The One Big Beautiful Bill Act’s Medicaid cuts will substantially worsen the nation’s behavioral health crisis, according to policy experts. Medicaid is the single largest payer of mental health and substance use services in the United States. Among the 17% of U.S. adults ages 19-64 covered by Medicaid, 35% have a mental illness and 24% have a substance use disorder. In 2020, the drug overdose rate among Medicaid beneficiaries of all ages was 54.6 per 100,000 people, more than twice the national average. The bill will reduce access to behavioral health treatment through multiple mechanisms, including work and eligibility redetermination requirements that will cause coverage loss, restrictions on Medicaid eligibility for immigrants, and limitations on provider tax revenue that states use to fund their share of Medicaid spending.
Work and redetermination requirements will prove particularly consequential. The Act requires adults to work at least 80 hours per month and mandates eligibility redetermination every 6 months, double the current standard of 12 months. While most Medicaid-covered adults are employed, paperwork barriers to repeatedly verifying employment or exempt status lead eligible adults to lose coverage. Arkansas’s 2018-2019 Medicaid work requirements resulted in significant coverage loss without increasing employment.
Expected Consequences
Over 10 million adults and children are estimated to lose Medicaid coverage by 2034. A recent analysis projects that the bill will cause 156,000 people to lose access to medication for opioid use disorder, resulting in over 1,000 excess fatal overdoses each year. For the first time in more than 20 years, overdose deaths began to meaningfully decline in 2023.
The bill will also worsen the behavioral health workforce deficit. As of 2022, only one mental health care provider was available per 350 people in the United States, with more than 152 million people living in a “mental health workforce shortage area.” Behavioral health providers, among the lowest-paid clinician specialties, are disincentivized from the field partly because Medicaid reimburses at lower rates than Medicare or commercial insurance. The Act restricts state Medicaid managed care contracts’ ability to direct plans to pay providers above Medicare levels, further reducing payments to behavioral health providers.
Evidence for Medicaid’s Effectiveness
Evidence demonstrates that Medicaid expansion increases access to behavioral health treatment. The Affordable Care Act’s Medicaid expansion was associated with increased mental illness treatment rates, fewer poor mental health days, increased use of medications for opioid use disorder, reduced opioid-related hospital use, and reduced drug overdose. Positive spillovers extended to children, including improved mental health and reduced child maltreatment when their parents gained Medicaid coverage.
This article is an AI-assisted summary. All facts and figures are drawn from the original report: https://www.milbank.org/quarterly/opinions/medicaid-cuts-will-heighten-the-us-mental-health-and-substance-use-crisis/