Do You Trust Your State? GOP Health Bill Drops Medicaid Addiction Treatment Mandate

March 9, 2017; Washington Post

The American Health Care Act (AHCA), proposed by House Republicans and endorsed by the Trump administration, includes key provisions that eliminate federal mandates for what services must be covered under Medicaid. Among these changes is one that could affect an estimated 1.3 million people in need of addiction treatment in the 31 states and the District of Columbia that chose to implement Medicaid expansion under the Affordable Care Act (ACA).

There is concern about ending the coverage mandate at the same time a national opioid epidemic is spreading across the country. The Washington Post reports:

A record number of people—33,000—died of opiate overdoses in 2015, according to the Centers for Disease Control and Prevention. Opioids now kill more people than car accidents, and in 2015 the number of heroin deaths nationwide surpassed the number of deaths from gun-related homicides. Authorities are also grappling with an influx of powerful synthetic narcotics responsible for a sharp increase in overdoses and deaths over the past year.

Opioid overdose death rates are highest in Kentucky and West Virginia, both states that expanded Medicaid under the ACA. Medicaid currently pays for about 44 percent of medication-assisted addiction treatment for covered individuals in those states.

If the AHCA were to become law in its present form, the federal mandate under Medicaid expansion would disappear. However, whether addiction treatment coverage would also disappear in those states is a more difficult question to answer, owing to economics, politics, and existing state laws.

Federal Medicaid funding would shift from a percentage of covered expenses (reimbursements for services provided and paid for) to a percentage of covered individuals (a fixed dollar amount per eligible Medicaid recipient). The bill’s proponents believe that the change is a win-win; the federal government will save money and states will have more latitude to implement Medicaid coverage based on state-identified needs.

Critics note that a person’s Medicaid eligibility and enrollment varies from month to month, especially for nondisabled enrollees younger than retirement age. Addiction is a “chronic relapse disease,” meaning that someone receiving treatment under Medicaid expansion might be successful in returning to work and no longer qualify for addiction treatment services under Medicaid expansion. If they were to subsequently relapse into addiction, under the proposed AHCA they would not be able to requalify for the same benefits.

According to the nonpartisan National Council of State Legislatures (NCSL), all states have at least some form of mental health parity mandate or regulation. The ParityTrack website provides additional state-by-state information on the details of legislation, regulation, and litigation related to mental health insurance coverage parity. Each state’s approach and extent of parity is different, making it all but impossible to know what would happen in the absence of federal mandates.

Further complicating the ability to predict is the very freedom guaranteed to state Medicaid administration under the AHCA. Would states elect to continue addiction treatment coverage under the same terms as before? Would state-level mental health parity laws apply to Medicaid plans? Could state governments afford to maintain coverage if Medicaid funding is reduced and other treatment priorities—and other providers—are demanding support?

Advocates for addiction treatment would be wise to watch events at both the federal and state levels. Although it’s possible that the AHCA will be defeated or amended, it’s likely that President Trump and HHS Secretary Tom Price, with or without Congressional support, will direct changes in federal Medicaid regulations in such a way as to make state-level mental health parity laws and state Medicaid policies crucial to continued coverage for addiction services.—Michael Wyland