Some Republican Senators recognize the potentially disastrous consequences for mental health and substance use disorder care contained in the American Health Care Act (AHCA). They appear to be attempting to address this concern by proposing billions in new funds.
Several Republican Senators seek to add $45 billion over 10 years to compensate for the lost support for mental health and substance use disorder treatment that would result by enacting the House-passed AHCA. Unfortunately, their proposal falls far short of the resources needed to fight this crisis. In fact, it will cost more than $183 billion over ten years to cover the lost coverage opportunities caused by the AHCA and to fight the nation’s opioid epidemic.
Where did the $45 billion come from? The $45 billion appears to be based on estimates of 2016 spending for behavioral health care made by Sherry Glied and me.
We estimated that in 2016 people in the Medicaid expansion group incurred about $4.5 billion in costs for behavioral health treatment. That represents the number of people with mental illnesses and substance use disorder that sought and received treatment for those conditions under the Medicaid expansion in 2016.
This estimate only counts a sliver of the health care needs for people with substance use disorders. What that estimate does not count is important. First, the $4.5 billion only counts behavioral health services and not all health care services. Data from several state Medicaid programs and recent analyses from the CDC show that people with an opioid use disorder incur health care costs between $11,000 and $12,000 per year.
This is because people with mental illnesses and especially substance use disorders typically have other significant health care needs like HIV-related illnesses, hepatitis C, diabetes and asthma that require treatment. So simply applying the full costs of care to the 1,286,550 people that use behavioral health services under the Medicaid expansion and who would lose that coverage raises the 2016 total to at least $14.2 billion (1,286,550 x $11,000).
Due to problems of affordability, treatment availability, stigma and denial of a problem existing, only 35 percent of people covered by Medicaid with mental illnesses and substance use disorders use behavioral services in a year. That does not mean they do not receive any health care. People with untreated opioid use disorder nonetheless incur an average of about $9,000 per year in health care expenditures.
The tragic shortfall is perhaps best illustrated by considering the urgent problem of opioid use disorders. According to the National Household Survey on Drug Use and Health, in 2015 there were roughly 1.35 million Americans with an opioid use disorder with incomes less than 200 percent of the federal poverty line. Only 25 percent of these people get treated in a year, but there are massive efforts underway to close this treatment gap. And the epidemic continues to grow. Mortality grew 15.5 percent between 2014 and 2015 and has averaged 9 percent a year since 1979.
Recent data from the Agency for Healthcare Research and Quality shows that opioid-related hospitalizations growing at 5.7 percent per year and opioid related emergency room visits growing at 8 percent per year since 2005. If we want to address this population’s healthcare needs stemming from the lost coverage opportunities caused by the AHCA with an epidemic’s costs growing at a minimum of 5.7 percent per year, it will cost $14 billion in the first year and over $23 billion in 2026 or in excess of $183 billion over 10 years.
Putting aside these spending patterns and cost, a fixed-dollar block grant is no substitute for Medicaid. Currently, Medicaid spending contracts and expands based on need as well as new treatment options. That means that funding is there for people and states when they need it the most. For example, the opioid epidemic will likely continue to morph and require different interventions of care should new synthetic drugs cause different health problems.
And people recovering from addiction may no longer qualify for the block grant funding, but need ongoing supports and other services to stay drug-free that would fall outside narrow service definitions of targeted grant programs but would have been paid for under Medicaid. In short, not only is $45 billion not enough, but grants are not a substitute for health care coverage and cannot be enough to tackle this complicated epidemic.
Richard G. Frank, Ph.D., is the Margaret T. Morris Professor of Health Economics in the Department of Health Care Policy at Harvard Medical School. From 2014 to 2016, he served as the Assistant Secretary for Planning and Evaluation at the U.S. Department of Health and Human Services.
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