Public Insurance and Psychotropic Prescription Medications for Mental Illness

Johanna Catherine Maclean, Benjamin L. Cook, Nicholas Carson, Michael F. Pesko

NBER Working Paper No. 23760
Issued in August 2017
NBER Program(s):   AG   HC   HE

Mental illnesses are prevalent in the United States and globally, and cost is a critical barrier to treatment receipt for many afflicted individuals. Affordable insurance coverage can permit access to effective healthcare services and treatment of mental illnesses. We study the effects of recent and major eligibility expansions within Medicaid, a pubic insurance system in the U.S. that finances healthcare services for the poor, on psychotropic medications prescribed in outpatient settings. To this end, we estimate differences-in-differences models using administrative data on medications prescribed in outpatient settings for which Medicaid was a third-party payer between 2011 and 2016. Our findings suggest that these expansions increased psychotropic prescriptions by 22% with substantial heterogeneity across psychotropic class and state characteristics that proxy for patient need, expansion scope, and system capacity. We provide further evidence that Medicaid, and not patients, primarily financed these prescriptions. These findings suggest that public insurance expansions have the potential to improve access to evidence-based treatments among low-income populations suffering from mental illnesses.

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Document Object Identifier (DOI): 10.3386/w23760

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