The Obama administration is not giving up on its goal to expand Medicaid services in all 50 states. Its latest ploy: Convince the mostly Republican governors of those states that expansion will save billions in downstream treatment for substance abusers.

The U.S. Department of Health and Human Services unveiled a report Monday stating that nearly 2 million uninsured people in the 20 non-expansion states suffer from mental illness or substance abuse. That’s nearly a third of the uninsured low-income residents of those states. And these states’ refusal to expand Medicaid as permitted under the Patient Protection and Affordable Care Act (PPACA) will leave 4 million people uninsured this year.

“While some of these individuals had access to some source of health insurance in 2014, many will gain access to coverage only if their states expand Medicaid, and others would gain access to more affordable coverage,” the report stated.

Under Medicaid, people with mental health and substance abuse challenges tend to get treatment. Without it, they don’t, the report said.

“Medicaid expansion could dramatically improve access to treatment for people with mental and substance use disorders, thereby improving health outcomes,” HHS said. “Research shows that low-income adults with serious mental illness are significantly more likely to receive treatment if they have access to Medicaid coverage, with benefits for their health. If all states expanded Medicaid, an estimated 371,000 fewer people each year would experience depression, and 540,000 more people would report being in good or excellent health.”

Medicaid expansion has already reduced state spending on treatment for the uninsured, by as much as $190 million in one instance 2015. And there are less quantifiable ancillary benefits, HHS argued.

“States can also expect to have a more productive workforce, because expanding treatment will permit a reduction in adverse workforce outcomes stemming from mental and substance use disorders,” the report said.

“Research shows that depressed employees incur significantly more disability days than do otherwise similar employees, and substance use disorder treatment was associated with $5,366 annually in employer savings from reduced absenteeism alone.”

Whether this new approach will sway GOP governors remains to be seen. Most have taken a hard line against expanding Medicaid on grounds that, over time, it will lead to much greater spending on healthcare for the states as federal support diminishes.

Instant Insights /

HHS report: Medicaid expansion saves on mental health treatment

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