  7. Integrating Mental Illness and Substance Abuse Treatments and Primary Care
  8. Improving the Delivery of High-Quality Mental Health Services


1. Access to Health Insurance Coverage

Lack of insurance is associated with inadequate care and poorer health outcomes. 

About 20 percent of non-elderly Americans are uninsured. 

Health insurance coverage is the “pass-key” to high-quality healthcare in America. Despite considerable, well-intentioned efforts to improve access to health insurance coverage by individual states, nearly one in five Americans under age 65 lacks the first basic step in obtaining high quality care—namely, health insurance coverage that is stable and continuous. 

According to government estimates, nearly half (47 percent) of the nation’s uninsured, 22.3 million uninsured people, could qualify for Medicaid under the Affordable Care Act based on their incomes. 

State decisions regarding whether to expand Medicaid under the ACA will directly affect the 15.1 million uninsured with incomes below 138 percent of the federal poverty level (FPL) who are not currently eligible for Medicaid. Under the ACA”s new Medicaid Expansion program, these 15.1 million uninsured would be eligible for coverage.

Impact of the Medicaid Expansion on 
Coverage for Individuals with Mental Health Conditions 

The improvements in behavioral healthcare that are anticipated under the Medicaid Expansion have not been a prominent part of the discussions and debates about healthcare reform over the last 20 years. Probably because spending on behavioral health is under 7 percent of all health spending, mental and substance use disorders have not been regarded as important as physical health conditions.
This view is unfortunate for several reasons: 


  • Behavioral health conditions are a source of profound suffering for the people who have them and often for their family members as well.
  • They are the leading cause of long-term disability.
  • People with co-occurring, chronic physical disorders such as heart disease and mental disorders—and especially depression—have a substantially higher risk of disability and premature death.
  • Care for people with co-occurring physical and behavioral disorders is considerably more expensive than care for people without co-occurring disorders, driving up the overall cost of healthcare in the United States.
  • Disabled older adults with co-occurring disorders are more likely to be placed in nursing homes than cared for in community settings, driving up the cost of long-term care.
  • People with mental illness often do not get the physical healthcare that they need for obesity, high blood pressure, diabetes, and heart conditions for which they are at high risk, and which contribute to low life expectancy for this population.
  • Improved overall health of Americans, such as reduced obesity, depends on changes in lifestyle and behavior, which rarely happen unless motivation and other psychological issues are addressed.

Approximately 26 percent of adults experience a diagnosable behavioral health disorder each year, and 6 percent—or 1 in 17 adults—have a serious mental illness, such as schizophrenia. 

Mental illness and substance use disorders affect an individual’s ability to work or care for themselves. As a result, large numbers of these individuals are unemployed or underemployed, and they and their families do not have the benefit of employer-sponsored health plans. And many are single adults who do not meet the disability requirements or low-income limits  needed to qualify under the current Medicaid program, which remains in place and will continue alongside those enrolled in the new Medicaid Expansion effort. 

Without access to treatment, people with mental illnesses and substance use disorders experience crises more frequently and must rely on expensive emergency-room care and inpatient psychiatric care. Moreover, individuals with untreated mental illness are disproportionately at risk for engagement with the criminal justice system, and are four to six times more likely to be incarcerated for crimes related to mental illness. 

For people with mental illness and substance use disorders, the ACA’s Medicaid Expansion initiative will have the most significant impact on increasing expanding health insurance coverage and on the service delivery system. 

Currently, many people with mental illness and substance use disorder diagnoses are excluded from obtaining coverage due to their pre-existing conditions, or if they can obtain insurance, the premiums are so exorbitant that coverage remains effectively out of reach. But under the ACA, pre-existing conditions are covered, and people who have been ill cannot be charged higher rates.

These are just some of the important expanded coverage provisions provided by the ACA (see the October Advocate for Part 1 of the healthcare series, which includes information on its many important benefits). 

The ACA’s health insurance coverage expansions will greatly increase the number of individuals eligible for the Medicaid benefits.

