Last week, amidst an unclear trajectory in Congress on repealing and replacing the Affordable Care Act (ACA), President Trump declared, “Nobody knew that health care could be so complicated.” He had just met with conservative governors, and the topic of health care was likely a key priority: the National Governors Association wrote to Trump on Jan. 24, less than a week after the inauguration, about the need to preserve health care for vulnerable populations, and the federal responsibility in doing so.

One of Trump’s main campaign promises was to repeal the ACA, and congressional Republicans, now in charge, are set to do that. But doing so is, as the president indicated, complicated. In fact, nobody has come up with a clear plan to replace the 5,000-plus pages of the ACA, crafted carefully with an aim to providing health insurance for everyone. Addiction treatment in particular was affected by the ACA, which required addiction treatment to be covered by all health plans as an essential benefit, and expanded coverage via marketplace plans and Medicaid expansion. This leaves addiction treatment providers unsure about what lies ahead.

“I wouldn’t say anybody is making any major changes right now,” said Becky Vaughn, consultant on treatment for the Addiction Policy Forum. “They’re just on pins and needles.”

Ironically, it’s the states that chose not to partake of Medicaid expansion who will be hurt the least by ACA repeal, if it happens, because they never reaped any of its benefits, Vaughn told ADAW last week. “The [Substance Abuse Prevention and Treatment] Block Grant is still secure,” she said. But in the states that did expand Medicaid, there is “anxiety,” because providers in these states have been able to see more patients.

“We’re working with Congress to make sure they understand that whatever they decide to replace the ACA with, people can still access addiction services,” said Vaughn. “Our big goal right now is funding.” The Comprehensive Addiction and Recovery Act (CARA) needs to be fully funded to be implemented, she said.

The vehicle for funding is the budget process, said Vaughn. When the White House releases its budget request, many hope that it will reflect President Trump’s stated claim that he wants to expand treatment for those who need it. One way to do this would be to increase the Substance Abuse Prevention and Treatment Block Grant, she said. But the funding wouldn’t only be in the Department of Health and Human Services. “There’s also talk of more money in the Bureau of Justice Assistance to increase treatment options for the criminal justice population,” said Vaughn. “There are a lot of ways to do it.”

ACA is still the law

“We have no idea how any of this is going to unfold,” said Chuck Ingoglia, senior vice president for public policy at the National Council for Behavioral Health. “When I talk to Medicaid directors, they tell me ‘the law is the law, and until the law changes, we’re just going to proceed with what we know.’” It’s hard for treatment providers to prepare for the unknown, said Ingoglia. “Hopefully I’m not being Pollyannaish, but it does seem Congress is having a hard time putting together a plan that is portable,” he said.

For example, on Feb. 24 a draft of a bill was released that days later everyone backed away from. “We heard the president say he doesn’t like it, and then we hear congressional leadership say that was an early draft and they’re farther along,” said Ingoglia. “I think the longer they struggle, the more it’s unclear what will happen. Obviously, if they have their way, they want to get rid of the essential health benefits.” But now, those benefits are the law, and Medicaid directors are not backing away from requiring them, said Ingoglia. “I don’t know how you plan for something that is so unclear,” he said.

Catastrophic plans

About 80 percent of the patients in Bradford Health Services, a private for-profit addiction treatment provider based in Alabama with programs in Tennessee, Arkansas, Florida and Alabama, are covered by health insurance, said Howard J. Bayless-Bonventre III, Bradford corporate director of development, in an interview last week. “The ACA established minimum benefits that every health plan had to provide, but a lot of the information that’s coming out of Washington right now will move us back to catastrophic plans,” he said. These plans have low premiums and high deductibles — they are not the ACA-type plans for which people under 30 can qualify for a “hardship exemption.” They are simply low-premium, low-coverage plans that people buy hoping that they won’t get sick. When they do, they have to pay — a lot more than they would have if they had bought full-coverage insurance. And since preventive care isn’t covered at all, they don’t get it. “We had this before,” said Bayless-Bonventre. “There were record numbers of bankruptcies for people who were left with medical bills they couldn’t afford.”

