Mental disorders and service use among welfare and disability program participants in fee-for-service Medicaid

In recent years, welfare caseloads have declined dramatically, leaving on the rolls recipients with mental disorders or other challenges that may affect their ability to work. This study identified Temporary Assistance for Needy Families (TANF) recipients (that is, welfare recipients) who use mental health services, compared them with Supplemental Security Income (SSI) recipients, and estimated the number of TANF recipients who might qualify for SSI.

Based on data from the 2003 Medicaid Analytic eXtract (MAX) files from four states, this analysis included female Medicaid beneficiaries aged 19 to 64 in fee-for-service payment systems receiving SSI (N=65,303) or TANF (N=22,691).

Thirteen percent of TANF beneficiaries and 32% of SSI beneficiaries with Medicaid claims had a mental disorder. Common disorders among TANF beneficiaries included neurotic and other depressive disorders and major depression and affective psychoses. Eleven percent of TANF recipients had levels of service use comparable with those of SSI recipients.

The proportion of TANF recipients using mental health services was lower than the proportion of TANF recipients identified through surveys as having a mental disorder, most likely because some TANF recipients had mental disorders that were undiagnosed and untreated. Among those using services, some had patterns of use indicating potential eligibility for SSI, but most appeared to have more modest limitations.