But only if your state opts in to the new Medicaid Expansion.
That means all adults under age 65 whose income is less than 138 percent of the federal poverty level qualify under the Expansion program. Currently, in Virginia, that level is 80 percent for those eligible adults with disabilities, and 30 percent for adults with dependent children.

In many states, including Virginia, childless adults have been excluded from the current program but will be eligible under the new Medicaid Expansion program. Many of these adults have a behavioral health diagnosis, especially those with substance use disorders who currently do not qualify for Social Security Disability Insurance (“SSDI”) or Supplemental Security Income (“SSI”). They could greatly benefit from the ACA Medicaid Expansion program.

But only if your state opts in. 
Under the old Medicaid rules, only certain categories of poor people—such as pregnant women, parents with dependent children, the disabled, and the elderly—could qualify for Medicaid. But under the Medicaid Expansion, anyone can qualify for Medicaid as long as their annual income is less than 138 percent of the Federal Poverty Level. 

Two groups of people will be left out if a state does not choose to expand its Medicaid program: 


  1. Those individuals who make less than 100 percent of the federal poverty level but do not fit into one of the traditional Medicaid categories, including people who are single, childless, or do not live with their children; and
  2. Lower-income people who qualify for premium assistance under the ACA, but nevertheless cannot find insurance that they can afford to purchase or use. The majority of people in both these categories are lower-wage workers.

The U.S. Substance Abuse and Mental Health Services Administration (SAMHSA) has estimated 

that about 13.5 million uninsured people who have behavioral health conditions will be eligible through a combination of the ACA’s Medicaid Expansion (6.6 million people) (see Figure 3, adjacent) and the State Health Insurance Exchanges (6.8 million people) beginning in 2014 through 2019 (see Figure 4, below right). 

About one in six currently uninsured adults with incomes below 138 percent of the FPL has a serious mental illness such as major depression. Many other individuals have less serious behavioral health disorders such as mild depression or anxiety disorders, but these conditions can be debilitating and affect daily living as well. 

Due to severe state cutbacks over the last four years, individuals with a mental illness who are uninsured receive basic, state-funded, public behavioral healthcare services of limited duration. Often these services and care are crisis-oriented. ACA’s Medicaid Expansion will replace state and local dollars that fund behavioral health services with new federal Medicaid monies.
States can recoup significant budget gains through the Medic aid Expansion because the federal government will pay nearly 100 percent of all of the costs for the newly eligible group over the initial 10 years of the expansion. Despite warnings from state officials that the federal government will renege on its promise to pay nearly 100 percent of the new Medicaid costs, the funds for paying the ACA coverage expansions have been specifically set aside through various revenue sources employed by the ACA law. For example, the hospital industry agreed to incur billions of dollars in reimbursement cuts that are being used to pay for the expansion, knowing it would recoup those costs when uninsured patients begin receiving health coverage under the ACA. Other revenue sources such as taxes on insurers are also being used to pay for the health insurance expansion. 

The Medicaid Expansion will substantially stop the deterioration in health access that non-elderly adults have been experiencing over the last decade, especially those with behavioral health conditions. Several reports show that over the last 10 to 12 years, emergency room visits have increased while routine office visits have declined. Non-elderly adults were 66 percent more likely to report having unmet medical needs in 2010 compared to 2000. 

In addition, there are costs associated with not providing services. Research demonstrates that limiting Medicaid drug reimbursement benefits for individuals with schizophrenia increased the use of emergency mental health services and the rate of partial hospitalizations and psychiatric hospital admissions, which results in an increased cost to states.

Limiting health access also increases pain and suffering for lower-income individuals with mental illness.

Here’s one snapshot of the potential impact of the expansion: Of the 425,000 individuals projected to become newly eligible for new Medicaid coverage in Virginia, 34 percent of these residents will need mental health and substance abuse services. And the health status benefits afforded by expanding Medicaid coverage are well documented, showing such increases in coverage reduce mortality rates among new Medicaid enrollees. 

But only if Virginia opts in!
Unfortunately, Virginia remains one of the 25 states that has decided not to opt into the Medicaid Expansion program. 



