Study Shows ACA Medicaid Expansion Increased Access to Substance Use Services: Medicaid expansion particularly important in face of opioid crisis

November 28, 2017 | Press Releases

Doctors walking down a hallwayA study released by the Center for Healthcare Research & Transformation (CHRT) shows that the ACA Medicaid expansion provided additional support to people who need substance use services—an increasing number of people in light of the opioid crisis.

The study examined the impact of the ACA Medicaid expansion on public mental health and substance use services in three demographically-similar Midwestern states: Michigan and Indiana, both expansion states, and Wisconsin, a non-expansion state.

The study suggests that the Medicaid expansion has had an overall beneficial effect for the substance use population including those with opioid addiction. The Medicaid expansions have brought opportunities for coverage for needed mental health and substance abuse service but also introduced challenges in reduced flexibility of funding.

To date, 32 states have expanded Medicaid including the District of Columbia. Maine is poised to become the 33rd Medicaid expansion state, after Maine voters approved a referendum on the November 2017 ballot.

“The Medicaid expansion in Michigan and Indiana provided significantly increased funding for substance use services,” says Marianne Udow-Phillips, director of CHRT. “The Medicaid expansion is a net positive: in addition to the overall expanded coverage that resulted from the Medicaid expansion, there were more total resources available for substance use treatment.”

Data show that in 2015, 1 in 6 U.S. adults (about 18%) had some type of mental illness and 7% needed substance use services. Those with Medicaid coverage have a higher prevalence of mental health or substance abuse (38%) than low-income, privately-insured individuals (19%). A recent Council of Economic Advisors analysis estimated that the economic cost of the opioid crisis alone—a subset of all substance use disorder-related costs—was $504 billion in 2015.

All states receive federal block grant funding for substance use services. When states such as Michigan and Indiana expanded Medicaid, the Medicaid funding was additive to the substance use block grant funding. Medicaid resulted in more net resources in expansion states for additional substance use resources, such as recovery housing and other supportive services that state and local areas previously struggled to support.

“These funding changes have both state and federal implications. If the Medicaid expansion is scaled back as some reform proposals in Congress have proposed, it will be enormously challenging for states to find the funds to care for those with mental health and addiction issues,” says Udow-Phillips. “These are serious health issues that cannot be ignored.”

Wisconsin, a non-expansion state, did make some improvements in Medicaid eligibility, though not as extensive as expansion states. Wisconsin reported a 6% increase in Medicaid and Children’s Health Insurance Program (CHIP) enrollment from 2013 to 2015. Over this same period of time, enrollment increased by 22% in Michigan and by 34% in Indiana during this same period.

“As coverage shifted from state-funded mental health services to Medicaid-covered services, there were some challenges for states that expanded Medicaid,” explains Udow-Phillips. “Medicaid dollars are less flexible than state and so some services previously funded lost support. But the net benefits for substance use treatment and overall expanded coverage are quite significant.”

Other highlights of CHRT’s issue brief, The Impact of the ACA on Community Mental Health and Substance Abuse Services: Experience in 3 Great Lakes States, show that:

  • Medicaid coverage may be particularly important for individuals with serious mental illness and emotional disorders as it pays for services that can lead to improved mental health, such as case management and wraparound services.
  • In Michigan, 14% more people received substance use services in 2016 after the Medicaid expansion than in 2012. Residential admissions increased nearly 40%.
  • State leaders interviewed in the three-state study reported enhancements to substance use treatment, and reductions in historically long wait times for services.

CHRT’s Issue Brief, The Impact of the ACA on Community Mental Health and Substance Abuse Services: Experience in 3 Great Lakes States, was developed with support from the Commonwealth Fund.


The Center for Healthcare Research & Transformation (CHRT) at the University of Michigan is an independent 501(c)(3) impact organization with a mission to advance evidence-based care delivery, improve population health and expand access to care.