Does Medicaid Cover Therapy? Tips to Find a Covered Provider

Until recently, you were only eligible for Medicaid when you had income below a certain level and were also a member of one or more of the following vulnerable groups:

• Pregnant women
• Low-income children
• Low-income adults aged 65 or older
• Low-income parents of Medicaid-eligible children
• Disabled adults receiving SSI or Social Security Disability

The 2010 Patient Protection and Affordable Care Act expanded Medicaid to anyone whose income was at or below 138% of the Federal Poverty Level regardless of their membership in any of these groups.

While the law originally made Medicaid expansion a requirement for all states, in 2012, the Supreme Court ruled that states could elect whether to expand Medicaid. This means some states retain categorical eligibility requirements for Medicaid while others do not.

Medicaid covers many mental health services, but the way Medicaid law is written means there’s a lot of variation from state to state in what specific mental health services it covers.

Only two of these benefits listed in federal regulations are specifically defined as mental health benefits. All other mental health services are covered under the most relevant general benefit category.

For example, psychiatrists’ services are covered under “physician services.” Interventions from psychologists and clinical social workers may be covered under “other practitioners’ services” or covered with other outpatient mental health services under “outpatient hospital services” and “clinic services.”

Otherwise, Medicaid covers most basic mental health services, as well as many services private insurance often doesn’t cover, including nursing home care, other long-term services, round-the-clock services, case management, psychosocial rehabilitation, supported employment, and in-home mental health care.

According to the Medicaid and CHIP Payment and Access Commission (MACPAC), every state’s Medicaid plan currently covers “some form of outpatient mental health services,” which generally includes individual and group counseling. Many states’ plans also cover family counseling.

In every state, the public mental health system, which usually—but not always—provides therapy and other low-intensity outpatient mental health services, accepts Medicaid.

You can contact a provider directly to determine whether they accept Medicaid or ask a representative at your local Social Services office for a list covered providers.

Some states administer Medicaid through a managed care system and have a list of in-network Medicaid managed care providers. These are typically clinics and providers that are part of larger mental health care agencies. You can find lists of these in-network providers on the page for your Medicaid managed care plan.

Every state has publicly-funded outpatient mental health providers, typically called community mental health centers, that accept Medicaid. Whether these agencies have outpatient clinics where therapy is available varies not only from state to state, but from county to county within each state.

Another way to use your Medicaid coverage to get therapy or other mental health services is to go to a provider that is specifically set up to accept Medicaid.

Any outpatient clinic that qualifies as a Federally Qualified Health Center (FQHC) accepts Medicaid (and also offers sliding scale fees to people without insurance). You can search for FQHCs using the U.S. Department of Health and Human Services’ online search tool.

Many people who are eligible for Medicaid don’t realize they are eligible, especially since expanded Medicaid became available under the Affordable Care Act. If you’re on a limited income, you should ask—Medicaid will link you with an impressive range of medical and mental health services.

One of the biggest differences between Medicare and Medicaid is that Medicare is a purely federal program, while Medicaid is a joint state and federal program.

Some states have higher income requirements than others. Some cover special programs that are relevant to their population that aren’t covered in other states. Some states use waiver programs to cover additional groups or services, while others use waivers to restrict services.

One of the most significant ways Medicaid varies between states is whether a given state has accepted Medicaid expansion and extended eligibility to people based on income level alone.

As a result of many states choosing not to expand Medicaid, many Americans who are younger than 65, who do not have children, and who are not legally disabled continue to be ineligible for Medicaid even when their income is 138% of the Federal Poverty Level or less.