More Iowa youth need mental health care. Has spending kept up?

After the siblings, whom Preston adopted from foster care, moved from a small southern Iowa town into her Des Moines home, the 41-year-old took off two weeks from work to settle them into their new lives. She booked all of their appointments, including with therapists and other mental health providers.

It took the entire two weeks, calling every day, to find every behavioral health service they needed, she said. But even then, she ran into long waitlists in Des Moines, meaning she had to drive the pair every week to Pella for their appointments in the first few months. 

“It can literally be a full-time job trying to find the right services,” Preston said.

Her experience highlights what she often deals with caring for her five boys, all of whom were adopted from foster care and have behavioral health needs. Services can be few and far between, especially for her sons, who rely on Medicaid for their coverage.

“It is very emotionally and mentally taxing,” Preston said. “You spend all day trying to get them the right resources and at the end of the day, if it ends up not being the right resource because the therapist doesn’t work or something like that, then you feel like you’re letting your kids down.”

The Prestons are among a chorus of families from across Iowa who say they have struggled, in some cases for years, to find appropriate mental health care for their children. Many have hit roadblock after roadblock on their journeys, leading to a growing crisis in their households as their children become more violent or suicidal. 

That crisis is punctuated by a 2024 Mental Health America report that found that half of youth in Iowa with major depression received no mental health treatment in the past year.

“There’s not enough therapists, there’s not enough beds, there’s not enough services,” Preston said.

State data obtained by the Des Moines Register shows more and more young Iowans have sought out youth mental health and substance use disorder treatments between state fiscal years 2018 and 2023, particularly after the COVID-19 pandemic upended normal routines and forced many into isolation.

Yet even as demand has grown, the data shows that overall state and federal spending for youth mental health and substance use disorder services has fallen below pre-pandemic levels.

This disconnect comes as Iowa wrestles with a growing chorus of need from families.

Many experts in the state have blamed Iowa’s historically disjointed system that lacks a clear pathway for finding youth services. They say that it is the result, in part, of the state’s lack of investment into the system.

Providers continue to emphasize the need for increased funding even as the state undertakes a major overhaul of Iowa’s behavioral health system. State leaders say this effort will ultimately help address these gaps in care, but so far, they say the plan is to use existing funding more efficiently. 

“This is a big system change, but what I am feeling really confident about and what I want others to continue to trust in this process is that we’re not losing any money,” said Marissa Eyanson, behavioral health division director for the Iowa Department of Health and Human Services. “This isn’t a cost-cutting endeavor. This is a reinvestment into the spaces that we need to focus.”

As the state’s effort is underway, here’s what demand for and spending on youth mental health has been in recent years.

More: A 6-year-old tried to hang himself before he got help. This is Iowa’s mental health crisis

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Need for behavioral health services rose in recent years, especially after pandemic

As of state fiscal year 2023, more than 63,000 youth received behavioral health services in the state of Iowa. That compares with nearly 55,000 youth in 2018, a roughly 15% increase in six years, according to data from Iowa’s health and human services agency.

Iowa saw a steep drop in the use of behavioral health services, falling to about 56,700 individuals in 2021 during the pandemic. 

But by 2022, demand had spiked to pre-pandemic levels encompassing about 63,000 youth.

State officials believe some may have waited to seek care during the pandemic, exacerbating children’s already serious and complex behavioral health issues. 

But even as Iowa has returned to normal operations following the COVID-19 outbreak, the state and federal money spent on those services remains at or below totals reported before the pandemic. 

State data shows total expenditures on behavioral health services for 2018 and 2019 were $148.5 million and $153 million, respectively — with a significant dip during the pandemic, reaching $108 million in 2022.

By 2023, total expenditures had reached about $142 million — just below 2018 spending.

State officials told the Register the drop in costs is a result of more youth receiving services that cost less to provide, such as outpatient therapy. They believe more youth are able to access outpatient care since the coronavirus pandemic.

