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School Study Finds that “Obamacare” Significantly Reduces Cost of Mental Health Care for Young Adults, Especially Minorities

May 19, 2016
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A study from the School of Business finds that the Affordable Care Act (ACA) has significantly reduced out-of-pocket costs for adults aged 19 to 25 seeking behavioral health care, most significantly among young adults from racial and ethnic minority groups. The research, published in the May issue of Psychiatric Services is the first to show the financial impact of “Obamacare” on young adults who access mental health and substance abuse treatment.

“Improved access to mental health care for people in this age group is critical given that they often have lower incomes, higher debt burden, and behavioral health issues often emerge at this age,” said Karoline Mortensen, associate professor of health sector management and policy at School, who conducted the research with University of Maryland School of Public Health researchers. “We also found young Latinos, African Americans and other racial and ethnic minorities saw the greatest reduction in out-of-pocket medical expenses related to behavioral health. Those in this group of Americans often experience higher unemployment rates and lower salaries and, therefore, are less likely to seek behavioral health services.”

The ACA allows young adults to remain on their family’s health plans until they turn 26.

The “dependent coverage provision” of the ACA has reduced the number of uninsured young adults by at least three million. Because of this, the expansion of health care access is also expected to increase the number of users of mental health and substance abuse treatment services. Because behavioral health conditions often emerge for the first time during the 19 to 25 year age range, and because this age group has a higher rate of serious mental illness than other adults, improving affordable access to care could make a significant contribution to improving the mental health of this group of Americans, including reducing their share of medical debt.


The researchers analyzed nationally representative data from the Medical Expenditure Panel Survey from 2008-2009 (before the ACA implementation) and 2011-2012 (after the ACA implementation) to estimate the impact of the dependent coverage expansion. Out-of-pocket spending was examined as a share of total health care spending among young adults with behavioral health needs. The young adults who benefited from dependent coverage on behavioral health were approximately 45 percent less likely to encounter catastrophic health expenses (i.e., 75 percent out-of-pocket share of health care costs) under the ACA’s dependent coverage expansion.

To view the full paper, visit: http://ps.psychiatryonline.org/doi/10.1176/appi.ps.201500346

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