Opinion: Medicaid expansion is hurting the mental health of the needy

The signs of America’s mental health crisis are everywhere. In response, policymakers have continued to focus on a popular strategy: expanding health coverage through safety net programs, especially Medicaid. Increasing the number of insured Americans, we are told, will ensure access to care, yet it is becoming increasingly clear that record Medicaid enrollment has not prevented the brunt of the mental health crisis from falling on society’s most vulnerable. In fact, our new research indicates this is not coincidence and that instead, spreading coverage out among more people may be part of the problem.

Other recent studies bear out the ways in which vulnerable populations are struggling to receive mental health treatment. Among children of low-income parents — a group Medicaid was originally created to help and for whom research finds the most positive impacts — only half of emergency room visits for mental health crises get adequate follow-up care, and nearly two-thirds of victims of traumatic firearm injuries don’t receive timely mental health support.

And the problems are not limited to children. In new research conducted with our Mercatus Center colleague Kofi Ampaabeng, we find that the 2014 expansion of Medicaid to tens of millions of adults — the key pillar of “Obamacare” — worsened the mental health among existing Medicaid beneficiaries between the ages of 40 and 64, causing a marked 10.9%  increase in symptoms of depression.

It’s hard to know the causal effect of a policy, let alone which mechanism is driving the effect. But all signs point toward the obvious: The surge in the use of health care services — especially mental health treatment — by newly enrolled beneficiaries left fewer providers available to care for those already relying on Medicaid.

We find larger effects among women and disabled beneficiaries, people who are statistically more likely to need mental health services. We also find more pronounced effects among rural residents and for people living in newly designated mental health shortage areas — all consistent with the notion that Medicaid expansions placed strain on already stretched health systems and crowded out care for the most needy.

To be sure, trouble accessing care is nothing new to people on Medicaid, who face long wait times for appointments and prescription drugs, and routinely have difficulty receiving specialist services, especially for mental health or psychiatric care. Our work suggests coverage expansions exacerbate these longstanding challenges.

The law’s backers promised that expanding Medicaid would deliver far-reaching benefits but paid insufficient attention to the distributional effects. There’s no doubt that the expansion improved mental health among new enrollees and drove down suicide rates, partly through reduced financial distress and partly by connecting drug users to substance abuse treatment.

While we should not ignore mental health progress among new enrollees, policymakers need to pay closer attention to the unintended consequences of expanding public insurance programs. The majority of research related to Medicaid expansion has focused on those receiving coverage from the reforms, but spillover effects are arguably even more important, given that the original Medicaid population outnumbers the expansion group by about three to one. On net, even small negative spillover effects could completely offset the benefits to the newly covered.

As policymakers search for ways to address America’s mental health crisis, increasing the availability of mental health care, not merely insurance coverage, should be at the forefront of their agendas. A good place to start would be by reforming scope-of-practice laws, relaxing occupational licensing restrictions, and expanding telehealth. Most importantly, the quest for universal coverage, commendable as it may be, must not come at the expense of the most vulnerable in society.

Markus Bjoerkheim is a postdoctoral fellow and Liam Sigaud is a postgraduate fellow with the Mercatus Center at George Mason University’s Open Health Project. ©2023 Tribune Content Agency.