Mental Health in Medicare


At least one in five older Americans has a mental disorder. Among Medicare beneficiaries age 65 and older, the most common disorders are anxiety, dementia or other cognitive impairment, and depression. By 2030, the number of older people with such disorders is expected to double, totaling 15 million. Based on this increase and the large and growing percentage of older adults who misuse illicit drugs, alcohol, and prescription drugs, demand for mental health and substance abuse services is also expected to grow with the aging of the baby-boom cohort. This cohort uses such services more frequently than older cohorts, in part because they feel less stigmatized for seeking care. The anticipated increase in demand for such services may be difficult to meet because older adults currently have a large unmet need for them.

A 2006 report by the Institute of Medicine, Improving the Quality of Health Care for Mental and Substance-Use Conditions, found that mental disorders seldom occur in isolation. For example, about one-fifth of patients hospitalized for heart attacks suffer from major depression.

Older adults who need mental health services are more likely than younger adults to receive inappropriate or inadequate treatment because primary care physicians—who provide most mental health care under Medicare—have insufficient training in the assessment and treatment of mental disorders associated with aging. Although geriatric mental health assessment tools exist, their use is not often part of routine practice and cognitive disorders are frequently not diagnosed or misdiagnosed in older patients.

Many older people are also reluctant to seek counseling to help them cope with the challenges of later life such as bereavement, disability, loneliness, and isolation, which may explain why older Americans are disproportionately likely to die by suicide. Reticence by older adults to acknowledge mental health problems, in part because of perceived social stigma, is another factor impeding accurate diagnosis and treatment.

While Medicare’s coverage of mental health and substance abuse services has improved over the years, restrictions that do not apply to other health services remain. For example, the program has a lifetime limit of 190 days for psychiatric care in freestanding psychiatric hospitals. Despite growing evidence supporting the effectiveness of multi-disciplinary, community-based geriatric mental health treatment teams (e.g., including physicians, social workers, nurses, psychologists, and pharmacists), Medicare limits access to this type of care because of the program’s institutional bias regarding mental health coverage.

Medicare covers medically necessary services provided by psychiatrists, clinical psychologists, social workers, psychiatric nurse specialists, nurse practitioners, and physicians’ assistants. It does not cover treatment by licensed professional counselors. For beneficiaries in rural areas, Medicare will pay only for mental health services delivered via telehealth (video conference) to an approved location by a qualified mental health professional.

The ACA made small but important improvements to Medicare’s mental health service coverage. For example, Medicare Part D will now cover barbiturates and benzodiazepines, which were originally excluded from Part D coverage.

The ACA also eliminated cost-sharing for certain Medicare-covered preventive services and authorized CMS to add coverage of additional preventive services through the National Coverage Determination process. Since then CMS has approved two new mental health-related preventive services with no cost-sharing: an annual depression screening and an annual alcohol-misuse screening. For those who screen positive, Medicare will cover four brief, face-to-face behavioral counseling interventions per year. (For a broader discussion of mental health issues, see this chapter’s section on Specific Needs and Services—Mental Health.)

Mental Health in Medicare: Policy


In this policy: Federal

Medicare should reimburse for mental health and substance abuse services more adequately and should eliminate the 190-day lifetime limit on inpatient psychiatric care in freestanding psychiatric hospitals under Part A.

Medicare should expand the list of mental health professionals who can be reimbursed under Medicare to cover all providers who are fully licensed by their state for independent practice.

Medicare should expand its coverage of outpatient services that have been shown to help individuals with mental illnesses remain in the community.