Individuals with psychiatric disorders and other disabilities frequently require ongoing medical treatment, mental health services, in-home assistance, and other support to secure and maintain employment. Health insurance is, therefore, a critical factor regarding their ability to work. Some aspects of the ACA might help this population gain insurance through public or private channels, as outlined below.
1. The Medicaid Expansion and Health Insurance Exchanges
Beginning in January 2014, the ACA provides federal funding for states that choose to expand Medicaid eligibility to include individuals with incomes up to 133 percent of the FPL, regardless of disability or parental status. A 5 percent income disregard established in the ACA effectively raises this limit to 138 percent of the FPL (HHS, CMS n.d.). The Medicaid expansion is likely to have an important effect on the ability of people with disabilities with low and moderate income, but who are not eligible or who do not meet the definition of disability for SSI or SSDI, to obtain health insurance. The effect will vary by state,however, as the Supreme Court has ruled that each state can decide whether to expand its Medicaid program (Musumeci 2012).
In all states, individuals can purchase insurance through health insurance exchanges with open enrollment beginning October 1, 2013 (HHS n.d.). In 2014, premium tax credits became available to help those with incomes between 100 percent and 400 percent of the FPL afford insurance through these exchanges if they are not eligible for coverage through their employer or through public programs. Even individuals who are eligible for coverage through an employer can receive premium tax credits if the employer's share of the cost of coverage is less than 60 percent or if the premium for individual coverage is more than 9.5 percent of the person's income. In addition, cost-sharing subsidies are available--through deductibles, co-pays, or co-insurance--to individuals with incomes at or below 250 percent of the FPL to help limit out-of-pocket costs (Kaiser Family Foundation 2012). These provisions could allow people with psychiatric disorders or other disabilities who do not qualify for Medicaid to purchase insurance on their own, regardless of employment status.
In states that do not expand their Medicaid programs, those who are ineligible for Medicaid but remain below 100 percent of the FPL cannot receive premium tax credits and will likely be unable to afford private insurance (Kaiser Family Foundation 2012). Approximately two-thirds of the people who would have been eligible for Medicaid if the expansion had been nationwide will have income too low to qualify for exchange subsidies (Congressional Budget Office 2012).
2. Expanded Availability of Mental Health Services Through Public and Private Insurance Coverage
Before the ACA, the Mental Health Parity Act of 1996--together with the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008--created the nation's federal mental health parity requirements (Sarata 2011). Neither of these laws mandated that insurers offer mental health benefits. Rather, they required that employers choosing to offer these benefits provide them at levels similar to medical and surgical benefits. The Mental Health Parity Act of 1996 forbade group health insurance plans--defined as those with more than 50 employees--from placing annual and lifetime dollar limits on mental health benefits that were less than those placed on medical and surgical benefits. The MHPAEA prohibits group insurance plans from imposing financial requirements (such as co-insurance, deductibles, or co-payments) or treatment limitations on mental health benefits in a more restrictive way than these requirements or limitations are imposed on most medical or surgical benefits. It also extends these parity requirements to services for substance use disorders, and requires parity in in-network and out-of-network benefits (Sarata 2011; SAMHSA 2011).
