Skip to content
The National Council logo


Medicaid is an important funder for both mental health and substance use in the United States. It is currently the largest source of funding for America’s public mental health system and projections suggest that in the coming years, Medicaid will make up a growing share of the total national expenditures on substance use treatment.

Medicaid Expansion

The Affordable Care Act provided states the option to expand Medicaid to 138% of the federal poverty level. So far, 26 states and the District of Columbia have expanded Medicaid, adding more than 7.2 million people to the Medicaid rolls. According to Substance Abuse and Mental Health Services Administration estimates, these reforms have increased access to health care for about 3 million low-income individuals living with mental health and substance use conditions. In the 24 states that have not opted to expand Medicaid, an estimated 4 million people who have a mental health or substance use disorder would be eligible for coverage.

Excellence in Mental Health Act

Signed into law in March, 2014, the Excellence Act established a federal definition and criteria for “Certified Community Behavioral Health Clinics” or CCBHCs. It also provided for a 2-year, 8 state Medicaid demonstration program for CCBHCs to receive an enhanced payment rate. For more details, visit our Excellence Act website.

Medicaid Health IT Incentive Payments

The American Reinvestment and Recovery Act of 2009 created a $19 billion health information technology program which provides federal incentive payments for the adoption and meaningful use of health IT in medical practice. Unfortunately, behavioral health facilities and many behavioral health providers are not eligible to receive these incentive payments. The National Council supports legislation to include mental health and substance abuse providers in the Health IT incentive program. For more information, please visit our Behavioral Health IT page.

IMD Exclusion

The “Institutes for Mental Disorders” (IMD) exclusion imposes a federal payment prohibition on Medicaid services provided to patients who are residents of such institutions. Originally intended to prevent states from warehousing individuals with mental illness in institutions, the payment exclusion has posed a challenge for some residential mental health and substance use treatment centers. The Breaking Addiction Act of 2014 (H.R. 5136) would improve Americans’ access to substance use treatment by scaling back the federal payment exclusion for certain community-based substance use facilities.


The National Council and Community Catalyst offer recommendations on effective design and implementation of a screening and benefits determination approach for medically frail individuals, based on the experience of early-adopter states such as Arkansas and Iowa. This guidance focuses on defining this population and ensuring that their access to coverage is best suited to the unique and comprehensive health needs of persons with
mental health and substance abuse disorders.

Dual Eligible Enrollees

Dual eligibility applies to a portion of the population that is eligible for both Medicare and Medicaid. The approximately 9.6 million Medicare-Medicaid enrollees (MMEs) are among the most vulnerable and highest cost enrollees in the Medicaid and Medicare systems. Approximately twenty percent of those dually enrolled show evidence of one or more mental illness.

The Center for Medicare and Medicaid Services and States are seeking financial and administrative alignment of services for dually eligible Medicare-Medicaid enrollees. Fifteen states are moving forward, and 11 of them have chosen a capitated managed care approach. Be sure to check out the National Council’s Ensuring Access to Behavioral Healthcare through Integrated Managed Care: Options and Requirements paper for more information on dual eligible enrollees.

Medicaid Home- and Community-based Services Waivers

The Medicaid home and community-based services (HCBS) waiver provides opportunities for Medicaid beneficiaries to receive services in their own home or community. Currently, 47 states and the District of Columbia use these waivers to provide services to various groups, such as: the aged and disabled; individuals with mental health disorders; children: and individuals with HIV/AIDS.

In January 2014, the Centers for Medicare and Medicaid Services issued released a final rule that expands Medicaid payments for home- and community-based services and gives states more flexibility in administering their waiver programs. The final rule also gives states some flexibility in how they pay for home- and community-based care. States will have a transition period of one year to put these changes into effect.

Permanent Supportive Housing

Using Medicaid to Finance and Deliver Services in Supportive Housing: Challenges and Opportunities for Community Behavioral Health Organizations and Behavioral Authorities: Authored by the Technical Assistance Collaborative


Visit our Capitol Connector blog to read the most recent news about Medicaid.

  • Tasha Pack

    Can anyone please help my or give me some advice? I suffer from bipolar, depression, anxiety disorder, ans schizophrenia. Medicaid cut my off in May because I worked at a job in February for 5 days. Now I am almost out of medicine and I am having panic attacks everyday because I don’t have the money to pay for any of my medicine: psychiatric or high BP and cholesterol. Does anyone know where I can get emergency help for my medicine because I was told to come off of this medicine cold turkey is just not good. Your symptoms become worse. I am scared and I need help. I live in St. Louis, MO. If anyone knows how I can get my medicine, please write me back. Thank you for your time. (Sent by Tasha Pack)

©2015 National Council for Behavioral Health. All Rights Reserved.