Less than 20 percent of people who receive publicly funded mental health services are employed, yet less than 2 percent receive evidence-based supported employment (SE) services that might improve their employment prospects (Substance Abuse and Mental Health Services Administration [SAMHSA] 2011). Research consistently demonstrates that, with the right supports, 40-60 percent of people with serious mental illness (SMI) can work, although many work part-time, intermittently, or at low wages (Blyler 2003; Bond 2004, 2007; SAMHSA 2011). Unemployment or low levels of work may lead to reliance on disability benefit programs, which gives the social safety-net an important role in their lives.
Individuals who are unable to work because of psychiatric disorders often turn to publicly funded income support and health insurance programs to survive. Sixty-four percent of those receiving publicly funded mental health services receive Medicaid (SAMHSA 2011). Working-age people with psychiatric disorders are the largest and most rapidly expanding group of Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) beneficiaries. Currently, 36 percent of SSDI and 60 percent of working-age SSI beneficiaries have a mental illness (Social Security Administration [SSA] 2011a, 2011b), and estimates suggest that less than 4 percent of SSDI beneficiaries exit the program due to earnings within the first ten years of enrollment (Stapleton et al. 2010). Estimates of the direct costs of providing SSDI and SSI for people with SMI and the lost earnings resulting from unemployment exceed $217 billion annually (Insel 2008).
A lack of health insurance and access to affordable health care may contribute to low employment rates among people with psychiatric disorders and other disabilities. Individuals who do not have access to insurance through a family member may lack health insurance if they do not work, work in a job that does not offer health benefits, or cannot afford to pay the premiums associated with the plan offered by their employer. Without access to health insurance, people may not be able to afford the treatment needed to improve or maintain their mental health sufficiently to allow them to work. The need for health insurance, therefore, can be a powerful incentive for uninsured people experiencing persistent mental health problems or other disabling conditions to apply for SSI or SSDI to obtain Medicare and/or Medicaid coverage, even if they would otherwise be able to work (Maestas 2012).
Limited access to affordable health care has been a particular barrier for people with psychiatric disorders because of the historical lack of parity between insurance coverage of mental health and other types of health care. In the SAMHSA Employment Intervention Demonstration Program (EIDP), a multisite research study investigating the effectiveness of SE for improving employment among adults with SMI, only 24 percent of full-time jobs obtained by treatment-group members included medical benefits, and even fewer covered mental health care (Cook et al. 2006). Before the Affordable Care Act (ACA), young people who experienced serious mental health challenges for the first time as adults were especially vulnerable to being uninsured when they aged out of their parents' coverage but were not yet employed in jobs that provided health benefits.
The ACA, which was implemented in January 2014, has the potential to mitigate employment barriers resulting from the lack of affordable health care. Relevant provisions include prohibitions on denying coverage based on pre-existing mental health conditions and on annual and lifetime coverage limits, extended Medicaid eligibility to working-age adults with income of up to 138 percent of the federal poverty level (FPL), and subsidies to people with incomes up to 400 percent of the FPL to purchase health insurance from state health exchanges (Rosenbaum et al. 2011; Levy et al. 2012). The ACA also expands the federal mental health parity requirements (Sarata 2011) and mandates coverage of mental health and substance use disorder services among individual, small-group, and Medicaid health insurance plans (Centers for Medicare & Medicaid Services [CMS] 2011). With improved access to affordable health insurance under the ACA, consumers may no longer have to rely solely on SSDI and SSI to obtain needed health care. With the link between SSI and SSDI participation and access to public health insurance removed, people with SMI will be more able to work without fear of risking their mental health due to a lack of health insurance.