Until the enactment of the ACA, coverage of mental health and substance use disorder benefits by private insurers remained optional. In addition, the federal parity law applied only to large group insurance plans. The ACA, however, requires that any insurance package offered in the individual or small-group markets, both inside and outside of the exchanges, cover certain categories of services, known as the "essential health benefits" (EHB) (Kaiser Family Foundation 2013; HHS 2012).22 Services for mental health and substance use disorders, provided in compliance with federal parity requirements, are included in the list of required benefits. Further, in implementing the EHB provisions of the ACA, HHS has finalized regulations that apply federal parity requirements to the mental health and substance use disorder benefits that both small-group and individual plans must include as part of the EHB requirements (Beronio et al. 2013).23
However, HHS has allowed states significant latitude in defining the scope of benefits (Siegwarth & Koyanagi 2012). States are required to select a "benchmark" plan that may be: "(1) the largest plan by enrollment in any of the three largest products in the state's small-group market; (2) any of the largest three state employee health benefit plans options by enrollment; (3) any of the largest three national Federal Employees Health Benefits Program plan options by enrollment; or (4) the largest insured commercial HMO in the state" (HHS 2012). The scope of benefits available under the selected plan then serves as the "benchmark" for plans in that state offered through the insurance exchange. If the selected plan does not include any of the essential benefits required under the ACA, states must supplement the plan by adding the entire category of benefits from another benchmark plan that does include those services. Additionally, strong non-discrimination language in the law ensures that plans will be designed in a way that prevents insurers from making decisions about coverage, reimbursement rates, establishing incentive programs, and designing benefits based on degree of disability or health conditions. This is highly relevant for mental health services, as employer plans do not always offer this category of service (Siegwarth & Koyanagi 2012). Even with the introduction of health insurance exchanges, however, it remains unlikely that many private insurance plans will provide employment supports to their members. It will become even more important to understand how public sources of funding can be used to provide employment supports to people with psychiatric disorders.
In addition to their application in the design of EHBs, "benchmark" plans are also relevant for the Medicaid expansion population. States are not required to offer their full Medicaid plans to the newly eligible, but may instead offer a plan that simply meets the benchmark requirements established in section 1937 of the Social Security Act, supplemented as necessary to meet the ACA's EHB requirements (for example, adding coverage for substance use disorders if not already included in the benchmark plan [Siegwarth & Koyanagi 2012]). These alternative benefit plans, as CMS has termed them, must also meet the federal parity requirements. As long as these requirements are met, states may provide a different benefit package for new Medicaid beneficiaries. However, some groups are considered exempt; they cannot be required to enroll in the alternative benefit plans and are entitled to all covered Medicaid services which sometimes include SE (Bazelon Center 2012b; Siegwarth & Koyanagi 2012). Federal regulations include "individuals with disabling mental disorders" and "individuals with physical and/or mental disabilities that significantly impair their ability to perform one or more activities of daily living," within the exempt category of medically frail and special-needs populations. Individuals with mental illness outside of the aforementioned two categories are not exempt from enrollment in limited benefit plans (42 CFR § 440.315(f)).24
Although states may choose to provide an alternative benefit package to newly eligible adults, they have the option of providing their full Medicaid package to these individuals using the benchmark option of "secretary approved coverage." Additionally, states may provide different benchmark packages targeted to different populations, so they can, if they wish, tailor benefits, including employment-support needs25 to meet the unique needs of individuals with mental illnesses (CMS 2012). Still, although the ACA provisions might increase access to mental health services that may be important for maintaining employment, private plans offered on the exchanges are not required to provide other employment-support services. Therefore, individuals with psychiatric disorders insured through them might still lack supports they need to obtain and maintain employment.
3. Coverage for Youths Up to Age 26
Under the ACA, young adults can remain enrolled in a parent's employer-based or individual insurance plan until they reach age 26 (ACA 2010). This provision is particularly important for TAY who experience their first mental health symptoms and may need EI to prevent psychosis. These young people often are not yet eligible for public health insurance coverage, as Medicaid coverage is generally unavailable for childless adults unless they meet the SSA definition of disability and have low earnings, making them eligible for SSI or SSDI benefits.26 Obtaining health care coverage through private plans is important for ensuring continued coverage of children with disabilities until age 26, and for ensuring that potentially disabling mental health symptoms are treated as they emerge.
4. Establishment of "Health Homes"
Under the Medicaid health home option established by the ACA, states are given an increased federal matching rate for reimbursing providers who offer "health home" services. The health home model--based on the medical home concept--is intended to enhance coordination of medical care, mental health, and substance use services, and community-based social services and supports for individuals with chronic illness (HHS 2010a). Health home services may be offered to individuals who: (1) have at least two chronic conditions; (2) have one chronic condition and are at risk for another; or (3) have one serious and persistent mental health condition. Services provided by a health home must include comprehensive care management, care coordination and health promotion, comprehensive transitional care from inpatient to other settings, individual and family support, referral to community and social support services when needed, and the use of health information technology when appropriate and feasible.
