NH Public Policy
New Hampshire Center for Public Policy Studies

Mental Health and Adults: Aging Will Drive the System

Executive Summary

Date: August 20th, 2008



Executive Summary

This paper is one of a series of reports commissioned by the Mental Health Commission to inform policy-makers about the status of adult mental health in New Hampshire. Nationally, approximately 26% of the population over the age of 18 has a mental health disorder.  If New Hampshire is consistent with the rest of the nation, this suggests that more than 250,000 adults in New Hampshire have a diagnosable mental health disorder and slightly more than 150,000 would have a mental illness that significantly affects their ability to engage in daily living.   Understanding who is using mental health services, what services are being provided, and what the service delivery system looks like is important to understanding what policies are necessary to ensure that the mental health system in New Hampshire is prepared for the future.  

Major Findings

One of the most important functions of the public Medicaid insurance system – as measured by total expenditures – is the provision of mental health services to vulnerable populations. Forty-four percent of all Medicaid enrolled adults accessed services for a mental illness in 2005 – at a cost of $162 million, which accounted for almost one-third of the total non-pharmacy Medicaid medical expenditures for adults.   Much of this care is designed to provide long term-care services to the severe and persistently mentally ill through community based care options, community mental health clinics, and – for those with Alzheimer’s disease– nursing homes throughout the state. 


The private insurance system plays a much smaller – and very different – role in the mental health service system. In total, in 2005, there were approximately $43 million in payments for mental health services provided to privately insured adults.  Moreover, whereas individuals in the public system are receiving services through multiple systems of care, the expenditures for the private system were predominately for office-based individual psychotherapy rather than long-term care services. It is clear that the population being served by the private system of insurance is very different from that being served via the Medicaid program.


From this analysis, it is clear that the aging of the population will have significant implications for the system of mental health services and both the state and county budgets. The elderly account for a surprisingly significant share of the Medicaid funded mental health services.   Over $100 million in mental health expenditures – or 38% of all Medicaid mental health expenditures – were provided to those over the age of 60. One third of these expenditures were for Alzheimer’s patients being served in a nursing home. As the population ages, how best to provide geriatric mental health services will be an increasingly important policy question. 


The state, insurers, and county governments will all need to develop strategies to manage the staffing, budgetary and systems implications of this aging population.   The population over the age of 65 is anticipated to doublein the next 20 years. Absent changes in the existing system, this trend will create severe competition for workforce and other resources, which currently supply care to children and others under the age of 65. The legislature, the Mental Health Commission, and the Department of Health and Human Services (DHHS) need to make a proactive effort to begin to coordinate the various systems of care, and design new systems for the future demographics of New Hampshire.


Report File