Medicaid often better for complex behavioral needs

Medicaid often better for complex behavioral needs

By Clarissa Donnelly-DeRoven

This is the first story in an occasional series on the different types of care families and children with complex behavioral needs receive on Medicaid versus private insurance.

When 13-year-old CJ gets mad, he gets really mad, really, really mad. 

“Have you ever heard the term blind rage?” He asks on a thick spring morning in Asheville. His dog, Jake, who’s also around 13 years old, sits at CJ’s feet, waiting for another half of a biscuit. 

“It’s like a movie. It’s like you’re watching it, but you can’t do anything.” 

Because he is a minor, North Carolina Health News is using CJ’s initials, rather than his full name.

This anger, this rage, it forces CJ outside of his body. It stops him from seeing, feeling, or doing anything else. The only way CJ has found to push the anger out of his body, and put himself back in, is to run around, yell, scream and push people. 

“Mostly teachers,” he says with a small side smile that seems less like he’s being cheeky and more like he’s covering for shame. 

This rage mounted as the COVID-19 pandemic unfolded. Forced into virtual or hybrid schooling, his outbursts may not have been directed toward teachers as often, but they were still there.

Though the pandemic disrupted nearly everything in CJ’s life, it did come with one small blessing: his dad lost his job at a hotel and with it, his employer-sponsored health insurance. That meant CJ finally got onto Medicaid.

But how could getting kicked off private insurance — widely considered the gold standard of care and coverage in the U.S. — and put onto Medicaid be a good thing? 

Medicaid better for complex needs

CJ has autism, oppositional defiant disorder and disruptive mood dysregulation disorder. Kids like him often cannot get the services they need when they’re on private insurance: either the care isn’t covered at all, or an insurance company caps the number of times they can receive a service thereby rendering it useless, or the copays and deductibles make the services too expensive to access.

Attorneys who work in this field say there are many kids who fit this category, but there is no centralized screening process to figure out the actual number. 

Medicaid, on the other hand, is required to provide direct access to services for kids, like CJ, who are clinically eligible. Private insurance does not have such a legal requirement. 

In part, that’s because Medicaid is operated using federal funds. A provision within federal law says that any state which accepts Medicaid dollars to pay for services for people with disabilities is required to offer those services in the least restrictive environment possible, explained Joonu-Noel Andrews Coste. She’s an attorney with Disability Rights North Carolina who examines whether the state is in compliance with that federal requirement. 

“That’s really the delineation between Medicaid and private insurance,” she said. “Because private insurance is not accepting those federal Medicaid funds, they are not under that Medicaid obligation.” 

As far as she knows, there’s not a similar provision in federal law that applies to private insurance. 

“Medicaid law basically says in a nutshell, that if a child needs a service to either make improvements, which will allow that child to be successful in life, or to not lose improvements,” Coste said, “That is a service that under the law — if a state is accepting Medicaid funds — the state must provide to that child.” 

That doesn’t always happen in North Carolina, she says, but it’s the legal basis that organizations like hers use to advocate for children.

A family seeking services for a child with complex needs is often going to have more difficulty advocating for services through private insurance than they would on Medicaid. 

“When you have private insurance, in accepting that insurance policy you have signed a contract. You have agreed to their processes to resolve disputes,” Coste said. “You’ve agreed to resolve the issue in whatever way that contract stipulates. So you’re often not going to have as much legal standing and ability to really advocate and bring the state power to bear, for example, by bringing an appeal to court, which you can do under the Medicaid program.” 

Why Medicaid often covers more

There is no single federal agency that sets coverage standards or regulates the private health insurance industry. The federal government can set requirements of private health insurance. A provision from the Affordable Care Act, for example, prohibits insurance companies from denying coverage due to a “pre-existing condition.” Another federal law, from 1996, requires some plans to cover mental health and addiction services at the same level that they cover physical health. 

But the majority of private health insurance regulation happens at the state level.

“Most health insurance companies are required to provide mental health benefits but there are no state or federal requirements that say they must be equal to the benefits that Medicaid or Medicare provides,” said Marla Sink, a spokesperson for the North Carolina Department of Insurance. “Most, if not all, health insurers also cover physical, occupational and speech therapy but again, there are no statutory requirements that these must be equal to what is covered under Medicaid.”

This means that people with significant behavioral needs are likely to have access to more comprehensive care if they have Medicaid instead of private insurance. 

“For years we have lobbied for people on Medicaid to get their disability-related needs met,” said Corye Dunn, the director of public policy at Disability Rights North Carolina. They’ve tried to lobby private health insurance to do the same. But, “private insurance companies have resisted mightily any efforts to make that happen,” she said.

“Medicaid is designed for people with low incomes and people with disabilities,” Dunn added. “Its benefit package has — from the beginning — been designed differently than private insurance, especially employer-provided insurance.”

The insurance industry, including Medicaid, also delineates between mental illnesses – which get covered – and developmental disabilities— which often do not get covered. 

“For a long time in our country, we have treated some things related to disability as health care and some not,” Dunn said. 

It comes down to a distinction between “habilitative services” and “rehabilitative services.” If somebody is re-learning how to walk and talk after a stroke, that is rehabilitative and generally health insurance will cover it. But, if somebody is learning to walk and talk for the first time — as is often the case for people with developmental disabilities, such as autism — that service is considered habilitative and will likely not be covered.

“That distinction is really blurry and messy and imprecise,” Dunn said. “Sometimes it feels like nonsense.”

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