2. Ability to Enroll in Health Insurance Plans

Targeted outreach and enrollment will be necessary to reach newly eligible adults, especially individuals with behavioral health disorders. Under the ACA, states are responsible for determining eligibility and conducting outreach and enrollment to populations potentially eligible for Medicaid. 

Most of the newly eligible people with mental illness will most likely be reached through their current mental health provider when they access services, rather than through general outreach initiatives. Since many providers—such as CMHCs—operate as direct-service providers, providers need to be knowledgeable about the ACA so that they can be a resource of information for their clients about the shift from a service delivery to an insurance model. 

People who are eligible for public programs frequently do not participate in them, and Medicaid is no exception. There are a variety of reasons that eligible individuals might not sign up for coverage: They might not be aware of their eligibility, they might be averse to government programs, they might not feel they need assistance, or they might not know where or how to apply 

Get Involved! Engage!

These next few months are critical for positioning yourself so that you can “be at the table” when healthcare reform is served up.

If you have any questions about healthcare reform or how to
take any of the steps described
here, please email me directly at,or call
the AMHCA office, toll free, and
leave a message for me at 800/326–2642 (703/548–6002).

— Joel Miller, AMHCA
Executive Director & CEO

The recent experience of the federal-state Children’s Health Insurance Program (CHIP) provides a prime example of what some analysts call the “woodwork effect.” Because of extensive outreach and enrollment activities triggered by incentives in the Children’s Health Insurance Program Reauthorization Act (CHIPRA) of 2009, many parents showed up to enroll their children in CHIP unaware that they were actually eligible for the Medicaid program, which has lower income thresholds than CHIP. 

The program’s efforts worked to insure 42 million children in Fiscal Year 2010—7.7 million enrolled in CHIP and more than four times that many—34.4 million children—enrolled in the Medicaid program. 


3. Access to Covered Services, Benefits, and Providers

Being covered does not guarantee access to all services and all caregivers and institutional providers. Certain services may not be covered; specific doctors and hospitals may not be included among those participating in a plan or contracting with it; and a caregiver may be unwilling to accept reimbursement. All of these factors represent a potential interruption in receiving high-quality care. Interruptions in care transitions can have devastating consequences for people with a mental illness. 

It is important to consider the unique needs of people with mild, moderate, and severe behavioral health disorders in making decisions about the scope of benefits available under Medicaid Expansions. 

Under the ACA, states have the option to provide newly eligible Medicaid beneficiaries with a “benchmark” benefits package—which is typically more limited than traditional Medicaid benefits—rather than the full Medicaid benefit package. Research shows a high rate of mental health disorders among the newly eligible group, and many newly eligible people with mental health service needs will have mild or moderate disorders. 

Experts believe that the full, traditional Medicaid benefits package is more appropriate for those with serious mental illnesses. The significant difference in service needs between those with mild/moderate and serious mental illness highlights the key challenges that states face in trying to develop health insurance benefit packages under the ACA. 

All newly eligible individuals should have coverage for all of the services covered under the “State Medicaid Plan.” If the state has determined it will not adopt that policy, then at a minimum, individuals with serious mental illness should have full state-plan coverage. This can be done because states may, under the law, adopt different coverage policies for different groups. 

In addition, the following services, all of which states already cover under Medicaid for other populations, could be required as part of a wraparound benefit. 

  • Skills training to address functional impairments resulting from a serious mental disorder and furnished in any appropriate setting, including in the home or on the job (this should include social, daily living, communication, personal care, and other skills);
  • Integrated treatment for individuals with co-occurring mental illness and substance use disorders, such as Integrated Dual Disorder Treatment (an evidence-based practice);?
  • Intensive in-home services for children;
  • Crisis residential services for adults;
  • Therapeutic foster care for children; and
  • Outreach, engagement, and mobile crisis services for people who are homeless.


4. Emphasis on Prevention and Health Promotion Benefits

The Affordable Care Act, through the new Medicaid Expansion effort, emphasizes the importance and value of prevention, and calls for coverage of various prevention practices. The ACA also authorized the creation of the National Prevention, Health Promotion, and Public Health Council, a body charged with providing coordination and leadership at the federal level among executive departments and agencies with respect to prevention, wellness, and health promotion. 