When people don’t have insurance, they tend to seek medical care in the emergency department, where “hospitals try to manage them and get them stabilized and out the door, or they end up in prison,” he said. “It’s disconcerting to hear that we’re going back to the old way that wasn’t working.”

Treatment providers will need to work with their insurance partners to navigate the future, said Bayless-Bonventre. “We’re hearing from our managed care partners that they’re also concerned,” he said. The problem with addiction treatment is that many people don’t realize that they need it or don’t want it. “People don’t wake up in the morning and say, ‘Oh, this is bad. I think I’ll go to treatment today,’” he said. “Their family or their job draws them in to look for options.” It’s easier to motivate people to get better when they have health insurance.

For most managed care companies, the ACA’s 10-percent cap on administration costs has been a deterrent, said Bayless-Bonventre. Most managed care companies want at least a 15-percent return — Medicare Advantage plans go to Congress every year to get that, he said. “Because so many plans have withdrawn, this has given fodder to those who say it isn’t working,” he said. In fact, however, the biggest utilization of health insurance is in the first five years of enrollment, he said. “We were getting to the end of that; we were seeing costs begin to decline and rates normalize,” he said.

Alabama did not opt for Medicaid expansion, so the $3 billion the state could have gotten for that went elsewhere. There is no demonstration project for Medicaid reform in the state. Bayless-Bonventre and other treatment providers had supported the state’s planned move to a regional care organization (RCO) system. “Because the Medicaid budget in Alabama is unruly, and we have no way to pay for it, we were hoping the RCO format would help,” he said. “But now, with the new administration, there are concerns that this won’t happen.”

Medicaid block grants

One factor that has nothing to do with ACA repeal is the introduction, by Congress, of the concept of Medicaid block grants — something that wasn’t even there before the ACA. Block grants are caps. Under Medicaid today, there is no cap — no matter how many people are eligible or how many people get sick, the Medicaid dollars will be there, making it an “entitlement.” While the ACA offered states the funding to expand Medicaid to people above the federal poverty level, and the single adults without children, a Medicaid block grant would sharply cut back on this coverage. “For the states that didn’t expand, anything they got would help them,” said Vaughn. These states may, for example, like the idea of the flexibility that comes with a block grant. “But in the states that did expand, a block grant would mean reduced funding,” she said.

But it’s hard to generalize, said Vaughn, who always notes that every state is different. In Oregon, for example, there is already a capitated system, so a block grant wouldn’t necessarily affect them. “They are already managing a fixed amount of money,” she said. “But in a state like New York that has done a fabulous job of making the best use of Medicaid expansion, there is a lot of concern.”

Going to Medicaid block grants — with the added “flexibility” for how the money is spent — could be deleterious to addiction treatment, said Bayless-Bonventre. “We’ve seen over the years that these are ways states either fund community-based programs they’re fond of, or they go into another politician’s pockets,” he said. “There have to be standards. You can’t peel government away from health. People should know all the aspects of an insurance plan.”

Private equity

The ACA, with its promise of insured patients and its requirement that all insurance cover addiction treatment, was also an allure to investors, who have invested in facilities. “What most people are worried about now is the idea that there won’t be an essential benefit that includes mandatory coverage for addiction treatment,” said Vaughn. But there are other opportunities, such as employers who need treatment for their workers, and are self-insured, she said. She noted that she was advising an investment group trying to decide on whether to open a 50-bed facility in Arizona, which would be entirely focused on insured patients. In this case, there was a fallback — a large employer that was self-insured needed such an option.

Bayless-Bonventre of Bradford said it’s too soon to see how investors will respond. “I don’t think we’re going to see a response until we see some actual plans in writing,” he said. “There was a jump when parity and the ACA passed — they saw growth opportunities in this area of health care that wasn’t adequate.”

