Drug Policy Expert Explains Potential Impact of Health Care Reform on Treatment

April 28th, 2010 | Posted by Stephanie Muller in Policy

Since the passage of federal health care reform earlier this year – the Patient Protection and Affordable Care Act (PL  111-148) and the companion Health Care and Education Reconciliation Act (PL  111-143) – many in the addiction treatment field have been wondering what kind of impact this will have on the delivery of substance abuse treatment. The 2008 passage of the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Plan (PL 100-343) (also known as the parity bill) was heralded by the addiction treatment community for prohibiting group health insurance plans that offer mental health and substance use disorder benefits from restricting access to care by limiting benefits or requiring higher out-of-pocket costs than those that apply to general medical and surgical coverage.

Given the sheer volume and complexity of the federal health care reform legislation, it can be overwhelming for treatment providers, and even more intimidating to those who are seeking their services, to determine how health care reform will affect them.

At an April 14 hearing on Capitol Hill to discuss the White House Office of National Drug Control Policy’s (ONDCP) proposed federal budget, John Carnevale, a drug policy expert who spent 11 years at ONDCP, offered an explanation as to how the provisions of the health care reform legislation may alter substance abuse services. The following information is taken directly from Carnevale’s testimony at the April 14 hearing.

First, all new “qualified health benefit plans” must offer a minimum set of “essential health benefits” by Jan. 1, 2014. These “essential health benefits” will be determined and updated annually by the Department of Health and Human Services (HHS); and although the details of those benefits have not yet been determined, the law explicitly stipulates that they must include substance abuse and mental health services.

Second, beginning Jan. 1, 2014, state Medicaid plans will offer care to all state residents who earn up to 133 percent of the federal poverty level; and as part of a Medicaid expansion, the federal government will finance 100 percent of newly eligible enrollees between 2014 and 2016; 95 percent in 2017; 94 percent in 2018; 93 percent in 2019; and 90 percent in 2020 in subsequent years. Additionally, there is a new requirement that all Medicaid programs offer a set of minimum essential benefits, including substance abuse services at parity.

Finally, beginning Jan. 1, 2014, an individual insurance mandate and open state-based insurance exchanges will allow individuals and eligible small businesses to purchase qualified health benefit plans subject to the minimum benefit requirements. Plans sold through these exchanges must offer substance abuse and mental health services at parity.

Essentially, what this means is that Medicaid will be a much greater source of funding for substance abuse treatment services beginning in 2014. According to Carnevale, health care reform and parity will not benefit everyone who needs treatment. Furthermore, it is unclear whether the benefits under Medicaid will include recovery and support services that are critical components of addiction treatment, he said. Carnevale noted that in order to expand access to substance abuse treatment services, the ONDCP will need to increase programs like Access To Recovery, the Substance Abuse and Mental Health Services Administration’s Substance Abuse Prevention and Treatment Block Grant and other targeted treatment programs.

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