The Impact of Substance Abuse Treatment Funding Reductions on Health Care Costs for Disabled Medicaid Adults in Washington State

Apr 2013 |
Online Library

The past decade has seen major changes in the level of funding for substance abuse treatment in Washington State. The five-year period from State Fiscal Year (SFY) 2005 to SFY 2009 saw a major expansion of substance abuse treatment funding for adults enrolled in Medicaid and the program formerly known as General Assistance. This period of expansion has been followed by two biennia of reduced funding for substance abuse treatment. This study examines the impact of these substance abuse treatment funding reductions on medical and nursing facility costs for adults enrolled in disability-related Medicaid coverage in Washington State. We found that increased access to substance abuse treatment in the “expansion era” coincided with a significant reduction in rates of growth in medical and long-term care costs for Disabled Medicaid clients with substance use problems. Conversely, the substance abuse treatment funding contraction that began in late SFY 2009 caused a decline in access to treatment for Disabled Medicaid clients, which coincided with significant relative increases in rates of growth of medical and nursing facility costs for Disabled Medicaid clients with substance abuse problems. These findings demonstrate the importance of access to substance abuse treatment as a strategy for containing medical and long-term care cost growth for persons enrolled in disability-related Medicaid coverage, and point to the need for financing mechanisms that support this strategy.

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