Once there is an actual plan from Congress, he expects there to be an indication from investors on where they are heading on addiction treatment.

Criminal justice system

The two biggest pieces of the ACA for Treatment Alternatives for Safe Communities (TASC), which focuses on treating people with mental illness or substance use disorders (SUDs) in the criminal justice system, is Medicaid expansion and the requirement that addiction treatment be covered as an essential health benefit. “Being able to access mental health and substance use services as an alternative to incarceration, and as a way to avoid an arrest by getting treatment when they need it, is key,” said Maureen McDonnell, national director for health care initiatives at TASC, which is based in Chicago.

“We are trying to understand what the landscape might look like,” McDonnell told ADAW. “Our state, like others, has many waivers and contracting provisions that are already in place,” she said. “We are continuing to work on those while other changes take place. In the immediate short term, our clients still have coverage, and we’re going to take advantage of that.”

But there are great concerns that cutting treatment funding will just lead to more prison and jail terms for people with addictions. “When there’s a reduction in the amount of substance use and mental health care that’s available in the community, we see detention and incarceration go up,” said McDonnell. In 2009, when there was a 35 percent reduction in treatment services in Illinois due to the state’s budget, jails and prisons had increased numbers. “This is what happens, and we know this will be a likely outcome if treatment is cut,” said McDonnell. States and Congress have focused on bipartisan criminal justice reform over the last 10 years, she said. “Over the last five years, there has been an increase by local police departments and sheriffs in creating alternative pathways” by diverting people to treatment instead of arrest and incarceration, said McDonnell. “Dialing back on Medicaid expansion will reverse that,” she said.

Insurance viewpoint

The Association for Behavioral Health and Wellness (ABHW), the advocacy organization for managed behavioral health organizations — insurance companies that sell premiums to cover substance use disorders and mental illness — wants the gains of the ACA to continue. “It is hard to predict what the repair or replacement of the ACA will look like,” Pamela Greenberg, ABHW president and CEO, told ADAW last week. “Many gains have been made over the years for substance use disorder coverage — parity, inclusion in the essential health benefits and expanded Medicaid coverage, to name a few,” she said. “ABHW is advocating for the preservation of these gains in whatever legislation moves forward.”

Greenberg noted that many employers purchased insurance that covers SUDs and mental health before the ACA, and said she suspects that they will continue to do so even if it is repealed. “Understanding that substance use disorders are diseases like cancer and diabetes has increased over the years and the desire to stop the opioid epidemic and treat individuals with opioid addiction is a top priority for the nation,” she said. But the sticking point is Medicaid and the individual market — people who are not covered by employer health plans. “The real unknown is whether or not there will be enough funding in the Medicaid program for states to maintain the coverage for behavioral health disorders that they currently have and whether or not the individual market will be structured in a way that comprehensive health care benefits are affordable,” she said.


Whatever ACA reforms pass Congress, it’s important to make sure that parity implementations and compliance requirements in the Cures Act are implemented, as well as keeping mental health and substance use disorder treatment at parity as required under the Mental Health Parity and Addiction Equity Act, said Carol McDaid, principal with Capitol Decisions.

“I think we really all have to think about a multipronged approach,” said Bayless-Bonventre. “We have to push our elected officials to not forget that constituents need these services, to work with them to understand this need, a policy that supports all Americans.”

“The most important thing is to explain what ACA repeal would mean for patients, to help the policymakers understand how important Medicaid expansion is to access to treatment,” said Ingoglia. “We had all the focus last year on CARA and the opioid epidemic — the last thing we need is cutbacks.”

McConnell of TASC said there has been so much investment in taking advantage of the ACA, building substance use treatment systems. “Some plans are just getting under way, to broaden access,” she said. “This is a much bigger health issue” than just addiction, she said. “There’s a lot of advocacy going around this, over losing basic protections,” she said.

Bottom Line…

Repealing the ACA — something Trump and Congress have promised to do — could have devastating effects to treatment for substance use disorders, which saw many newly insured patients as a result of the law.