The state also pointed out the data does not include information from private insurance or other health care coverage. In many cases, Medicaid could be acting as a secondary coverage provider, and the data would not reflect that the total cost is covered by another insurer.

When including safety net services funded through Iowa’s mental health and disability regions and federal block grant dollars, spending has nearly doubled from $6.6 million in 2018 to $12.2 million in 2023.

The regions are required to fund services for children, and the spike in utilization was likely due to expansions in crisis services for youth statewide, state officials said.

Iowa reports increase in most seriously ill children

Iowa saw an increase in the number of youth receiving services through one of the state-run mental health institutes, which is among the highest levels of care that can be provided to youth. There are 36 in-patient psychiatric beds for children and adolescents at Independence Mental Health Institution in eastern Iowa.

Per state data, total patient counts rose from 94 in 2018 to 116 in 2023, a 23% increase. Those counts peaked in 2022 at 139 youth.

State and federal spending for this level of care also rose during this same time period, from $4.1 million to $5.8 million by 2023.

Eyanson said the increase likely is driven by the higher severity of mental health conditions state officials have seen in Iowa’s youth in recent years. 

“That’s a last stop,” Eyanson said of the mental health institutes. “It means that everybody else in the state of Iowa said they couldn’t look after that child for some reason. … And that’s a telling number.”

Medicaid spending on behavioral health services remains below pre-pandemic levels

Medicaid spending makes up the majority of publicly funded behavioral health expenditures, covering services from therapy and medication to long-term intensive care for children with significant mental health conditions, according to HHS. 

Of the more than 63,000 total youth receiving behavioral health services in 2023, about 61,600 were funded through Medicaid. 

However, HHS data shows Medicaid spending on these services has decreased in recent years. Including state and federal funding sources, total Medicaid funding was about $125 million in 2018. By 2023, that had dropped to about $111 million.

State Medicaid funding for behavioral health services for children was nearly $49 million in 2018, and had decreased to about $34 million by 2023.

However, Medicaid enrollment remained steady during the pandemic. Iowa HHS Director Kelly Garcia said the state maintained its enrollment counts because individuals kept their Medicaid coverage, but fear of the virus kept many youth and families from seeking services in 2020 and 2021.

“We saw, for all waivers during the pandemic, a lot of zero utilizers,” Garcia said. “People were scared and so just utilization dropped generally across the program.”

Unlike other areas, demand for and spending on services offered under a Medicaid program called the children’s mental health waiver increased during the pandemic. This waiver is designed to help children with serious emotional disturbances access care within their homes and their community. 

At its peak in 2020, more than 1,100 Iowa children accessed services under this waiver, which cost more than $8 million in state and federal funding. By 2023, those totals had reached just over 1,000 youth.

HHS officials said there were additional flexibilities granted on this waiver to support families navigating pandemic-related challenges, such as isolation. That included allowing family members to be paid to provide respite care.

More: Is your child struggling to get mental health care? We want to hear your story

Safety net behavioral health providers raise concerns about low Medicaid reimbursement

Behavioral health providers say Iowa’s Medicaid reimbursement rate to provide these services has remained low for years, creating budgetary challenges for safety net providers that mostly serve youth on Medicaid.

Currently, Orchard Place in Des Moines has an annual $1 million shortfall on its psychiatry and therapy services as a result of these low payments from the state insurance plan, said CEO Anne Starr.

These low payments have also meant lower salaries for staff and has created challenges for the Des Moines-based organization to recruit mental health professionals. 

Orchard Place currently has openings for 17 therapists and four supervisor positions. By comparison, the average for vacancies in 2019 was four therapists, Starr said. 

Without these staff, community mental health providers like Orchard Place struggle to meet the growing demand for services among Iowa’s youth.  

“That is directly tied to the reimbursement we get for Medicaid,” Starr said. “There’s a straight line. It’s not just correlated. There’s a straight line to reimbursement.” 

