Medicare Financing for Mental Health Care

Prologue: Medicare, the federal health insurance program for the nation's thirty-one million elderly, spends just 3 percent of its budget on mental health. While new provisions in the federal budget reconciliations of 1987 and 1989 have liberalized the Medicare mental health benefit, “there is some fear that this small portion reflects an underuse of mental health services by Medicare beneficiaries,” write Judith Lave and Howard Goldman. They assert that increasing access to mental health services for the elderly and disabled is an important agenda item for federal health policymakers, despite the current budget pressures to control costs. In this essay, the authors offer several steps for broadening such access to mental health services. Lave is a professor of health economics at the University of Pittsburgh Graduate School of Public Health and holds a doctorate in economics from Harvard University. Prior to her current position, she has served on the faculty of Carnegie-Mellon University; has directed the Office of Economics and Quantitative Analysis, under the Deputy Assistant Secretary for Healthy Department of Health and Human Services; and has directed the Office of Research at the Health Care Financing Administration. Lave has engaged in joint projects, including this paper on Medicare mental health financing, with the Johns Hopkins University-University of Maryland Center on Organization and Financing of Care for the Severely Mentally Ill. Goldman is a professor of psychiatry at the University of Maryland School of Medicine and coprincipal investigator at the Johns Hopkins-University of Maryland center. He is also director of the national evaluation of the Robert Wood Johnson Foundation Program for the Chronically Mentally Ill. He holds a joint medical degree/master of public health degree from Harvard University, as well as a doctorate in social welfare research from the Heller Graduate School at Brandeis University. Goldman's career includes three years on the faculty at the University of California, San Francisco, and several stints at the National Institute of Mental Healthy including the position of assistant director.