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Assessing the House Opioid Package’s Medicaid Bills

While Some Advance Access to Treatment, One Raises Serious Concerns

June 11, 2018

Over the next two weeks, the House is expected to consider a series of bills aimed at addressing the opioid epidemic, including bills making changes to Medicaid. The Affordable Care Act’s (ACA) expansion of Medicaid to millions of low-income adults has dramatically expanded coverage and access to treatment for people with substance use disorders (SUDs).  But to fully realize the promise of increased access, states need to cover the full continuum of treatment that people with SUDs need for their recovery, and enough providers must offer those services.

The costliest of the bills, which would allow Medicaid to pay for institutional care, could undermine current state and federal efforts to ensure that people with SUDs have access to the full continuum of SUD treatment.While not a comprehensive approach to the opioid epidemic, several of the Medicaid provisions likely to reach the House floor would take small but positive steps toward increasing provider capacity, ensuring a full continuum of care, and preventing people with SUDs from experiencing gaps in treatment.  But the costliest of the bills, which would allow Medicaid to pay for institutional care, goes in the opposite direction: it could undermine current state and federal efforts to ensure that people with SUDs have access to the full continuum of SUD treatment.[1]

Medicaid Has Critical Role in Addressing Opioid Epidemic — and Can Do More

The ACA’s Medicaid expansion has dramatically increased coverage for people with SUDs.  Prior to expansion, many low-income, non-elderly adults with SUDs weren’t eligible for Medicaid — and were largely left uninsured — because they didn’t meet the strict eligibility criteria for federal disability programs.  The uninsured rate among people with opioid-related hospitalizations fell dramatically in states that adopted the Medicaid expansion — from 13.4 percent in 2013 (the year before expansion took effect) to just 2.9 percent two years later.[2]  After Kentucky expanded Medicaid in 2014, the number of Medicaid beneficiaries using substance use treatment services in the state jumped by 700 percent.[3]

The ACA also required states to include SUD services as a covered Medicaid benefit.  People eligible for Medicaid as part of the ACA expansion must receive a benefit plan that’s based on commercial health insurance coverage and includes all of the ACA’s essential health benefits, including behavioral health services.[4]  The ACA doesn’t dictate which behavioral health services states must cover, but states have flexibility to cover a wide range of substance use treatment services in Medicaid, including inpatient or outpatient detoxification, medication-assisted treatment, and counseling services.  While Medicaid usually doesn’t cover residential treatment, an increasing number of states are using so-called “section 1115 waivers” to offer a full continuum of SUD care, including residential treatment.[5]

Increased Medicaid coverage has led to progress, but more needs to be done to take full advantage of Medicaid’s potential to help address the opioid epidemic. Because so few people with SUDs were covered by Medicaid prior to expansion, many SUD treatment providers didn’t participate in the program, relying instead on grant funding, fees, and donations.  These funding sources often fall short in addressing need — unlike Medicaid, which adjusts based on need and provides a stable source of funding for SUD treatment.  Moreover, using Medicaid to pay for treatment frees up grant funding to pay for other necessary supports such as housing and social services. Unfortunately, most state substance use agencies haven’t taken significant steps to help treatment providers overcome barriers to participating in Medicaid.[6]

Several House Medicaid Bills Would Improve Access to Care

While the House legislative package falls short of a comprehensive approach to the opioid epidemic, several of the bills could enhance SUD care in three ways: by improving Medicaid provider capacity, by broadening the scope of services that states cover in Medicaid and improving coordination of care for Medicaid enrollees with SUDs, and by reducing unnecessary gaps in Medicaid coverage.

Improving Provider Capacity

Many SUD treatment providers need help meeting the requirements to participate in Medicaid.  For example, providers new to Medicaid may need help launching information and electronic medical records systems as well as billing systems that avoid fraud. These systems would not only allow providers to participate in Medicaid but also enhance the quality of the services they provide.

