Original Research

Medicaid Expansion and Veterans’ Reliance on the VA for Depression Care

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Background: In 2001, before the Affordable Care Act (ACA), some states expanded Medicaid coverage to include an array of mental health services, changing veterans’ reliance on US Department of Veterans Affairs (VA) services.

Methods: Using Medicaid and VA administrative data from 1999 to 2006, we used a difference-in-difference design to calculate shifts in veterans’ reliance on the VA for depression care in New York and Arizona after the 2 states expanded Medicaid coverage to adults in 2001. Demographically matched, neighbor states Pennsylvania and New Mexico/Nevada were used as paired comparisons, respectively. Fractional logit was used to capture the distribution of inpatient and outpatient depression care utilization between the VA and Medicaid, while ordered logit and negative binomial regressions were applied to model Medicaid-VA dual users and per capita utilization of total depression care services, respectively.

Results: Medicaid expansion was associated with a 9.50 percentage point (pp) decrease (95% CI, -14.61 to -4.38) in reliance on the VA for inpatient depression care among service-connected veterans and a 13.37 pp decrease (95% CI, -21.12 to -5.61) among income-eligible veterans. For outpatient depression care, VA reliance decreased by 2.19 pp (95% CI, -3.46 to -0.93) among income-eligible veterans. Changes among service-connected veterans were nonsignificant (-0.60 pp; 95% CI, -1.40 to 0.21).

Conclusions: After Medicaid expansion, veterans shifted depression care away from the VA, with effects varying by health care setting, income- vs service-related eligibility, and state of residence. Issues of overall cost, care coordination, and clinical outcomes deserve further study in the ACA era of Medicaid expansions.



The US Department of Veterans Affairs (VA) is the largest integrated health care system in the United States, providing care for more than 9 million veterans.1 With veterans experiencing mental health conditions like posttraumatic stress disorder (PTSD), substance use disorders, and other serious mental illnesses (SMI) at higher rates compared with the general population, the VA plays an important role in the provision of mental health services.2-5 Since the implementation of its Mental Health Strategic Plan in 2004, the VA has overseen the development of a wide array of mental health programs geared toward the complex needs of veterans. Research has demonstrated VA care outperforming Medicaid-reimbursed services in terms of the percentage of veterans filling antidepressants for at least 12 weeks after initiation of treatment for major depressive disorder (MDD), as well as posthospitalization follow-up.6

Eligible veterans enrolled in the VA often also seek non-VA care. Medicaid covers nearly 10% of all nonelderly veterans, and of these veterans, 39% rely solely on Medicaid for health care access.7 Today, Medicaid is the largest payer for mental health services in the US, providing coverage for approximately 27% of Americans who have SMI and helping fulfill unmet mental health needs.8,9 Understanding which of these systems veterans choose to use, and under which circumstances, is essential in guiding the allocation of limited health care resources.10

Beyond Medicaid, alternatives to VA care may include TRICARE, Medicare, Indian Health Services, and employer-based or self-purchased private insurance. While these options potentially increase convenience, choice, and access to health care practitioners (HCPs) and services not available at local VA systems, cross-system utilization with poor integration may cause care coordination and continuity problems, such as medication mismanagement and opioid overdose, unnecessary duplicate utilization, and possible increased mortality.11-15 As recent national legislative changes, such as the Patient Protection and Affordable Care Act (ACA), Veterans Access, Choice and Accountability Act, and the VA MISSION Act, continue to shift the health care landscape for veterans, questions surrounding how veterans are changing their health care use become significant.16,17

Here, we approach the impacts of Medicaid expansion on veterans’ reliance on the VA for mental health services with a unique lens. We leverage a difference-in-difference design to study 2 historical Medicaid expansions in Arizona (AZ) and New York (NY), which extended eligibility to childless adults in 2001. Prior Medicaid dual-eligible mental health research investigated reliance shifts during the immediate postenrollment year in a subset of veterans newly enrolled in Medicaid.18 However, this study took place in a period of relative policy stability. In contrast, we investigate the potential effects of a broad policy shift by analyzing state-level changes in veterans’ reliance over 6 years after a statewide Medicaid expansion. We match expansion states with demographically similar nonexpansion states to account for unobserved trends and confounding effects. Prior studies have used this method to evaluate post-Medicaid expansion mortality changes and changes in veteran dual enrollment and hospitalizations.10,19 While a study of ACA Medicaid expansion states would be ideal, Medicaid data from most states were only available through 2014 at the time of this analysis. Our study offers a quasi-experimental framework leveraging longitudinal data that can be applied as more post-ACA data become available.

Given the rising incidence of suicide among veterans, understanding care-seeking behaviors for depression among veterans is important as it is the most common psychiatric condition found in those who died by suicide.20,21 Furthermore, depression may be useful as a clinical proxy for mental health policy impacts, given that the Patient Health Questionnaire-9 (PHQ-9) screening tool is well validated and increasingly research accessible, and it is a chronic condition responsive to both well-managed pharmacologic treatment and psychotherapeutic interventions.22,23

In this study, we quantify the change in care-seeking behavior for depression among veterans after Medicaid expansion, using a quasi-experimental design. We hypothesize that new access to Medicaid would be associated with a shift away from using VA services for depression. Given the income-dependent eligibility requirements of Medicaid, we also hypothesize that veterans who qualified for VA coverage due to low income, determined by a regional means test (Priority group 5, “income-eligible”), would be more likely to shift care compared with those whose serviced-connected conditions related to their military service (Priority groups 1-4, “service-connected”) provide VA access.


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