As COVID protections end, patients classified as ‘medically needy’ fear new barriers to care
Boosted pandemic-era benefits may push some over the income line as disenrollments resume
Courtney Blake and her 10-year-old daughter live on their own in Ypsilanti, Michigan. Both of them struggle with chronic mental health issues and have been using Medicaid to help pay for their behavioral health care needs. But like millions of people across the country, Blake is worried that at the end of this health emergency she might not be able to access the services she desperately needs to take care of herself and her daughter.
“As a single mother who is raising her child I’ve had no help financially for a really long time now,” Blake said. “I had some help from our family a few years ago, but we’re estranged now. So it’s just me and her.”
Usually, in order to receive Medicaid benefits, beneficiaries must recertify every year that they actually qualify, by meeting income criteria, for example. But during the first years of the pandemic, the federal government said states could get increased federal matching funds in exchange for allowing “continuous enrollment” and agreeing not to eject anyone from the program for any reason. Disenrollments were paused in early 2020 for states that opted in, including Michigan.
That’s scheduled to end on March 31 nationwide. And the public health emergency status is expected to expire shortly after that, in mid-May.
New estimates from the Kaiser Family Foundation show that since states stopped cutting people off from their health benefits as the pandemic began, 23.3 million more people enrolled in Medicaid and the Children’s Health Insurance Program (CHIP). A total 95 million people in the U.S. will be using those programs by the end of this month, when disenrollments resume.
But now around 7 million people are likely at risk of losing their Medicaid, according to early estimates from federal officials. In fact, Idaho already dropped thousands of people. The result is that people may not realize they no longer have insurance until they actually need care.
The situation is causing distress to many who are certainly at risk of being disenrolled, but there are other people like Blake who may fall just over the income threshold to qualify for full access to Medicaid services.
Falling into the gap
Blake is considered “medically needy,” and one of the ways she’s qualified for Medicaid in Michigan is by deducting her medical expenses from her income in order to meet the income threshold — what’s known as a “spend down,” which is like a deductible. After paying this amount, she can get her Medicaid benefits.
But during the public health emergency, she didn’t have to pay those higher co-pays for her medical bills, because the continuous enrollment provision got rid of that requirement. Now, people like her would have to pay those fees again, according to a spokesperson from the Centers for Medicare & Medicaid Services.
After the Medicaid expansion expires, when someone is determined to be eligible again, they will “need to meet a new spend down to maintain Medicaid eligibility if they are not eligible through a separate Medicaid eligibility pathway,” said a spokesperson at the Centers for Medicare & Medicaid Services.
Blake was diagnosed with bipolar disorder in 2006, so she qualified for Social Security, Medicaid and Medicare. But during the pandemic, her Social Security benefit check increased.
“It’s a significantly higher amount than I’ve had in the past, but inflation happened and they cut off my food stamps in June. I’ve struggled every month since then and have had very little money left each month. It’s very stressful,” Blake said.
Now, she said she’s worried that the added Social Security income puts her just above the threshold for her to pay a “significantly high” spend down before her Medicaid kicks in.
The problem is that her income still isn’t high enough for her to afford all those mental health care expenses out of pocket. And she says Medicare only covers 80% of her outpatient medical fees.
The scenario only gets more dire if her child’s benefits are cut, too, she said.
“I don’t want my daughter’s Medicaid to be messed with at all. What if she can’t go to the community mental health center? She needs those services.”
Blake worked as a nurse between 2017 and 2019, right before the pandemic began. But after a distressing mental health episode, she had to quit her job.
At the same time, Blake said her daughter’s behavioral health needs had become more significant, and after some violent incidents, she needed closer supervision and care. So, Blake said, these services are necessary in order to take care of her child.
“She often has to go to the emergency room,” Blake said. “I couldn’t work. I had to take care of her.”
A greater toll
The COVID-19 pandemic exacerbated existing mental health issues, particularly for people with low incomes and those who’ve been marginalized. Studies have shown that the pandemic increased anxiety, depression, and stress among families with lower incomes. But accessing services has long been challenging for this population.
The American Psychological Association’s 2015 workforce survey found that almost two-thirds of responding psychologists rarely serve those with lower incomes. But even those providers who are serving patients with greater need, often find it difficult to accept Medicaid, due to low reimbursement rates.
Still, the pandemic widened accessibility by creating flexibility by how people access mental health care — including telehealth for patients on Medicaid. More people were able to get therapy in general, said Rachel Soule, director of Business Regulations & Independent Practice at the American Psychological Association.
“There’s going to be implications for people as they get kicked off, but it’s still unclear how many people are going to be impacted,” Soule said. “And there’s all sorts of stigmas that prevent people from even accessing services. If anything the COVID-19 pandemic made the lack of access to mental health services so much more apparent.”
But, for people like Courtney Blake, the public health emergency still eliminated barriers, such as a high spend down or deductible, that were causing them to avoid seeking treatment. Blake’s situation with losing some access to Medicaid due to Social Security payments is fairly specific, but it’s not uncommon.
For example, Dawn Williams, who also lives in Michigan, is worried her 16-year-old son Christian, who has special needs, will lose his access to Medicaid. Williams said her husband recently went on disability and while there were more children at home in the past, they’ve moved out. Their financial situation has technically changed since they no longer have as many dependents at home.
“We’re concerned my husband’s Social Security payment and my income from work raises our income above the threshold to qualify Christian for Medicaid. And since Christian is 16, he won’t qualify until he turns 18,” Williams said. “We are looking for other alternatives to get him on Medicaid once the health emergency ends … we’re just watching and waiting.”
