Medicaid's $370 Billion Behavioral Health Bill It Can't Fully Count
Summary
MACPAC's 2026 chapter finds Medicaid spent nearly $370 billion in 2023 on enrollees with behavioral health conditions -- more than half of all its service spending. Because drug claims carry no diagnosis codes, some payments aren't tied to individuals, and no federal definition of behavioral health services exists, even MACPAC's own analysts say the true total is understated.
MACPAC's March 2026 chapter⧉, its first claims-based behavioral health estimate since 2015, found 26.9 million of 97.6 million enrollees (27.6%) with a mental health or substance use diagnosis accounted for $369.2 billion of $642.3 billion in total service spending -- 57.5%. Of that, $201.0 billion⧉ went through managed care, $168.2 billion fee-for-service. Per-enrollee spending on this group ran $13,723⧉ -- 2.08x the $6,582 program average.
View data as table
| Managed care payments to providers | 201 | 54.4% of the total -- routed through capitated managed care plans, the largest slice |
|---|---|---|
| Fee-for-service payments to providers | 168.2 | 45.6% of the total -- paid directly to providers under fee-for-service |
View data as table
| Enrollees with any behavioral health condition | 13,723 | More than double the overall average |
|---|---|---|
| Overall Medicaid & M-CHIP population | 6,582 | The all-enrollee average |
The $369.2 billion is a floor. Prescription drug claims carry no diagnosis codes⧉, so behavioral health drugs fall out entirely -- $15.5 billion omitted for non-dual enrollees alone, against $79.8 billion counted. Lump-sum supplemental and state directed payments aren't tied to an individual or claim⧉, so they never enter the count, and there's no federal definition⧉ of what counts as a behavioral health service.
View data as table
| Behavioral health services (counted) | 79.8 | 16.1 million users -- captured because each claim carries a behavioral health diagnosis code |
|---|---|---|
| Behavioral health prescription drugs (excluded) | 15.5 | 14.3 million users -- structurally excluded because drug claims carry no diagnosis code to attribute them to behavioral health |
- Medicaid's own commission put a number on it, then listed why it's low. $369.2 billion in 2023 service spending on behavioral health enrollees -- and the exclusions are structural, not clerical.
- Drug claims and lump-sum payments both fall out of the count. Neither carries the diagnosis code or per-person tie the method needs -- fixing it takes a data-system change, not a recalculation.
- A quarter of enrollees, over half the spending. $13,723 per affected enrollee vs. $6,582 overall -- and no federal definition of what even counts as behavioral health.
Figures are MACPAC's analysis of 2021-2023 T-MSIS claims data for calendar year 2023. 'Service-related spending' is fee-for-service plus managed care encounter payments; it excludes behavioral health drugs and certain lump-sum payments.
Sources(2) ▾
- Medicaid and CHIP Payment and Access Commission (MACPAC), Chapter 2: Behavioral Health in Medicaid and the State Children's Health Insurance Program (Report to Congress on Medicaid and CHIP) (2026-03-01) — MACPAC's March 2026 chapter analyzing behavioral health service use and spending across Medicaid and Medicaid-expansion , built on 2021-2023 Transformed Medicaid Statistical Information System (T-MSIS) claims for calendar year 2023. Source of every load-bearing figure here: the $369.2B service-related spending on enrollees with behavioral health conditions (Tables 2-1 and 2-4), the 26.9 million / 97.6 million prevalence counts (Table 2-2), the $13,723 vs $6,582 per-enrollee figures (Table 2-3), the $79.8B / $15.5B service-vs-drug split (Table 2-8 and the exec summary), and the chapter's own Limitations passage (p. 35) plus the 'no federal, standardized definition' statement (p. 31). macpac.gov · original document
- Medicaid and CHIP Payment and Access Commission (MACPAC), Behavioral Health in Medicaid and the State Children's Health Insurance Program (publication landing page) (2026-07-01) — MACPAC's official publication page for the behavioral-health chapter, hosting the PDF and confirming it as a chapter of the March 2026 Report to Congress on Medicaid and . Corroborates the document's provenance and title; carries no independent figure. macpac.gov · original document
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Medicaid and spent nearly $370 billion⧉ in 2023 on enrollees with behavioral health conditions -- more than half its service spending, on about a quarter of enrollees. By its own analysts' account, that's still an undercount.