Dr. Cali Estes - The Addiction Coach ®

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Obamacare’s New Changes on Addiction Coverage…Better or Worse?

Amidst all the controversy (and seemingly endless efforts at repeal), President Obama’s 2008 healthcare act has and will create real changes in Americans’ lives.  People struggling with addiction issues may see as many effects as anyone, with some major transformations to addiction coverage beginning this year.
Provisions of the health care law — better known as “Obamacare,” but officially the Affordable Care Act (ACA) — have been gradually implemented since the legislation’s passage in 2008. Some of the major provisions finally take effect in 2014—for example, people can begin receiving health insurance under the so-called health insurance exchanges this year, following the (notoriously imperfect) sign-up period in late 2013.
Several of the most important aspects of the ACA for the world of addiction also finally roll out in 2014.  The federal government, for example, released final regulations in November concerning the ACA’s requirements that mental health and substance abuse treatment receive equal footing with medical health care.
   The changes, despite some potential limitations, will mean big differences for addiction coverage in the United States, said Alden Bianchi, an employee benefits attorney who composed a report on the final regulations for the National Law Review. “These rules are…a sea change in the way that health plans approach the coverage of mental health and substance abuse disorder benefits,” he said.
The ACA’s effects on addiction treatment, however, begin with the legislation’s basic expansion of healthcare access.  An estimated 47 million Americans went without health insurance in 2012. The ACA aims to cover many of them, primarily by expanding Medicaid and offering low-cost insurance through the “Health Insurance Marketplaces.”
With big implications for those facing addiction problems, the ACA gave every state the option of expanding Medicaid to a greater number of poor individuals and families.
“It’s a big deal that Medicaid expansion is happening in the way that it’s happening,” said Daliah Heller, a consultant working on issues of health care and U.S. drug policy reform, and co-author of the ACLU’s report Healthcare Not Handcuffs.
The federally and state-funded Medicaid program provides a basic level of health insurance coverage to people living under the federal poverty line. But that line, as currently constructed, gives a pretty distorted image of “poverty,” said Heller. For example, the existing rules state that a family of three living in New Jersey must make less than $25,000 a year to qualify as poor.
“So that’s obviously not much money for a family of three to live on,” she said.
By accepting additional federal money allocated by the ACA, states can expand Medicaid coverage to individuals and families living at 133% of the poverty level. This means many more people facing actual, real-life poverty will gain new access to healthcare, Heller said. The ACA will also expand Medicaid coverage to single and childless adults (it had previously primarily gone to pregnant women, families and children).
“Increasing the coverage even that little bit is going to have a significant effect for some people,” Heller said. “It actually gives them coverage where otherwise it would be difficult for them to afford it.”
A total of 25 states, along with Washington, D.C., have so far decided to implement the Medicaid expansion. This means a great deal for addiction coverage, because the low-income population includes a disproportionate amount of people struggling with addiction, Heller said.
Even in those states that chose not to expand Medicaid, more people are set to receive healthcare coverage through the healthcare marketplace exchanges. Those exchanges come with incentives, such as subsidies and tax breaks, to help lower-income people buy health insurance, Heller said. This provides both a potential backup in states that opted out of the Medicaid expansion—and an increase in healthcare access in all states.
All told, the ACA stands to newly insure some 30 million to 33 million people in the United States, according to Congressional Budget Office estimates.
Coverage thus expanded, the ACA then specifically addresses addiction by regulating what health benefits insurance plans must cover.
Or, as Heller puts it, “Now you have health coverage, which is step one. Step two is, will that health insurance pay for treatment?”
And the ACA represents a massive step forward in getting insurance plans to cover addiction treatment. First, starting this year, the legislation bars insurers from denying coverage due to pre-existing conditions—including substance abuse. But perhaps the most important changes come from the ACA’s expansion of parity rules. In brief, “parity” means that insurance plans must cover mental health and substance abuse treatment at the same level as regular medical care.
In 2008, Congress passed the Mental Health Parity and Addiction Equity Act (MHPAEA). The law closed up loopholes in a 1996 parity act, now requiring parity in terms of both financial and treatment limitations, Bianchi said. The financial side means deductibles and copays, while treatment parity refers to the number of annual visits and geographic limits for insurance networks.
The rules take great pains to be comprehensive and actually, finally impose real parity, Bianchi said. “The regulators did a very good job with this rule,” he said.
MHPAEA applied to group health and insurance plans, but the ACA incorporates MHPAEA’s parity structure, applying it to the marketplace exchange and Medicaid insurance plans. The healthcare law’s parity effects result, at base, from the inclusion of mental health and substance abuse in the ACA’s list of 10 “Essential Health Benefits.” These 10 items define the areas of coverage that basic health care plans across the country must cover—at parity.