HHS officials told the Register there was a “significant increase” in outpatient mental health and substance use treatment rates in 2023. The Iowa Legislature had approved $13 million for Medicaid rate increases, which included $7 million for mental health therapy and $3 million for PMIC, or psychiatric medical institutions, for children. 

Still, many behavioral health providers across the state have opted to limit their Medicaid clients, or forgo accepting Medicaid altogether, reducing options for those patients even further.

A 2021 analysis by the group Medicaid and CHIP Payment and Access Commission found that only about 45% of psychiatry physicians nationwide accepted new patients who relied on Medicaid for their health coverage.

“We have lots of people on our waiting lists who aren’t getting served, and it’s taking a long time to get them served because we can’t hire enough staff to cover the need, and we can’t hire enough staff to cover the need because our reimbursement is so low,” Starr said. “We have not had a rate increase since we negotiated rates based on cost in 2012. You can’t do business that way.” 

State officials say goal is to funnel money to most effective services

Eyanson, Iowa HHS’s top behavioral health official, acknowledged the gaps that exist in the state’s behavioral health services, saying the current system lacks a true safety net for Iowa families to rely on when in crisis. 

In fact, she said she navigated those challenges herself for two years while her daughter was grappling with thoughts of suicide, adding that understands how lonely that feeling can be for families. 

It’s this reason the state’s top officials are in the midst of overhauling the state’s behavioral health system, according to HHS leadership. The new system, which is set to go online July 1, will fill the gaps and help address the worsening mental health of Iowa residents.

More: Reynolds signs ‘transformative’ behavioral health overhaul into Iowa law. What it does:

Mental health providers say the current challenges won’t be addressed in a meaningful way without more funding to boost the state’s limited service array. So far, some providers say the state’s decision-making on what core services will be available to children under the new system has not been transparent. 

“Before we go ahead and say yes to this proposal, I keep hoping that somebody’s going to say ‘are we funding the key components that we say we need for a children’s mental health system?’ Because it doesn’t seem like anybody’s looking at that,” Starr said in an interview. 

According to Garcia, there’s more than a billion dollars in Iowa’s behavioral health system. However, a significant amount of that funding is tied up “in misplaced precision” in the service array “that’s lacking evidence based outcomes,” leading to system inefficiencies.

“Step one is to take that money and get it out to Iowans who need it, and then identify ‘do we need more money in the system?’ I understand it from a provider’s perspective, but I think there’s a step in-between we have to do,” Garcia said. 

In particular, Eyanson said officials hope to invest more safety net dollars into prevention and early intervention services. Currently, those services are not well-funded by Medicaid or other insurance coverage, meaning youth with behavioral health needs can’t access services before there’s a problem.

Eyanson emphasized providers would not be expected to continue providing services for free. As the state moves dollars into other areas, behavioral health providers can make business decisions on whether their model would pivot to offer those services. 

“The overarching goal is we need to get more money into the system to do the services to serve people, and that means that we will let go of the things that no longer serve us,” she said. “And that’s okay, because there’s still a heck of a lot of work for all of us to do.”

In the meantime, as state officials flesh out what’s next for youth behavioral health services, Iowa families continue to raise alarms about the challenges they are facing trying to access care for their children. In some cases, help doesn’t come until long after a family has exhausted their resources, or a crisis has taken hold. 

“I feel there’s significant gaps,” Preston said. “I know that ideally every service in the world could have more money, but with mental health, when there are huge gaps, it does cause significant worries and problems for the families that have to endure it.”

Michaela Ramm covers health care for the Des Moines Register. She can be reached at [email protected] or at (319) 339-7354.

About the ‘Young and in Crisis’ project

Young and in Crisis is the Register’s occasional series exploring Iowa’s youth mental health crisis. The series focuses on the experiences of young Iowans and their families who struggle to access mental and behavioral health services, digs into the factors that create barriers to that care and explores solutions from top state officials.

Michaela Ramm is reporting this series while participating in the USC Annenberg Center for Health Journalism’s 2024 Data Fellowship.