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A large-scale Medicaid disenrollment that led to 190,000 enrollees in the state of Tennessee losing insurance in the mid-2000s reduced community hospitalizations related to mental health and substance use disorders (“psychiatric disorders”), according to a new multi-institutional study led by George Mason University and University of Virginia researchers.
Published last month in the Journal of Economic and Organizational Behavior, the study, “Losing Insurance and Psychiatric Hospitalizations,” finds a reduction in hospitalizations related to psychiatric disorders, cost-shifting of hospitalizations that did occur to other payers, and worsening of psychiatric disorders in Tennessee relative to geographically similar states. These findings are concerning as the U.S. is in the midst of a mental health and substance use crisis, and insurance coverage is a key factor in determining whether a patient receives psychiatric care.
“Losing Medicaid can prevent people from receiving valuable healthcare as they can no longer afford to pay for it,” said lead author Johanna Catherine Maclean, an associate professor in the Schar School of Policy and Government at Mason. “Our research suggests that, in addition to reducing psychiatric disorder-related hospitalizations, losing Medicaid shifted the costs of hospitalizations that did occur to other payers, patients themselves, and hospitals. Shifting costs of hospital care to patients can create financial hardship at a time when patients are dealing with stressful and complex medical conditions.”
Medicaid is the primary insurer of lower-income Americans, covering nearly 84 million people in 2022, and is the second-largest purchaser of psychiatric disorder treatment services in the U.S. Spurred by the Affordable Care Act and beginning in 2014, 40 states (including Washington, D.C.) have expanded Medicaid eligibility to all persons with incomes up to 138 percent of the federal poverty line. These insurance plans provide generous coverage for psychiatric disorder services.
Despite these changes, there have been calls by lawmakers to curtail access to Medicaid.
The study is the first to focus on how losing Medicaid can impact the use of psychiatric disorder-related healthcare. Previous studies have focused on how gaining Medicaid impacts use of these services.
The researchers analyzed community hospitalization data from the Agency for Health Care Quality and Research’s Health Care Cost and Utilization Project and the Tennessee Department of Health, and death certificate data from the National Center for Health Statistics Vital Statistics database.
“Our findings further highlight the role that Medicaid plays in promoting access to care, conferring financial protection, and improving quality of life,” said author Sebastian Tello-Trillo, assistant professor of public policy and economics at the University of Virginia Frank Batten School of Leadership and Public Policy. “These findings may be particularly timely as the country is recovering from a large-scale pandemic that imposed strain on individuals and our healthcare system.”
Douglas Webber, senior economist at the Federal Reserve Board of Governors is an additional coauthor of this research.