State Mental Health Policies & Service Accessibility for Non-Medicaid Eligible SED Youth

Background and Purpose: States rely heavily on Medicaid to fund the home and community based services (HCBS) needed to keep youth with severe emotional disturbance (SED) safely in their home (Barbot et al., 2015). Thus, 30 to 40% of families with an SED child may be unable to afford the level of care needed for their child due to lack of insurance or their private insurance not covering intensive HCBS (Bailey & Davis, 2012; Mark & Buck, 2006). Many families with incomes above the Medicaid means-test have relinquished custody of their child to the state in order to obtain adequate mental health care (GAO, 2003). 

Some states use various policy interventions, such as Medicaid HCBS Waivers, to reduce such income barriers to care. Others have no such policies, in spite of the potential financial benefits of federal cost sharing for intensive mental health services, and possible associated diversion from long term care for the highest need youth (Barth, et al., 2007). Such policy variation across states contributes to disparities in unmet mental health need that is greater across state lines than between racial or income groups (Sturm, Ringel, & Andreyeva, 2003). However, little is known about what policies contribute to these disparities, and the factors that shape the creation and implementation of those policies. This study sought to understand 1) what mechanisms states use to fund and deliver HCBS to SED youth who do not qualify financially for Medicaid, and 2) the historical, political and strategic factors that influence how and why State Mental Health Authorities and Medicaid Agencies adopt these policies.

Methods: Qualitative data was collected through state policy documents and semi-structured, phone-based interviews with high-level administrators from 32 state mental health systems. Interviews focused on identifying how each state provides HCBS to youth and families whose incomes are above the Medicaid means-limit, as well as the state historical, political, and strategic factors that shape that approach. This data was analyzed for content regarding specific states’ mental health HCBS policies and decision making processes.

Results: Analysis revealed several strategies for funding HCBS for non-Medicaid eligible SED youth: 1915 (c) Medicaid Waivers, Section 1115 Medicaid waivers, the Katie Beckett Option/TEFRA, SCHIP, or state general funds. Some states reported no means of publically funding services for this population beyond limited federal block grants. Analysis suggests that variation in states’ use of each of these policies is driven by 1) state psychiatric residential infrastructure and funding strategies, 2) the level of fiscal need in the state, 3) socio-political orientation, particularly regarding families, children, and fiscal stewardship, 4) the total state resources available, 5) the presence of strong family advocacy groups in the state, and 6) the level of government-level collaboration between child serving agencies.

Conclusion: Knowledge of the variety of policy tools available to states, as well as the factors that influence a state’s adoption of such policies, supports future highly targeted studies comparing the impacts of state level HCBS mental health policies on youth and family outcomes.