Key Benefits Under Medicaid and the State Children's Health Insurance Program (SCHIP) for Children With Mental Health and Substance Abuse Problems

Publication Date: April 2004

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Health

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Abstract:

About 18% of all U.S. adolescents received mental health treatment in 2000. Almost $7 billion was spent for such services for teens in 1998. While many youth have used alcohol or other illicit drugs, less than 2% received treatment for substance use in 2000. In 1997, costs for such care for children under 18 totaled $604 million.

In this report, the availability of selected mental health and substance abuse services under Medicaid and SCHIP for low and moderate income children is explored. Under SCHIP, states may provide coverage by expanding Medicaid or creating a separate SCHIP program or both. Data from two CRS-sponsored surveys, documenting general limits placed on such services as of June, 2000, are presented. For Medicaid, including Medicaid expansions under SCHIP, survey results were reported for all 50 states and the District of Columbia. For separate SCHIP programs, survey results were reported for all 41 programs operating in 33 states.

Nearly all Medicaid and SCHIP programs covered inpatient and outpatient mental health services for children, and most also covered inpatient detoxification and outpatient substance abuse treatment. Such benefits were more frequently unlimited under Medicaid than under SCHIP. While the majority of Medicaid programs covered residential treatment centers, most SCHIP programs did not. In many cases, expressing benefit limits as a simple quantity (e.g., days of care, admissions per year, visits/hours per year) did not address the full scope of restrictions on coverage. Other means of limiting benefits were also reported (e.g., use of prior authorization, thresholds specific to condition/diagnosis, and treatment plan requirements). Under SCHIP, but not Medicaid, a single quantity limit was often applied to two or more related benefits combined rather than separately for each benefit category.

Coverage policies and benefit limits for children under Medicaid are seldom absolute in part because of special provisions in the law requiring that children receive all medically necessary services authorized in federal statute. This guarantee does not exist in SCHIP. Instead, SCHIP children have access to similar types of benefit packages available in the private sector.

Facing declining revenues and increased expenses, some states are implementing a number of Medicaid cost containment strategies focused on reductions in provider payments, and reductions in and/or elimination of optional services and populations, mostly affecting adults. Under SCHIP, some states are also capping enrollment and increasing beneficiary cost-sharing. While these proposed strategies appear to leave mental health and substance abuse benefits for children largely intact, they could effectively limit access to care.

Finally, this report also describes mental health parity and its application to Medicaid and SCHIP under current federal law, and related, pending legislation in the 108th Congress.