One of the House bills would help a small group of states increase provider capacity by creating a five-year demonstration project to help state Medicaid programs increase SUD provider capacity by adding new providers and increasing the capacity of current providers.[7]  At least ten states would receive 18-month planning grants to assess current provider capacity, identify gaps in treatment, and develop strategies to increase provider capacity through recruitment, education, training, and technical assistance.  Up to five of those states would receive federal funds at an enhanced matching rate during the following 42 months for increases in SUD services over what the state provided in 2018.

Increasing Services and Care Coordination

While all state Medicaid programs cover some SUD services, states vary in the types and breadth of SUD services they cover.[8]  Three of the House bills would help ensure that people can get the specific treatment they need by:

  • Increasing access to medication-assisted treatment (MAT). MAT, which combines medication with therapy, is an underutilized, evidenced-based treatment for opioid use disorders.[9]  One of the House bills would require states to cover all forms of MAT for five years, with an exception for states lacking the provider capacity to carry out the requirement, as determined by the Secretary of Health and Human Services (HHS).[10]  While most states cover all types of MAT, not all do.[11]  The bill would ensure availability of all MAT drugs in all states.
  • Ensuring that the Children’s Health Insurance Program (CHIP) covers substance use treatment.  States currently don’t have to provide behavioral health services, including SUD treatment, in their CHIP programs, which in some states cover pregnant women as well as children.  One of the House bills would add mental health and substance use disorder care as categories of services that CHIP programs must cover.[12]
  • Supporting care coordination for people with SUDs.  Many people with SUDs also have physical or mental health conditions.  Getting appropriate physical or mental health care can be critical to their SUD recovery, and they often need help coordinating their health care needs.[13]  The ACA includes up to two years of enhanced federal Medicaid funding for states offering “health home” services aimed at providing effective, coordinated care to beneficiaries with chronic conditions or serious mental illness, including people with SUDs.[14]  Health home services include comprehensive care management, care coordination, support for transitions between different levels of care, and referrals to community and social services.  One of the House bills would provide states that have SUD health homes with an additional six months of enhanced matching funds for these programs.[15]

Reducing Unnecessary Coverage Gaps for Vulnerable Groups

Losing Medicaid coverage for even a brief period can interrupt treatment and jeopardize the recovery of people with SUDs who rely on Medicaid.  Gaps in coverage are especially dangerous for people at pivotal life junctures, such as youth aging out of the foster care system and people preparing to return to the community from jail or prison.  Lack of health coverage after leaving jail or prison can delay or prevent access to treatment in the community, jeopardizing recovery and the ability to remain out of jail or prison.[16]  Several of the House bills would help prevent unnecessary gaps in Medicaid coverage for these vulnerable populations:

  • Avoiding coverage gaps for youth who have aged out of foster care.  Adults previously in foster care have high rates of substance use disorder diagnoses.[17]  While the ACA allows youth who have aged out of foster care to keep their Medicaid coverage until they turn 26, this extension of coverage doesn’t apply if they move to a different state.  The bill would extend the guarantee of coverage to youth aging out of foster care when they move to a new state.[18]  
  • Maintaining continuity of coverage for youth under 21 who are involved in the criminal justice system.  When people enter jail or prison, many states terminate their Medicaid enrollment, meaning they must reapply once back in the community.  This often leads to gaps in coverage and delays in access to treatment.  One of the House bills would prohibit states from terminating Medicaid enrollment for youth under 21 who are incarcerated.  It would also require states to redetermine their eligibility prior to release so coverage is immediately available when they return to the community.[19] 
  • Identifying best practices to ensure continuity of coverage for people involved in the justice system.  People in jail and prison have high rates of SUDs, and adults, like youth, can have difficulty accessing critical SUD care after their release.[20]  One of the House bills would require the HHS Secretary to develop best practices to ensure smooth transitions of treatment between jail or prison and the community. [21]  It would also require HHS to issue guidance explaining how states can use section 1115 Medicaid demonstration waivers to improve care transitions for Medicaid beneficiaries reentering the community. 

