Author: Tommy Volkman

Contingency Management: An Effective Framework for Treating Stimulant Use Disorder and Opportunities for State Medicaid Coverage

Between 2003 and 2022, drug overdose deaths in the United States drastically increased by 366%. The major culprit for the increase in narcotic-related mortality were opioids, a class of drugs including heroin, fentanyl, and oxycodone. In recent years, because of more effective treatment options and the availability of opioid overdose-reversal drugs such as Narcan, opioid overdose deaths have started to decline, including a 24% decrease between 2023 and 2024. This decline represents 27,000 fewer overdose deaths.

In recent years, however, stimulant overdose deaths have started to increase even as opioid overdoses flatlined and started to decline. Stimulants chiefly include cocaine and methamphetamine. Cocaine overdose deaths per 100,000 people increased by 661% between 2010 and 2023, while overdose deaths of psychostimulants (which include methamphetamine),increased by 1,325% per 100,000 people between 2008 and 2023. Treatment for individuals with stimulant use disorder is much more limited than for individuals with opioid use disorder. For example, there is no FDA-approved overdose reversal treatment for stimulants, in contrast to Narcan for opioid overdoses. At this time, there are zero FDA-approved pharmaceutical drugs on the market to treat stimulant use disorder.

Currently, one of the most effective treatments for individuals with stimulant use disorder is contingency management. Contingency management is a treatment that uses incentives (frequently financial) to assist people with stimulant use disorder by paying them for remaining abstinent and for adhering to medication or treatment regimens.

While contingency management trials were historically underfunded, these programs are still effective. For example, contingency management programs operated by the Department of Veterans Affairs showed strongly positive results in helping veterans with stimulant use disorder cease substance use and to stay connected to other treatment resources.

While contingency management programs have a robust history of coverage for veterans, they do not for Medicaid members. Medicaid, the joint federal and state public insurance program that predominantly covers low-income and disabled Americans, provides coverage to roughly one-quarter of Americans. However in 2020, Medicaid members constituted 48% of overdose deaths. In 2019,1.7% of Medicaid members had a diagnosis of substance use disorder, representing millions of Americans.

Section 1115 of the Social Security Act allows states to innovate within their state’s Medicaid program, subject to agreement with the federal government and meeting certain budgetary and programmatic requirements. In 2021, the federal Centers for Medicare and Medicaid Services (CMS)approved the first state 1115 Waiver Demonstration with a contingency management program. Currently, CMS has approved five Medicaid contingency management programs in California, Delaware, Hawaii, Montana, and Washington. Two other states, Michigan and Rhode Island, have submitted applications to CMS for authority to implement these programs in their states but are awaiting CMS action.

Programmatically, the five Medicaid contingency management demonstrations differ in scope. For eligible Medicaid members, members can receive contingency management financial incentives for as short as 12 weeks (Montana) to 24 weeks. Delaware extends contingency management services to pregnant and postpartum members with certain types of substance use disorder for as long as 64 weeks. The financial incentives differ from state to state, with members avoiding substance use eligible between $596 and $1,092 in financial incentives over the course of a member’s enrollment in a contingency management program.

While many Medicaid contingency management programs are in their infancy, initial results are available from California’s first-in-the-nation program. The Interim Evaluation Report from California’s 1115 Waiver Demonstration describes an enrollment of 8,500 members across 100 sites. Among members enrolled, there was a higher retention in other drug treatment programs, improved access to care, reduced emergency department visits, and a reduction in overdose deaths. Results were mixed regarding health equity goals and in reducing hospital readmissions among enrolled members.

While more data is needed, early indicators are that Medicaid coverage for contingency management programs will help to reduce overdose deaths and provide more effective treatment for Medicaid members with stimulant use disorder.

The Affordable Care Act’s Impact in Reducing the Uninsured Rate in America & the Upcoming Health Insurance Cliff

In March 2010, President Barack Obama signed the Patient Protection & Affordable Care Act, commonly known as the ACA or Obamacare, into law. One of the legislation’s main goals was to reduce the number of Americans lacking health insurance coverage. Between the law’s passage in 2010 and 2023, the number of uninsured Americans fell from 46.5 million to 25.3 million.

The ACA sought to increase health insurance coverage for Americans through two main mechanisms: Medicaid expansion and subsidies for Americans to buy insurance through the health insurance marketplaces administered by the federal government and many states. The ACA sought to expand the number of adults under the age of 65 eligible for Medicaid, a jointly funded federal and state program, which traditionally provided coverage to the lowest income Americans. Specifically, the maximum income eligibility threshold for most Medicaid members effectively increased from 100 to 138% of the federal poverty level. However, the Supreme Court, in National Federation of Independent Business v. Sebelius, ruled that states could choose whether to expand Medicaid in their states. As of 2025, 10 states, including populous states such as Texas and Florida, have still not expanded Medicaid.

For Americans ineligible for Medicaid and earning less than 400% of the federal poverty level annually, the Affordable Care Act provides subsidies in the form of a tax credit, the Advanced Premium Tax Credit (APTC), to help people afford their health insurance premiums. By 2019, the number of uninsured Americans had fallen to 28.9 million.

In 2021, President Joe Biden signed the American Rescue Plan Act (ARPA) into law. The legislation provided enhanced subsidies, known as the Enhanced Premium Tax Credit (EPTC), which expanded assistance to Americans seeking to purchase health insurance through the ACA marketplaces. Specifically, ARPA removed the cap on premium tax credits for those making more than 400% of the federal poverty level, providing subsidies for middle-income Americans for the first time. The EPTCs have been successful in increasing health insurance coverage through the ACA marketplaces, as a record 21 million Americans purchased insurance coverage through the marketplace in 2024. Bolstered by these subsidies, a low unemployment rate, and pandemic-era policies protecting Medicaid coverage, the nation’s uninsured rate reached a record low 7.9% in early 2023.

The EPTCs are currently set to expire at the end of 2025, as they were not extended in the One Big Beautiful Bill Act signed into law by President Donald Trump in July. In fact, the EPTCs have become more important in the health safety net because of the impact of the One Beautiful Bill Act’s cuts to Medicaid and other assistance for low- and middle-income Americans, which are estimated by the nonpartisan Congressional Budget Office (CBO) to increase the number of uninsured Americans by 10 million through 2034. The CBO also predicts that the expiration of the EPTCs would increase the number of uninsured Americans by an additional 3.8 million people by 2034, with 2 million Americans losing their insurance next year alone.

For Americans able to still afford their health insurance coverage, their premiums may skyrocket. According to a 2024 analysis, EPTCs saved the average subsidized health insurance plan enrollee more than $700 on their monthly premium. In anticipation of the expiration of these enhanced subsidies, insurers on the ACA marketplace are raising premiums by roughly 20% for 2026.

Health insurance coverage is important for two main reasons. First, it allows Americans to utilize health care services without paying exorbitant out of pocket costs. Secondly, the reimbursement hospitals and other health care facilities receive from insurance companies for services provided to insured patients provide needed financial support to help allow these facilities to stay open. In an time with rising economic headwinds for both Americans and for health care providers, a rise in the health uninsurance rate caused by the expiration of the Enhanced Premium Tax Credits would add to economic challenges faced by patients and health care providers alike.