The health home option is designed to better integrate medical and behavioral health services, and is, therefore, highly relevant to individuals with mental health needs. A variety of health care providers can offer health home services, including community mental health centers or any other provider proposed by the state and approved by CMS (HHS 2010a). In their Medicaid State Plan amendments, states must describe the ways they will support health home providers in addressing a number of components, including coordinating and providing access to services for mental health and substance abuse, and providing referrals to community and social support services. Further, the ACA requires states to consult with SAMHSA regarding how best to address prevention and treatment of mental illness for individuals who are low income and/or who have one or more chronic illnesses. Although health homes are required to coordinate referrals of patients to social services--a broad category that could potentially include employment assistance--it is not clear whether those homes will necessarily provide employment services and supports. Also unclear is who will fund the social services or employment supports to which health home patients are referred.
5. Accountable Care Organizations
Accountable care organizations (ACOs) are provider-run entities in which the providers are responsible for the care of an entire enrolled population and may share in any cost savings that result from improvements in quality and efficiency of care (Gold et al. 2012). The ACA and subsequent regulations authorized the formation of ACOs within the Medicare program. However, a few states have started to independently plan and implement Medicaid ACO initiatives. Some states, including Oregon and Colorado, have begun plans to integrate behavioral health and medical care risk arrangements as part of their ACO initiatives. Theoretically, ACOs could provide employment supports to people with psychiatric disorders and other disabilities, but they are not required to do so.
6. Amendments to Medicaid Section 1915(i) HCBS State Plan Option
The ACA made a number of changes to the Section 1915(i) state option (see Chapter V for more details on 1915(i)) that may make it more relevant to states that wish to provide SE to Medicaid beneficiaries. Perhaps most importantly, amendments were made to expand the types of services that states can provide to Medicaid beneficiaries. The DRA authorized states to offer a variety of HCBS through 1915(i), including case management and home health aides, and, for individuals with mental illnesses, psychosocial rehabilitation services, clinic services, and day treatment and other partial-hospitalization services. However, the list of services that states could furnish was originally limited to those specifically mentioned in the statute. Revisions made by the ACA also allow "such other services requested by the State as the Secretary may approve" (HHS 2010b), which may include all aspects of SE (Siegwarth & Koyanagi 2012).
The ACA also expanded financial eligibility criteria for 1915(i) services. As originally enacted by the DRA, states could provide 1915(i) services only to those with incomes up to 150 percent of the FPL who were eligible for Medicaid in the state (HHS 2010b). These individuals did not have to qualify for an institutional level of care. In addition to preserving this eligibility group, the ACA expanded financial eligibility to include a new group of beneficiaries, described as follows in a CMS memo to State Medicaid Directors: "The ACA adds a new section to 1915(i) that allows States the option of providing services to individuals with income up to 300 percent of the SSI Federal benefit rate. While individuals served in this new eligibility group must be eligible for HCBS under a 1915(c), (d), or (e) waiver or 1115 demonstration program, they do not have to be enrolled and receiving services in either waiver program."27
Another alteration to the original DRA language made by the ACA prohibits state waiting lists. Under the DRA, states could limit the provision of 1915(i) services to individuals in certain areas of the state and were permitted to establish waiting lists. Under the ACA, states must provide services to all individuals who meet financial eligibility and the state's needs-based eligibility criteria (HHS 2010b). All services must now be offered statewide and cannot be limited to certain areas.