IMD Bill Would Crowd Out Critical Investments in Community-Based Care

In contrast to bills that would take modest steps toward enhancing access to SUD treatment, one House proposal could crowd out other critical investments in community-based care.  It would partially repeal a longstanding policy — known as the Institutions for Mental Disease (IMD) exclusion — prohibiting the use of federal Medicaid funds for care of patients ages 21 to 64 receiving SUD treatment in facilities with more than 16 beds.[22]  Repealing or partially repealing the IMD exclusion risks doing more harm than good.[23]

The legislation would partially repeal the IMD exclusion for five years but would only allow states to use federal Medicaid funds to pay for care delivered to people with opioid use disorders (OUD) in IMDs; it wouldn’t allow them to use those funds to pay for residential treatment for Medicaid beneficiaries with other SUDs.[24]  Nor would it require states to increase investments in community-based services, which are badly needed in many states.  These services are important both to people not treated in residential facilities and to people who leave residential treatment and need community-based services to continue their treatment and recovery and get treatment quickly in the event of a relapse.

Guidance issued by the Obama and Trump Administrations provides an alternative, better approach to relaxing the IMD exclusion for SUD treatment, which makes repeal unnecessary and likely counterproductive.  The guidance allows states to obtain limited waivers from the exclusion if they also take steps to ensure that people with SUDs have access to other care they need, including preventive, treatment, and recovery services, all provided in accordance with evidence-based standards.[25]  Eleven states have SUD waivers, and 12 others have proposals pending; the Trump Administration has encouraged other states to apply.[26]

In contrast to the bill’s extremely limited approach, SUD waivers allow states to address the full range of SUDs, which vary by state and over time and by demographic group.  For example, alcohol-related deaths are much more common than opioid overdose deaths,[27] both nationally and in certain states such as Alaska, where the rate of alcohol-related mortality is more than double the national rate.[28]  Other states may have greater needs for services to treat people using cocaine and other substances in addition to opioids.  Likewise, among black men and women, the mortality rate between 2012 and 2015 was higher for cocaine overdoses than for opioid overdoses, a recent study found.[29]  (Opioid overdose deaths have been rising among all racial and ethnic groups,[30] but black men were 39 percent likelier to die from a cocaine overdose than an overdose of the opioid heroin.[31])  Limiting residential treatment to adults with opioid use disorders ignores the needs of people with other SUDs such as alcohol, cocaine, and methamphetamines, and it would have racially disparate effects.

The IMD bill is the costliest opioids-related bill under consideration by the House Energy & Commerce Committee.  It would cost the federal government almost $1 billion during the five years it would be in effect, and there would likely be pressure to extend the policy at additional cost. [32]

Rather than spending scarce resources on narrow legislation that wouldn’t help many people with SUDs or invest in community-based substance use treatment for those with opioid use disorders, Congress could pass legislation to direct the Administration to create a template SUD waiver.  That would streamline the process for submitting waivers while also helping expand access to needed community-based treatment.

Meanwhile, any resources available to enhance SUD treatment should go to further enhancements of care beyond the modest steps in the bills now before the House.  Any new funding that federal policymakers provide to address the opioid crisis should support a full continuum of services, rather than funding care in IMDs for which states can already receive federal funds through SUD waivers.


End Notes

[1] Hannah Katch, “Revised Bill Partially Repealing Medicaid Exclusion for Institutional Substance Use Treatment Falls Far Short,” Center on Budget and Policy Priorities, May 16, 2018,

[2] Matt Broaddus, Peggy Bailey, and Aviva Aron-Dine, “Medicaid Expansion Dramatically Increased Coverage for People with Opioid-Use Disorders, Latest Data Show,” Center on Budget and Policy Priorities, February 28, 2018,

[3] Foundation for a Healthy Kentucky, “Substance Use and the ACA in Kentucky,” December 2016,

[4] Center on Budget and Policy Priorities, “Essential Health Benefits Under Threat,”

[5] Anna Bailey, “West Virginia’s New Medicaid Waiver Promotes Medicaid Objectives,” Center on Budget and Policy Priorities, October 24, 2017,

[6] Christina Andrews et al., “Despite Resources From The ACA, Most States Do Little To Help Addiction Treatment Programs Implement Health Care Reform,” Health Affairs, Vol. 34:5, May 2015,