“So, for example, if there are two medications available for a particular condition, or two types of treatment,” you have to have “the same level of treatment available for mental health and substance abuse disorders in that plan,” Heller said.
That requirement will give nearly 32 million Americans new access to substance abuse and mental health treatment, according to estimates from the U.S. Health and Human Services Department. And it will expand mental health and substance abuse benefits for an additional 31 million Americans, the HHS estimates.
“This is a big deal for addiction treatment access,” Heller said.
The Essential Health Benefits framework, unfortunately, does impose some limits on the extent of addiction coverage, Heller said. Defining benchmark plans for each state, that list of 10 benefits requires only “a bare minimum” of addiction treatment coverage, leaving out medication like methadone, Heller said. Expanding benchmark plans to include such medication treatment will require further advocacy, Heller said.
The ACA will have some of its most profound effects on addiction healthcare coverage in the criminal justice system. By default, prisons and jails end up treating a large portion of the U.S. population that has substance abuse problems.
“Under the old model, really, poor people didn’t have access to substance abuse or mental health treatment—unless it was through the criminal justice system,” said Christie Donner, executive director of the Colorado Criminal Justice Reform Coalition, which has been convening a panel of criminal justice and health care representatives to plan ACA implementation.
The ACA could help change all that. First, the overall expanded insurance access means lower-income people can get access to health coverage “without having to be involved in the criminal justice system at all,” Donner said. This matters because people behind bars frequently come from lower-income backgrounds.
Second, prisoners with substance abuse problems today suffer from a lack of “continuity of care, “Donner said. They arrive in lock-up with substance abuse issues, receive some treatment, then leave the criminal justice system and lose access to care. The ACA, primarily through Medicaid, can keep many of these individuals covered after their sentences, Donner said.
The additional, federal money coming in through Medicaid could also help criminal justice agencies expand treatment access to current prisoners, she said. And, buoyed by ACA money, those agencies could use some of their own funds to improve the quality of care or create incarceration alternatives, like residential substance abuse treatment, Donner said.
That hoped-for transformation for addiction coverage, both in the criminal justice system and in general, could still stall during implementation, however, Donner said.
“Implementation of ACA with folks in the criminal justice system will require significant changes with how the criminal justice system operates,” she said. “Because they are going to have to adapt to the healthcare model, not the other way around.”
Prisons and jails, for example, will have to switch from their networks of treatment providers to those approved by Medicaid for some treatments, Donner said. All of that will require effort and advocacy, she said.
“If we don’t figure this out…there won’t be ACA implementation,” Donner said. “There’s a million different ways where this could break down.”
The healthcare system, too, faces a monumental challenge in implementing the promise of ACA, Heller said. Providers must scale up significantly to deal with all the additional insured individuals in need of substance abuse treatment, she said.
But as the ACA transforms the funding and payment landscape for substance abuse treatment, healthcare providers are working on expansion, Donner said.
“I know they’re crunching numbers to say, okay, how do we have to scale up, how many docs do we need, how many mental health folks do we need?” she said.
One aspect of the ACA could be particularly helpful in scaling up—the integration of behavioral health (mental and substance abuse) with physical health. That coordination provides the opportunity to expand addiction treatment in alternative ways, Heller said. “We may not have enough treatment, so how about supporting, for example, community health centers to build out substance use disorder treatment?”
And the basic regulations, too, could fail to meet expectations, as insurance agencies may try to skirt the rules. For instance, some have pointed out that insurance plans could violate the spirit of the parity laws via pre-authorization rules. Essentially, both medical and behavioral benefits could call for pre-authorization—but, in practice, only the mental and substance abuse treatments would require it, Bianchi said.
Still, despite the challenges, the ACA and its associated regulations will make a tremendous difference, particularly among those populations disproportionately affected by substance abuse.
“I think that the ACA is an absolute game changer,” Donner said. “And I’m extremely excited about the potential of it.”
One of the most important changes in the ACA may come from its larger philosophical implications, Heller said. Essentially, President Obama’s health care act enshrines in federal law that substance abuse is a medical issue—not the result of poor morals, and not a criminal justice problem, Heller said.
That reflects a greater societal change, as the country as a whole has gotten over some of the stigma it once held for substance abuse, Bianchi said. “This is a shift that has taken place over generations,” he said. “It’s not just a matter of a couple of years and a couple of laws.”
The ACA’s federal definition of addiction as a healthcare issue may even pave the way to greater changes, potentially including decriminalization, Heller said.
“If we view ACA as this document that is now federal policy…it’s sort of de facto recognition that it’s not a criminal justice issue. It needs to be addressed as a health issue.”
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