Health Reform Likely to Increase Demand on Mental Health System

Key Points

• • More than 371,000 (21.6 percent) Kansas adults reported experiencing mental illness in the last year. Less than half (47.6 percent) of them reported receiving treatment.
  • The Kansas mental health system could expect an addition of up to 7,700 new patients, as Kansans who were previously uninsured gain access to mental health coverage through the Affordable Care Act(ACA).
  • All counties in Kansas, except the five most populous, have a shortage of mental health providers according to the federal government.

Introduction

Mental health includes a person’s emotional, psychological and social well-being. It affects how someone thinks, feels and acts, and may determine how they handle stress, relate to others and make choices.

Many people experience mental health problems, ranging from mild to severe. The most serious types of mental health problems can include schizophrenia, bipolar disorder or severe depression.  A “serious mental illness” is severe enough to cause someone difficulty functioning or performing the activities of daily life.

This brief provides information about how many Kansans experience mental illness, how many receive treatment, and how federal and state policies may affect the mental health system in Kansas.

Kansans with Mental Illness

A survey administered in 2010 and 2011 by the federal Substance Abuse and Mental Health Services Administration (SAMHSA) found that more than 371,000 (21.6 percent) Kansas adults age 18 to 64 reported experiencing some type of mental illness (based on diagnostic criteria) in the last year. It also found that 5.6 percent of Kansas adults were diagnosed with a serious mental illness which resulted in significant impairment. The Kansas rate for diagnosis of mental illness has remained fairly steady over the past five years and is similar to national rates.

The ACA and Mental Health Coverage

Provisions within the Affordable Care Act (ACA) may result in an increase in insurance coverage, particularly for people with mental illness. These individuals will no longer be denied coverage due to pre-existing mental health conditions, nor can they be charged higher rates for coverage. Existing federal and Kansas mental health parity laws and new federal requirements within the ACA have enhanced the coverage of mental health services in private insurance plans in recent years, requiring that coverage be equivalent to the coverage provided for physical health services. In addition, the ACA created marketplaces for individuals to purchase private insurance using federal tax credits if they qualify.

Estimates from SAMHSA indicate that increasing insurance coverage through the ACA will increase utilization of mental health services. About 186,000 uninsured Kansans with incomes between 100 percent and 399 percent of the federal poverty level (FPL) are likely eligible for tax credits to purchase private insurance through the federal marketplace. In 2011, 16.5 percent of these uninsured Kansans who are likely eligible for tax credits utilized some type of mental health service, including medication. SAMHSA estimates that utilization of mental health services may increase by as much as 25 percent when this group gains insurance coverage. If everyone who was uninsured and eligible for tax credits through the marketplace gained insurance, the mental health system could realize an additional 7,700 patients.

States have the option under the ACA to expand Medicaid eligibility to adults up to 138 percent of FPL, which is about $32,900 annual income for a family of four. The state of Kansas has decided not to expand Medicaid. The utilization rate for uninsured Kansas adults with incomes at 138 percent of FPL or less was 10.5 percent, and SAMHSA estimates that this utilization rate would increase to 14 percent if Medicaid was expanded. Even without expansion, Kansas will likely see an increase in enrollment and mental health service utilization as some adults currently eligible for, but not enrolled in, Medicaid decide to enroll due to the individual mandate of the ACA and increased publicity about the law. This enrollment increase is known as the “welcome mat” or “woodwork” effect.

Provider Shortage

With the expectation that more patients will enter the mental health system, questions must be raised about the supply of mental health providers in local communities to meet this increased demand.

As shown in Figure 2, nearly all Kansas counties (100 out of 105) have been designated by the federal government as Mental Health – Health Professional Shortage Areas (HPSAs). This means that the ratio of mental health providers to the population is not sufficient according to the criteria established by the federal government. All Kansas counties except Douglas, Johnson, Sedgwick, Shawnee and Wyandotte have been identified as Mental Health HPSAs. There are some parts of those counties that also have the designation. Approximately 47 percent of Kansans live in a county that is, in its entirety, a Mental Health HPSA.

Looking Forward

It will be important to monitor the capacity of the Kansas mental health system as policy changes at the federal and state levels place new demands on it.

Use of the mental health system could increase as new federal requirements within the ACA enhance the coverage of mental health services in some private insurance plans. The ACA also makes it easier for many previously uninsured Kansans to acquire health insurance and to afford mental health care. Because of these provisions, mental health providers — particularly those who accept private insurance — may experience an increase in demand for services.

It will also be important to monitor state-level policy changes that impact the existing public mental health system. Because some Kansans with mental health needs will remain uninsured, particularly since the state has not expanded Medicaid, funding to community mental health centers that serve the uninsured and underinsured should be monitored.

A recent report from the newly formed Governor’s Mental Health Task Force highlights the need for access to effective services for Kansans with mental illness, such as supported employment and housing, and peer support services. Many of these support services are not covered under traditional insurance and may require state funding. Other state-level initiatives also may impact utilization and capacity of the system such as the governor’s new mental health initiative, which focuses on access to mental health services for the state’s “most at-risk and challenging populations.”

By monitoring the capacity of the state’s mental health system, policymakers can remain informed about how changes in federal and state law impact services available for Kansans with mental illness.