The Medicaid Mental Health Gap

Guest Opinion

By Emma Smith | April 6, 2024

If you have Medicaid, like a third of all Michigan residents, you may have noticed that finding a therapist who is willing and able to take your insurance has become increasingly difficult in the past year or so.

At the start of 2023, mental health therapists began noticing a sharp decrease in the reimbursement rate from Meridian of Michigan, the largest Medicaid provider in our state. This decrease was instituted without notice or explanation. Meridian has since stated that the Michigan Department of Health and Human Services (MDHHS) forced them to decrease their rates, but MDHHS swiftly refuted this claim and confirmed it to be false.

Originally, Meridian was the only plan to drop reimbursement rates, but other Medicaid providers have since followed suit. As a result, many therapists are no longer taking Medicaid or are placing caps on the number of Medicaid clients they’re able to see.

Now, before you begin to think of us therapists as money-hungry, self-interested profiteers seeking to make a fortune from other people’s distress, I’d ask that you consider a few key factors related to the financial viability of the mental health field. For one thing, the “hourly rate” a therapist charges is not how much said therapist makes per hour. Included in that rate is the time it takes to document, research, and seek out appropriate therapeutic techniques for each individual client.

Like any business, there are also overhead costs associated with the job, such as office space and utilities, annual licensing fees, continuing education requirements, software, and advertising fees. If a client doesn’t show up or cancels their session, the therapist doesn’t get paid for their time.

Let us not also forget that to be a mental health therapist, one needs to earn a graduate degree, a requirement not known for its affordability. I would like to tell you it all pays off, but financially speaking, it doesn’t. In fact, in 2024, the job of mental health therapist earned the number two slot nationwide for the lowest paying profession that requires a master’s degree.

After taking all of that into consideration, along with the fact that Medicaid reimbursement rates are 30-50 percent less, on average, than the rate of commercial insurance reimbursement, it’s painfully clear that taking on Medicaid clients is simply not sustainable for most therapy practices.

This brings us to the heart of the matter, the issue we should all care about, which is that the most vulnerable people in our community are being systematically prevented from accessing mental health services.

Similar to other healthcare sectors, mental health has moved toward a prevention model, with an effort to detect and treat mental disorders as early as possible. It follows, then, that people receiving Medicaid, the majority of whom are children and teens, should be the ones with the most access to early intervention. This is especially important when you consider that the second leading cause of death among adolescents is suicide, and half of all mental health disorders become evident by age 14.

When children and teens receive mental healthcare early on, they are more likely to develop positive coping mechanisms and strategies that will help them in adulthood. When mental health goes untreated, the consequences can range from missed educational opportunities; to involvement with the court system; to, in the worst case scenario, suicide.

Families who receive Medicaid are families who are already struggling in their daily lives, often with financial stress and all the burdens that go along with having a lower socioeconomic status. And while expanded access to Medicaid was certainly a step in the right direction, the de-incentivization for therapists to take Medicaid clients is, by contrast, like taking several steps back.

Therapists want to help the most vulnerable members of our community. We really, truly do. We didn’t get into this field for the money, but without it, we can’t run a viable business. The work of a therapist is valuable, important, and in many cases, life-saving. People receiving Medicaid are just as deserving of our help as those with commercial insurance or the ability to pay out of pocket. For a population that already faces so many disadvantages, adding one more barrier to treatment is not only unethical, it’s devastating.

Want to help? Contact your state legislators and ask for mental health parity, as well as parity between Medicaid and other mental health providers.

Emma Smith works as part of the Development Team at Child and Family Services of Northwestern Michigan. She is also a clinical mental health therapist and owner of Blue Thistle Therapy, a local private practice.