This group crafted a National Prevention Strategy that was released in June 2011. The promotion of mental and emotional well-being and the prevention of substance abuse (including drugs, alcohol, and tobacco) are two of the seven priority areas identified within that whole-health framework. 

Additionally, President Obama and several members of Congress have proposed budget increases that would collectively provide a reliable, ongoing source of funding for states, territories, and tribes to implement practices designed to enhance well-being and prevent substance use and mental health problems. 

Given the increased focus on prevention, in conjunction with a renewed emphasis on integrated care, clinical mental health counselors are in a strong position to advance the prevention of mental illnesses and the promotion of emotional and mental well-being. In line with the ACA, this could be accomplished in integrated-care settings, as well as in individual practices where CMHCs have been in the forefront over the last 30 years promoting mental health and emotional well-being. 

As a further step toward advocating for primary prevention and wellness, CMHCs need to be part of health teams and patient-centered medical homes in these settings. CMHCs and primary-care providers could collaborate on culturally and developmentally sensitive methods of screening for risk factors and adverse health behaviors, such as substance abuse, domestic violence, and firearm ownership. Using their developmental perspectives, these partnerships would position CMHCs to provide evidence-based primary mental healthcare-based interventions focused on enhancing strengths and protective factors among young people.


5. Choice of Health Plans and Providers

With millions of Americans enrolling in health insurance pools between 2014 and 2019, a strong navigation system will be needed to inform people about their new insurance options and help them enroll. 

A Navigator function has been created to help people who will obtain health coverage through their state’s insurance pools—such as small businesses, the self-employed, or people who do not have access to insurance through their employers. 

The Navigator’s job is to provide individuals and families with the information necessary to determine which health insurance option best fits their needs and then help them enroll in their plan of choice. 

All states will need to fund the Navigator process. 


6. Deploying the Workforce and Increasing Capacity

Many experts believe that the current system will not be able to adequately serve the newly eligible population with mental health needs. A major area of concern is having enough providers to ensure access to behavioral health services. Effectively serving newly eligible adults with mental health needs calls for building capacity in the current mental health system. 

The ACA coverage expansions represent a major opportunity for clinical mental health counselors to address the needs of newly insured people with mental health conditions through their individual practices and by participating in new integrated-care delivery systems that will dramatically increase in the near term. Health plans and other payers are emphasizing the prevention and health programs that play to the key strengths of CMHCs. 

Effective workforce development strategies must address the following challenges:

  • Recruitment and retention;
  • Accessibility, relevance, and effectiveness of training;
  • Staff competency in integrated care, evidence-based practices, and recovery-oriented approaches;
  • Attitudes and skills in prevention and treatment of individuals with mental and substance use conditions;
  • Leadership development; and
  • Workforce roles for those in recovery and their family members.


7. Integrating Mental Illness and Substance Abuse Treatments With Primary Care

Persons in the U.S. public mental health system with serious mental illness are dying 25 years earlier than the general population. Individuals who have a dual diagnosis of mental illness and substance abuse, on average, die nearly 32 years earlier than their fellow citizens outside of the public mental health system. Even individuals in the general population  who self-identify as having a mental illness die nearly nine years sooner than those without a mental health disorder. The leading solution to address this problem is to improve access to and integrate behavioral healthcare and primary healthcare services. That is why it is so important for people with behavioral health conditions to have consistent and stable coverage and the ability to access primary care physicians and primary mental health providers such as CMHCs.

The problem of substantially shortened lifespans for people with serious mental illnesses (e.g., bipolar disorder) is a major public health and health disparity issue. This issue was initially spotlighted 10 years ago. Due to the magnitude and degree to which premature death is the result of preventable medical conditions, this problem has become a major public health crisis, with consequences for the entire healthcare delivery and financing system.

Next Steps for CMHCs

  • If you live in a state that has not opted into the new Medicaid Expansion program, contact your governor’s office and your state senator and representative in your General Assembly to seek their support for opting into the Medicaid Expansion program. Emphasize the importance of covering people with behavioral health conditions.
  • Work closely with other stakeholders to ensure your state conducts strong outreach, education, and enrollment activities—targeted to the public, eligible employers, behavioral health consumers, and service providers—to ensure sufficient access to coverage and benefits.
  • Ensure that governing boards and other advisory bodies tasked with developing and administering the coverage expansions (Medicaid and State Health Insurance Exchanges/Marketplaces) include individuals with expertise regarding the unique needs of individuals with behavioral health disorders (such as clinical mental health counselors).

