Medicaid is one of the largest spenders on mental health care for young adults and children. The Medicaid and CHIP program combined provides coverage to 45-million children, under age 18, in the United States (Statistical Enrollment Data System, 2017). More than 90% of this population participates in a Medicaid-managed Care plan (MACPAC, 2016). Among these enrollees, 11% of the children and adolescents, approximately 5 million, have received behavioral healthcare services in the past year (, 2015).

This means that Medicaid pays for at least 5 million children and adolescents’ mental health care, making Medicaid the entity that pays the most for mental health care. The amount being spent is also increasing. Between 2020 and 2021, the number of people enrolled in Medicaid increased by 14%, about 9.9 million people. Medicaid now serves more than 80 million consumers (HHS, 2021).

This system of care has two primary challenges that account for disparities in mental health treatment outcomes. The clinical workforce is the least experienced, impacting the system’s ability to adopt the best practices in clinical care and technologies that benefitted the private health plan sector. Also, the patient population in this system of care is most severe, partly due to trauma and Social Determinants of Health, driven by persistent poverty that has an enormous impact on the person’s physiology and psychology.

This sector is ripe for innovation; the market size and the opportunity are attractive. Despite this opportunity, it has attracted limited startups and VC investments, partly due to the system’s resistance to change. Workforce issues have also negatively impacted innovation in the sector; the care providers are the least trained and struggle to adopt best practices and empirically supported treatments. It is difficult to find another sector of the healthcare system that invests $250 Billion a year to treat 5 million kids from low-income communities without demanding evidence of a return on this investment. The private health plan spends 1/3rd of the investment per child per year.

Untreated or poorly treated mental health issues for youth from low-income communities has a devastating impact on the person’s ability to become a productive member of society. High-risk behavior, including contact with the criminal justice system, substance use disorder, poor health outcomes, and disability, could be traced back to a history of generational trauma. Aggressive interventions, including technology, can make a massive difference in the quality and the cost of treatment. The following blog will address how technology can play a significant difference in improving the quality of treatment.

Further Readings
New Medicaid & CHIP Enrollment Snapshot Shows Almost 10 Million Americans Enrolled In Coverage During The COVID-19 Public Health Emergency