Mental Health Practitioners NAICS 621330

Mar 10, 2025 - Congress Considers Medicaid Cuts

• The US Congress is considering plans to cut Medicaid to help pay for tax cuts, according to health policy organization KFF. A House of Representatives budget resolution targets $880 billion or more in potential reductions to federal Medicaid spending. Mental health practitioners are highly dependent on government programs and third-party insurers to pay for services. Public sources including Medicare, Medicaid, State Children's Health Insurance Program (SCHIP), and other federal and state programs are the main payers of behavioral health services, according to the US Department of Health and Human Services. Medicaid is the primary program providing comprehensive health and long-term care to one in five US residents and accounts for nearly $1 out of every $5 spent on health care.
• Medicare payments to Medicare Advantage plans are expected to increase an average of 3.7%, or over $16 billion in 2025, according to the Centers for Medicare & Medicaid Services. Medicare Advantage plans are required to cover all mental health and substance use disorder services covered under Medicare Parts A and B. The finalized the Calendar Year 2025 Rate Announcement for Medicare Advantage is projected to result in payments of between $500 and $600 billion in Medicare Advantage payments to private health plans in 2025.

• Private health insurers will be required to cover mental health care and addiction services the same as any other condition under a final rule released by the Biden administration. Most provisions in the rule will apply to group health plans and health insurance issuers for plan years starting January 1, 2025, or after. The Association for Behavioral Health and Wellness, the Blue Cross Blue Shield Association, and the ERISA Industry Committee, a major employer group, said the rule would have “unintended consequences” that could raise costs and jeopardize access to mental health care. Addressing the shortage of mental health providers is a top priority, the groups said, but “the final rule will complicate compliance so much that it will be impossible to operationalize, resulting in worse patient outcomes.”
• Mental health industry employment was unchanged while wages for nonsupervisory employees decreased moderately during the first month of 2025, according to the US Bureau of Labor Statistics. US mental health industry sales are forecast to grow at a 6.08% compounded annual rate from 2024 to 2028, faster than the growth of the overall economy, according to Inforum and the Interindustry Economic Research Fund, Inc.