The epidemic of obesity and diabetes in the general population increases the risk of multiple medical conditions and cardiovascular disease. There is also significant and growing morbidity and mortality associated with mental illnesses. 

In essence, we are witnessing epidemics within epidemics.
Specifically, persons with schizophrenia have over three times the mortality rate for respiratory diseases and diabetes than the general population. Major depression is strongly linked with other chronic conditions like diabetes and asthma, and individuals with these conditions make twice as many visits to primary care doctors as the general population. From a system-wide perspective, this problem is costing the nation billions of dollars. People with major depression who have diabetes have four times the health expenditures as the general population.

 The primary reason there is a significant gap in mortality for people with serious mental illness compared to the rest of the population is the difficulty that individuals with behavioral health conditions have in receiving care in a coordinated and comprehensive manner. The behavioral healthcare system—much like our overall healthcare system—is riddled with problems of fragmentation and spotty quality, including preventable errors. 

Mental illness may be a health risk determinate for premature mortality due to three factors: 


  1. Patient factors, such as trauma, victimization, home-lessness, unemployment, incarceration, and drug use.
  2. Provider factors, such as comfort level and attitude of healthcare providers.
  3. Social factors, such as stigma and discrimination.

Organizing community treatment of mental illness may be complicated by the affected population’s use and abuse of drugs and alcohol. The Medicaid Expansion enables a transformation in the management of substance abuse, whether occurring along with a serious mental illness or as a condition in its own right. The ACA and Medicaid Expansion does this through its “whole person” perspective by focusing on the integration and coordination of services, as well as by encouraging care coordination through health and medical homes, and collaborative teams and services. 

Substance abuse treatment is a mandated service under the ACA, which includes a provision for new workforce development and training. Substance abuse evaluation and treatment must be incorporated into the central process of monitoring and managing medications and educating clients about their medication and condition. 


8. Improving the Delivery of High-Quality Mental Health Services

There are five reasons why the Medicaid Expansion makes reinventing and improving behavioral health more likely now—if states pursue the Medicaid Expansion initiative. 

  1. The Medicaid Expansion program enables states and federal agencies to test and evaluate improved financial and organizational tools in order to address the fragmentation of services that lead to poor quality and high cost.
  2. Many provisions, such as health homes, are directed toward chronic disease co-morbidities. These provisions make it possible for mental health providers to be more responsive to clients who not only have a mental illnesses but who also have other serious chronic diseases or disease risks.
  3. Provisions allow providers to better coordinate Medicaid behavioral services with social service and housing programs that seek to prevent and manage home-lessness among people with mental illnesses.
  4. The act encourages the use of preventive services and substance abuse education, evaluation, and treatment, and it allows providers treating people with mental ill-nesses to pay more attention to substance abuse problems and receive payments.
  5. By extending the concepts of treatment and related supportive care to such entities as health homes, Medicaid provisions provide new pathways for incor-porating evidence-based treatments, such as supported employment, that are commonly neglected.


Despite the problems in the roll-out of the federal Health Insurance Exchange, healthcare reform is moving forward. The enrollment issues will be fixed.

The ACA Medicaid Expansion will significantly increase Medicaid coverage for adults who are currently uninsured, especially for people with mental illness and substance use disorders. And it will improve the health of people with behavioral health conditions. 

The new Medicaid Expansion effort has the potential to afford people with behavioral health conditions greatly expanded access to mental health and substance use treatment in an integrated and community-based setting, with a person-centered treatment focus.

Medicaid Expansion is good policy for lower-income people with mental health conditions. The health—and lives—of these individuals are on the line.

Don’t miss Part Three—“New Care Delivery and Payment Models
Under Healthcare Reform: Implications and Opportunities
for Mental Health Counselors”—in the December/January Advocate.