6 Surprising Facts About Medicaid’s Therapy and Mental Health Coverage
Medicaid is a great public healthcare plan that has helped millions of people get the care they need since 1965.
Since 2010, it’s been helping even more.
The 2010 Affordable Care Act expanded Medicaid, which had previously been reserved for people with disabilities and other vulnerable groups, by allowing people to qualify based on income alone. Even though many states chose not to participate in the Medicaid expansion, the policy change still significantly extended the already large insurance program’s nationwide coverage.
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For more information about Medicaid, including a full overview of Medicaid’s mental health coverage, and links to where you can search online for mental health providers who accept Medicaid in your state, you can read our article “Medicaid Mental Health Benefits Explained.”
Unfortunately, as good as it is, Medicaid can be confusing.
For one thing, you might not realize you qualify. You also might not realize just how much it covers.
If you qualify, it’s worth applying. It can connect you with primary care, integrated mental health care, therapy, and a wide range of specialty medical and mental health services.
Read on to learn six surprising facts about how Medicaid works, what it covers, and who it’s for.
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- 1. Medicaid is the single largest payer of mental health care in the United States.
- 2. For over 50 years, Medicaid hasn't covered long-term inpatient care in psychiatric hospitals.
- 3. Medicaid covers mental health services that most private insurance policies don't cover.
- 4. Many essential mental health services and safety net programs rely on Medicaid for most or all of their funding.
- 5. Medicaid helps people who need more intensive medical and mental health services.
- 6. Medicaid coverage and eligibility requirements vary widely from state to state.
Medicaid is the single largest payer of mental health care in the United States.
Medicaid is an essential link to mental health care for millions of Americans. It’s also a primary source of funding for the public mental health system, community clinics, and hospital systems where you can get affordable mental health care.
It accounts for 25 percent of spending on mental health services in America every year, making it the largest single payer of mental health care in the country.
For over 50 years, Medicaid hasn't covered long-term inpatient care in psychiatric hospitals.
Medicaid was founded in 1965, when the United States government was encouraging states to establish community mental health programs as alternatives to hospitalization.
Due to its historic mission to fund community mental health care, Medicaid excluded coverage for long-term inpatient mental health care in psychiatric hospitals. It still doesn’t cover it, though it covers care received in the psychiatric unit of a general hospital.
Many professionals and advocacy groups are pushing for Medicaid to change this policy, and changes are already underway. Medicaid has updated its coverage to include short-term hospital stays and now allows states to apply for waivers to cover psychiatric hospital stays of up to 30 days for the treatment of mental health and substance use disorders.
Medicaid covers mental health services that most private insurance policies don't cover.
Due to growing public awareness of the importance of mental health care and laws like the 2008 Mental Health Parity and Addiction Equity Act (Parity Act), private insurance plans are covering more mental health services than ever before.
However, it’s still rare for private insurance plans to cover the full range of intensive services that many Medicaid plans cover, such as nursing home and other long-term care, round-the-clock services, case management, and in-home mental health care.
In fact, many older adults who need nursing home care or other intensive services often elect to “spend down” assets so they can qualify for Medicaid coverage for these specialized and otherwise expensive services.
Most Medicaid plans also cover basic mental health services like therapy, psychiatrist visits, and clinic care.
Many essential mental health services and safety net programs rely on Medicaid for most or all of their funding.
Community mental health programs are a safety net that can help when mental health issues put you at risk of harm. And they accept Medicaid.
If you have a serious mental health condition, Medicaid can connect you with essential clinical and social support in your community. Services that Medicaid covers at community mental health centers can keep you in your home and prevent you from becoming isolated when your symptoms get worse.
If you have a mild or moderate mental health condition, Medicaid can help you, too. Public mental health programs like community mental health centers also increase access to therapy, as many private practice providers don’t accept Medicaid, while publicly-funded mental health agencies do.
In some states, Medicaid pays for over 60 percent of the services rendered by these essential public programs.
Medicaid helps people who need more intensive medical and mental health services.
People who have Medicaid have higher rates of mental health conditions and use mental health services at a higher rate than people who have other types of insurance. They also have high rates of comorbid medical disorders.
The following statistics are all provided by the Medicaid and CHIP Payment and Access Commission (MACPAC). According to MACPAC:
- About 10 percent of people on Medicaid have serious mental illness, relative to 3 percent of people with private insurance and 5 percent of people with no insurance.
- About 24 percent of people on Medicaid get mental health care each year, relative to 14 percent of people with private insurance and 10 percent of people with no insurance.
- About 44 percent of people on Medicaid have fair or poor health status, compared to 13 percent of people with private insurance and 24 percent of people without insurance.
According to the Kaiser Family Foundation, about 21 percent of adults with mental health conditions have Medicaid, compared to 14 percent of the general population.
There are many reasons you’re more likely to have significant medical and mental health needs if you qualify for Medicaid. One is income. If you’ve suffered from poverty or struggled to make it on a limited income, you’re more likely to have experienced trauma, stress, anxiety, or depression, all of which can cause or worsen medical conditions as well.
Medicaid coverage and eligibility requirements vary widely from state to state.
Medicaid is a joint federal and state program that allows states to have some flexibility in what and who they cover. Some states have stricter eligibility requirements than others, especially the 12 states that have elected not to accept Medicaid expansion as of June 2023.
While federal statutes require state Medicaid programs to cover essential benefits like nursing facility care and physician visits, other services, like clinic care and psychosocial rehabilitation, are optional. So, some mental health services are covered by Medicaid in some states but not in others.
According to MACPAC, all 50 state Medicaid programs cover “some form of outpatient mental health services,” which usually includes individual and group therapy. Most also cover family therapy.
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 look into it—Medicaid will link you with an impressive range of medical and mental health services.
You may be able to get therapy and other mental health care from providers that accept Medicaid including the public mental health system, a community counseling agency, or a federally qualified health center (FQHC).
You can also look online. An increasing number of therapists are offering online sessions, including therapists who accept Medicaid.
If you find out you’re not eligible, consider signing up for affordable online therapy with BetterHelp (a sponsor) or using OpenCounseling’s search tools to find free or low-cost counseling near where you live. You may be able to find a local therapist who offers affordable sliding-scale rates.
Whichever option seems right, please reach out—the care you need may be only a call or click away.
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.