Why Medicaid Matters for Children's Mental Health

Together, Medicaid and CHIP provide health care coverage for nearly 37 million children and teens, making Medicaid the largest payor for mental and behavioral health services.

It has never been more important than it is today. More teens are experiencing depression than ever before, and suicide is now the second leading cause of death for youth ages 10–24.

In 2021, the Children’s Hospital Association (CHA), along with the American Academy of Pediatrics and the American Academy of Child and Adolescent Psychiatry, declared a national state of emergency in children’s mental health.

“We haven't rescinded that emergency because there has not been sufficient response and investment at the federal or state levels,” said Cynthia Whitney, director of federal affairs at CHA. “This emergency is ongoing and more urgent than ever.”

Reductions in Medicaid funding under consideration at the federal level will impact how states implement the program and have an outsized impact on pediatric mental health providers, including children’s hospitals. Since reimbursement rates for children’s mental and behavioral health services are already low, any funding reductions to Medicaid pose a significant, imminent risk to access to care.

Already, 61% of adolescents with a current diagnosis who need mental health treatment or counseling have difficulty getting it. In 2023, 56% of youth with major depression did not receive any mental health treatment.

Proposed changes to the program would further reduce access to vital mental and behavioral health services for the children and teens covered by Medicaid/CHIP, worsening the state of crisis already faced by America’s youth.

Medicaid and children’s mental health

Medicaid provides access to care through a unique federal requirement known as Early and Periodic Screening, Diagnostic and Treatment (EPSDT). This benefit ensures every Medicaid beneficiary under 21 receives regular mental health screenings and that states must cover all medically necessary mental health services.

Kids with Medicaid coverage have access to these services in places like pediatrician’s offices, community mental health centers, federally qualified health centers, and school-based health centers, increasing the likelihood of early intervention and better outcomes.

“These program benefits help kids get timely access to mental health care,” said Heidi Baskfield, CHA’s vice president of mental health and executive director of Speak Our Minds.  “And they are not mandated by private insurance like they are by Medicaid.”

Approximately 2,925 school-based health centers nationwide provide mental health care directly within schools, such as counseling, crisis intervention, and therapy. Medicaid is increasingly playing a role in financing school-based providers and health centers, which is especially effective for facilitating access to mental health care.

“Cuts to Medicaid risk rolling back progress in expanding vital school-based services, which will mean reduced early intervention in schools,” said Whitney. “Less early intervention translates to more kids in crisis.”

Medicaid also supports high-quality mental health care by requiring states to publicly report behavioral health quality measures, providing a nationwide, mandatory dashboard for tracking youth mental health access and outcomes.

“Medicaid supports critical mental health services for children in this country,” Baskfield said. “We should be working to improve it, not erode it.”