Finally, as originally authorized through the DRA, states were required to ensure comparability in 1915(i) services and, therefore, were not permitted to target programs to certain populations. Under the ACA, states are given new flexibility to offer services that vary by amount, duration, type, and scope to different population groups. Therefore, a state could now target a 1915(i) benefit specifically to persons with chronic mental illness for evidence-based SE services. As of February 2012, eight states had an approved 1915(i) state plan option28 (Bazelon Center 2012a; Siegwarth & Koyanagi 2012).
Some observers have speculated that several of the ACA's amendments to 1915(i) will deter widespread adoption (Justice 2011); states may be particularly reluctant to accept the prohibition of waiting lists, which eliminates their ability to control costs through enrollment caps. Nevertheless, states have great freedom in designing their needs-based criteria, which might serve as a lever for states to control eligibility and enrollment--and hence costs--by imposing stringent requirements. In addition, states may have a financial incentive to adopt the 1915(i) option in order to substitute federal Medicaid funds for the state and county funds that many currently use to provide services to adults with mental illness (Bazelon Center 2012). Furthermore, the ability to target particular populations provides new flexibility states can use to offer comprehensive SE services while containing the costs by limiting their availability to individuals with very serious mental health conditions. As of April 2014, 14 states had an approved 1915(i) state plan option or plan to implement one in 2014 (Kaiser Family Foundation 2013).
7. Other Aspects of the ACA That May Benefit Individuals with Psychiatric Disorders and Other Disabilities
Several other elements of the ACA have the potential to help those with psychiatric disorders and other disabilities to maintain employment. First, the law eliminates the ability of insurers to decline coverage for individuals with pre-existing conditions. Therefore, those who fall into this category will no longer have to leave the labor force to acquire coverage through Medicaid (Altarum Institute 2010a). Second, the law prohibits health plans from establishing annual and lifetime limits on the dollar value of EHB. Finally, employers can no longer use wage levels to determine who within the company will be eligible for health insurance. This means that individuals with psychiatric disorders and other disabilities who have lower-wage jobs should now have greater ability to gain insurance through their employers.
If the provision of employment-related services to those with psychiatric disorders and other disabilities results in successful employment, transitions between Medicaid and other subsidized insurance programs may be inevitable. If an individual's income rises above 138 percent of the FPL because of employment, the individual will no longer qualify for Medicaid and must transition to other subsidized health insurance coverage (Koyanagi et al. 2011). Such coverage transitions may seriously disrupt care due to several factors, including: (1) differences in mental health and employment support-related benefits available under Medicaid and plans available through the exchanges; (2) differences in pharmaceuticals covered under different plans; and (3) the possible need to change doctors, thereby compromising the therapeutic alliance. Further, individuals who do well in SE programs funded by Medicaid may lose access to those programs because of increased income. This could potentially result in an inability to maintain any progress they have made in their health and employment, possibly resulting in relapse, job loss, and a renewed need and eligibility for Medicaid services. The cycle of gaining and losing Medicaid benefits has been referred to as "churning." States that closely align their Medicaid and private insurance coverage options may ease care disruptions and ensure that individuals with mental illness and other disabilities have uninterrupted access to needed care.
The ACA's Medicaid expansion will broaden the population of individuals who are eligible for Medicaid to individuals without disabilities and to individuals with disabilities who do not meet SSA's criteria for disability benefits. States that expand Medicaid to cover newly eligible individuals with mental illnesses may have the opportunity to shift state mental health and CMHS Block Grant funds to finance other support services, such as SE. One analysis estimates that the Medicaid expansion could result in states replacing $11 billion to $22 billion of state mental health funding with Medicaid funds (Buttgens et al. 2011). Because more people with psychiatric disorders will have coverage through Medicaid and the exchanges, SAMHSA is strongly encouraging states to use CMHS Block Grant funds to support treatment and support services not funded by Medicaid and other payers after implementation of the ACA, and to fund prevention efforts (HHS 2012). This may reduce the disincentive for Social Security disability beneficiaries to keep earnings low to retain Medicaid coverage, since using this funding mechanism could make these services available to people who do not receive Medicaid.