Does Medicaid Cover Therapy? Tips to Find a Covered Provider
Medicaid is a public insurance plan that was established in 1965 along with Medicare. Its original purpose was to expand access to healthcare for people receiving public financial assistance.
Before Medicaid, people who couldn’t afford to go to the doctor could usually only receive medical and mental health care at charitable organizations or state facilities.
Medicaid allowed many people with lower incomes to choose their providers for the first time.
Medicaid has expanded and contracted in different ways over time, but it has ultimately grown. Medicaid now covers more people than ever before, including people with disabilities, pregnant women, and people who work low-income jobs but don’t have access to insurance through their employers.
Not only does Medicaid link millions of Americans with primary medical care, it has also become the single largest payer of mental health care in the United States.
Read on to learn who’s eligible for Medicaid, how it works, and which mental health services it covers.
Who Is Eligible for Medicaid?
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While the law originally made Medicaid expansion a requirement for all states, in 2012, the Supreme Court ruled that states could elect whether to expand Medicaid.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.
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Where to Apply for Medicaid
If you think you might be eligible for Medicaid, you can apply for coverage at your local Social Services office.
Another way to learn whether you are eligible is to apply for an individual insurance plan through the federal Health Insurance Marketplace on HealthCare.gov. As part of the application process, you will be evaluated for Medicaid eligibility and allowed to apply online if you are eligible.
Does Medicaid Cover Mental Health?
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.
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The Fine Print: What Federal Law Requires Medicaid to Cover
Federal regulations require states that have Medicaid to cover certain services. Mandatory benefits under Medicaid include:
- Physician services
- Home health services
- Rural health clinic services
- Inpatient hospital services
- Outpatient hospital services
- Laboratory and x-ray services
- Authorized nurse-midwife services
- Family ...
Federal regulations require states that have Medicaid to cover certain services. Mandatory benefits under Medicaid include:
- Physician services
- Home health services
- Rural health clinic services
- Inpatient hospital services
- Outpatient hospital services
- Laboratory and x-ray services
- Authorized nurse-midwife services
- Family planning services and supplies
- Services at federally qualified health centers
- Non-emergency transportation to medical care
- Certified pediatric or family nurse practitioner services
- Nursing facility services (for people aged 21 years and over)
- Tobacco cessation counseling and pharmacotherapy for pregnant women
- Early and periodic screening, diagnostic, and treatment services for individuals under 21
Optional benefits that states can elect to cover under Medicaid include the following:
- Eyeglasses
- Clinic services
- Dental services
- Hospice services
- Prescribed drugs
- Personal care services
- Private duty nursing services
- Targeted case management services
- Other licensed practitioners’ services
- Home and community-based services
- Community-supported living arrangements
- Inpatient psychiatric services for individuals under age 21
- Other diagnostic, screening, preventive, and rehabilitative services
- Inpatient hospital and nursing facility services for people 65 or older in institutions for mental diseases
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.”
Due to its historic role in supporting community mental health programs, Medicaid doesn't cover long-term care in psychiatric hospitals.
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.
Medicaid Mental Health Providers
Because Medicaid typically pays lower rates than private insurance and Medicare, many mental health practitioners choose not to accept 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.
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Learn More About the Public Mental Health System in Your State
To see which services the public mental health system offers where you live, you can read our state-funded mental health services guide for your state. Just go to this page and select your state. Our guides answer the following questions:
- Who is eligible for public mental health services where you live?
- What number can you call to get an appointment or find out more?
- Which programs provide publicly-funded mental health services?
- Where are they located?
- What are their phone numbers?
- Where can you find more information about them?
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.
How Does Medicaid Vary from State to State?
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.
Whether a person is eligible for Medicaid varies from state to state. Covered services also vary between states.
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.
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Which States Have Expanded Medicaid?
As of April 2022, the following states have not accepted Medicaid expansion:
- Alabama
- Florida
- Georgia
- Kansas
- Mississippi
- North Carolina
- South Carolina
- South Dakota Tennessee...
As of April 2022, the following states have not accepted Medicaid expansion:
- Alabama
- Florida
- Georgia
- Kansas
- Mississippi
- North Carolina
- South Carolina
- South Dakota
- Tennessee
- Texas
- Wisconsin
- Wyoming
Several states have accepted limited Medicaid expansion but have sought to impose additional restrictions on Medicaid eligibility by using a 1115 waiver. These states include:
- Arizona
- Arkansas
- Indiana
- Iowa
- Michigan
- Montana
- New Hampshire
This means that as of 2022, only 38 states (and the District of Columbia) have expanded Medicaid and only 31 states (and DC) have implemented full Medicaid expansion without imposing or seeking to impose any additional eligibility requirements.
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.
Conclusion
We encourage you to explore your options. If you can’t find a local private practice provider who accepts Medicaid, consider searching for a provider who offers free or low-cost counseling on OpenCounseling.
You may be able to get affordable mental health care from the public mental health system, which generally accepts Medicaid, from a community counseling agency, or from a therapist who offers sliding-scale rates.
You can also consider signing up for online counseling with BetterHelp (a sponsor). With the income-based discounts they offer, you may be able to get therapy from a BetterHelp therapist that fits your budget.
Whichever option seems right for you, please reach out—the care you need may be only a call or click away.
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Stephanie Hairston
Stephanie Hairston is a freelance mental health writer who spent several years in the field of adult mental health before transitioning to professional writing and editing. As a clinical social worker, she provided group and individual therapy, crisis intervention services, and psychological assessments.