The Effects of Eliminating Behavioral Health Benefits in a Medicaid Population
- Presenter:
Chair: Jose Escarce; Discussant: Ana Balsa Mon June 5, 2006 15:30-17:00 Room 225
Rationale: In response to state budget shortfalls in 2003, the Oregon Health Plan made several changes to its benefit package offered to the enrollees who were not part of the “Categorically Eligible” Medicaid population. One important change was the elimination of coverage for outpatient substance abuse treatment, including methadone treatment for heroin addiction. As other states consider cuts in their coverage of substance abuse treatment, the Oregon experience can provide evidence about the expected impact on costs and utilization.
Objectives: The objective of this paper is to compare the effect of an elimination of the substance abuse benefit on methadone users’ utilization of medical services and expenditures for those services.
Methodology: We use data on claims from members of the Oregon Health Plan who were subject to the cuts in their benefit package. We selected individuals who were enrolled in the plan for at least six months before and after the 2003 benefit changes. 381 methadone users and 15,713 non-users were identified through the claims data. Following Hirano, Imbens, and Ridder, we used matching with an estimated propensity score to evaluate the difference-in-differences in outcomes between methadone users and non-users. We estimated the change in office visits to physicians, emergency department visits, and hospital admissions, and expenditures for these services.
Results: After the elimination of substance abuse treatment benefits, visits and expenditures for physician services and emergency services showed significant increases after the substance abuse benefit was eliminated. Inpatient admissions increased, but at a rate that was less than the control group.
Conclusions: Our results suggest that the elimination of outpatient substance abuse benefits increased expenses associated with emergency departments and office visits. Elimination of substance abuse programs may not be a effective method of reducing expenditures for Medicaid programs.
