Skip to main content Skip to secondary navigation
Healthcare provider locking hands with patient

Recommendation 3b: Funding mechanisms that promote marginalized and unstable substance use disorders care services should be replaced with a core, enduring commitment within mainstream public and private financing mechanisms. This commitment should be advanced through public insurance programs as well as through the regulation of private insurance. 

Main content start

     Funding for OUD and other substance use disorders care should be expanded within the enduring financing mechanisms that support the rest of the health care system. There are several mechanisms for doing this in the USA. First, the public Medicaid insurance program has become an increasingly important part of substance use disorder treatment financing in those states that expanded Medicaid in some form under the provisions of the 2010 Affordable Care Act. Yet a number of states, including some with quite serious opioid-related problems, refused to expand Medicaid to cover more of the population. Those states would improve the care of OUD as well as related conditions (e.g., pain, depression) if they expanded Medicaid. Medicaid expansion has been linked to higher rates of substance use disorder treatment receipt and fewer overdose deaths.

     Second, the federal government should require coverage for the full continuum of substance use disorder care in Medicaid and Medicare, its two largest public health insurance programs. Despite improvements in coverage in recent years, many state Medicaid programs do not cover all of the substance use disorder treatment services considered essential by the American Society for Addiction Medicine. For example, Medicare and many state Medicaid programs do not cover residential treatment or recovery support services. State Medicaid programs that contract with managed care entities should explicitly stipulate the terms of coverage for substance use disorder care. Given that Medicaid is the largest payer of substance use disorder care in the USA, ensuring coverage for the full continuum of treatment in this program has the potential to improve access for as many as one million individuals with OUD.

     Third, qualified health plans need better guidance regarding what constitutes “coverage” for substance use disorder care as specified in the Essential Health Benefit. The Affordable Care Act and subsequent final rules issued by the Centers for Medicare and Medicaid Services give states substantial discretion to define the scope of substance use disorder care within their state benchmark minimum requirements for coverage, including for insurance plans operating within the state exchanges (“marketplace” plans). Consequently, some states required plans to cover the full continuum of substance use disorder treatment services and medications recommended by the American Society of Addiction Medicine, whereas others required coverage for only the most basic outpatient services. The Commission therefore recommends that states provide more specific guidance regarding what services and medications must be covered to ensure adequate access to substance use disorder care.

     Fourth, in their benefit design, most private insurance companies are now required by federal and state parity laws to not impose utilization management policies (e.g., prior authorization, quantity limits, cost sharing) on substance use disorder care that are more stringent that those applied to coverage of other medical and surgical services. Some insurers have not complied with the law, depriving individuals in need of care. Individual states have successfully brought suit against insurers who have violated parity, but routine oversight and enforcement should be systematic across all 50 states as well as the federal government. Within the USA’s profit-driven health care system, substance use disorder is one of the few conditions financed mainly by public sources, which reduces access to care and the presence of highly trained providers. Shepherding more private dollars into the system by enforcing the parity law should thus be a major priority.

     Mainstreaming the financing of substance use disorder care would have the added benefit of simultaneously imposing the workforce and regulatory standards of the rest of health care on substance use disorders providers. Reflecting its underfunding and segregation from the rest of health care, the substance use disorder treatment system suffers from extremely uneven quality of care. Low quality of care is bad for current patients and also reduces the willingness of payors to purchase services in the future, creating a reinforcing, negative cycle. Investment in services coupled with quality standards and related improvement efforts creates a reverse, positive cycle.