[7] Rural Development of Opioid Capacity Services Act, H.R. 5477, 115th Cong. (2018) as amended,

[8] Medicaid and CHIP Payment and Access Commission, “State Policies for Behavioral Health Services Covered Under the State Plan,” June 2016,; Kaiser Family Foundation, “Medicaid’s Role in Addressing the Opioid Epidemic,” February 27, 2018,

[9] Pew Charitable Trusts, “Medication Assisted Treatment Improves Outcomes for Patients with Opioid Use Disorder,” November 22, 2016,

[10] Medicaid Health HOME Act, H.R. 5810, 115th Cong. (2018) as amended, The requirement would extend from October 2020 through September 2025.

[11] Kaiser Family Foundation, “States Reporting Medicaid Coverage of Medication Assisted Treatment (MAT) Drugs,”,%22sort%22:%22asc%22%7D.

[12] CHIP Mental Health Parity Act, H.R. 3192, 115th Cong. (2018), May 17, 2018, as amended,; amendment at

[13] National Institute on Drug Abuse, “Common Comorbidities with Substance Use Disorders,” updated February 2018,

[14] Hannah Katch, “States Are Using Flexibility to Create Successful, Innovative Medicaid Programs,” Center on Budget and Policy Priorities, June 13, 2016,

[15] Medicaid Health HOME Act, H.R. 5810, 115th Cong. (2018),

[16] Jhamirah Howard et al., “The Importance of Medicaid Coverage for Criminal Justice Involved Individuals Reentering Their Communities,” Department of Health and human Services, Assistant Secretary for Planning and Evaluation, April 2016,

[17] Jordan M. Braciszewski and Robert L. Stout, “Substance Use Among Current and Former Foster Youth: A Systematic Review,” National Center for Biotechnology Information, December 1, 2012,

[18] Health Insurance for Former Foster Youth Act, H.R. 4998, 115th Cong. (2018), as amended,

[19] At-Risk Youth Medicaid Protection Act of 2017, H.R. 1925, 115th Cong. (2018),

[20] Department of Health and Human Services, Office of the Surgeon General, “Facing Addiction in America: The Surgeon General’s Report on Alcohol, Drugs, and Health,” November 2016,

[21] Medicaid Reentry Act, H.R. 4005, 115th Cong. (2018), as amended,

[22] IMD CARE Act, H.R. 5797, 115th Cong. (2018),

[23] Katch.

[24] For purposes of defining which individuals with opioid use disorders would have access to care in an IMD under the legislation, the bill defines “opioid prescription pain relievers” as including “fentanyl products.”  It doesn’t specify whether illicitly manufactured fentanyl — in contrast with prescription fentanyl — would be included.  Illicitly manufactured fentanyl is primarily responsible for the rapid increase in U.S. drug overdose deaths. See Centers for Disease Control and Prevention, “Deaths Involving Fentanyl, Fentanyl Analogs, and U-47700 — 10 States, July-December 2016,” November 3, 2017,

[25] Centers for Medicare & Medicaid Services, “Strategies to Address the Opioid Epidemic,” November 1, 2017,

[26] Paige Winfield Cunningham, “The Health 202: HHS chief pushes Trump opioid commission’s top recommendation,” Washington Post, March 2, 2018,

[27] German Lopez, “The Deadlier Drug Crises That We Don’t Consider Public Health Emergencies,” Vox, October 27, 2017,

[28] Alaska Department of Health and Social Services, “Health Indicator Report of Alcohol Consumption — Binge Drinking,” August 16, 2018,

[29] Austin Frakt, “Overshadowed by the Opioid Crisis: A Comeback by Cocaine,” New York Times, March 5, 2018,

[30] Marisa Peñaloza, “The Opioid Crisis Is Surging In Black, Urban Communities,” National Public Radio, March 8, 2018,

[31] Centers for Disease Control and Prevention, “Morbidity and Mortality Weekly Report,” March 30, 2018,

[32] Congressional Budget Office, Cost Estimate for Opioid Legislation, June 6, 2018,