According to recent data from the Centers for Medicare & Medicaid Services, Medicaid is the biggest public payer for mental health and substance use disorder (SUD) issues in the U.S. And as of 2019, nearly a quarter of adult and adolescent Medicaid beneficiaries used their coverage to receive mental health or substance use services.
Research from the Kaiser Family Foundation shows that when individuals are disenrolled from Medicaid, 65% have a period of being uninsured over the following 12 months and many re-enroll in Medicaid – but may have gaps in coverage.
“That’s obviously problematic for people who have chronic conditions … and we know that being uninsured makes it more likely that you may not access care when you need it,” said Robin Rudowitz, a vice president at the Kaiser Family Foundation who directs the program on Medicaid and the uninsured.
“Gaps in coverage have bigger consequences for individuals with mental health, substance abuse or other chronic conditions because without coverage individuals may not be able to access needed care or prescriptions,” Rudowitz said.
People experiencing mental health crises or other issues in rural areas may also be challenged to find care as rural hospitals also are struggling with the loss of pandemic funding.
“Before COVID-19 more than half of rural hospitals were operating at a loss, said Alan Morgan, head of the National Rural Hospital Association. “The federal government stepped in with help […] and it had a significant impact. Over the last two years, we’ve seen fewer than five rural hospitals close nationwide,” Morgan said. “Since December, we’ve seen three rural hospitals close already.”
These rural facilities are often key safety-net providers for people experiencing substance use disorders, especially. And Morgan said with lower payments coming in from decreased Medicaid enrollments, in addition to high costs of hiring labor, their ability to stay open will be threatened.
Policy options can help close the gap
Courtney Blake is hoping that she can work through her spend-down at a community mental health center, which may be able to cover those co-pays for her. Similarly, Williams is hoping that the state Medicaid agency would make an exception for her son through the state’s “Children’s Waiver Program,” or “Children with Serious Emotional Disturbance” waiver program that would allow him to get Medicaid for his special mental health needs.
Williams’ is worried though, because once the public health emergency ends, her son won’t have access to a community living support worker, without having to pay for that service out-of-pocket. A CLS worker is a trained specialist that can work with people who have special needs. Williams said her son’s mental health needs have been “extremely expensive.”
“The services that he will not get, which will become very expensive, are his counselor that we’ve had for a long time, and he will not be able to see his psychiatrist who prescribes his different medications. And I’m sure those will be expensive too,” she said. “If those services are discontinued it could be very traumatic.”
Soule said applying for waivers from the Centers for Medicare & Medicaid is one way states can expand access by creating exceptions for people with special needs who wouldn’t otherwise qualify for Medicaid coverage.
Many states have also adopted specific Section 1115 waivers, which allow local Medicaid departments to test programs related to substance use disorders and mental health. This provides more opportunities for beneficiaries with special needs to have their care covered.
So far Washington, D.C., and nearly three dozen states, including Michigan, have been approved for waivers to provide coverage for serious behavioral health issues.
“We are doing a multitude of things across the board on expanding access and capacity to behavioral health and substance use disorder services. We are actively reviewing where flexibilities exist and continue to work with the Michigan Legislature to secure funding for direct care recruitment and retention initiatives,” said Bob Wheatan, spokesman for Michigan Department of Health & Human Services, who added that the state offers behavioral health loan repayment programs.
Soule said it’s also important for mental health services to be reimbursed by Medicaid at a higher rate, so there are more providers who have financial flexibility to offer services to people who are uninsured or underinsured with sliding fee scales or pro-bono work.
“Even if you want to get paid and you’re submitting all the documents, often insurers give providers the runaround and by the time they get paid it’s six months out and a lot of practitioners don’t have the capacity to wait that long to get paid,” Soule said, adding that it’s harder for groups to make up the cost because they can’t see as many patients.
“While a doctor may see you for 10 minutes, when it comes to behavioral health services your standard of service is at least an hour.”
Some federal options already in the works
The Biden Administration announced a national mental health crisis strategy in March last year and unveiled the HHS Roadmap for Behavioral Health Integration in September. Some of the actions include:
- Federal funding for Certified Community Behavioral Health Clinics, which can offer mental health services at a lower cost especially for people on Medicaid, with lower income backgrounds, and those in rural areas. Last year, the administration awarded hundreds of millions of dollars to CCBHCs, and additionally awarded planning grants to 10 states, including Michigan, to expand the presence and services of CCBHCs.
- The establishment of a nationwide directory of opportunities for people to become crisis counselors for the “988” phone-line initiative that connects patients in crisis to information and resources on mental health care.
- Mental health training programs for peer support specialists to provide alternatives for people who cannot afford to see a psychologist or a licensed mental health professional. For example, the administration says the Department of Housing and Urban Development will launch a national effort to train housing counselors, among others, to recognize signs of emotional distress in residents and help connect them to mental health resources.
Another new flexibility that is likely here to stay is public health spending on telehealth services.
“There are some states that tied their telehealth Medicaid waivers to the federal public health emergency, so once that’s declared over there’s obviously an expiration on those waivers,” said Mei Kwong, executive director of the Center for Connected Health Policy. “But many states have already settled on their telehealth policies permanently.”
Kwong said although the policies are “all over the place,” there is one silver lining, which is that all states currently are reimbursing for telehealth services through Medicaid in some way.
For now, though, in anticipation of the end of the public health emergency, Blake and Williams say they’re trying to work with state Medicaid agents to see what their options are.
“I’m hoping with how angry and concerned people are with this that something is going to change, that they aren’t going to unfreeze this and they figure something else out,” Blake said. “How are you expecting us to pay our bills, put food on our tables, and pay our bills?”
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