America’s mental health system is failing its seniors, caught in a perfect storm of: a rapidly growing population, a severe shortage of geriatric psychiatrists, and a Medicare model buckling under the weight of chronic, costly conditions. For millions of older adults living with anxiety, depression, or isolation, the system offers little or no treatment; often, the nearest provider is hours away, and waitlists stretch for months. This access crisis is stark: more than 160 million Americans live in federally designated mental health professional shortage areas. The traditional Medicare fee-for-service model, built for office visits, cannot address the provider deficit or reach homebound seniors. For many, the real choice is not between a human therapist and an AI tool, but between an AI tool and nothing. AI-assisted interventions offering consistent, 24/7 support through chatbot-based cognitive behavioral therapy are a critical, scalable lifeline in a system with no other viable alternative.

The catastrophic cost of preventive failure

The current structure of Medicare is failing to provide continuous, preventive mental health care, resulting in a demonstrable and costly shift toward acute care utilization for those with psychological distress. Research highlights a concerning trend: upon reaching Medicare eligibility at age 65, adults with psychological distress experience a significant decrease in outpatient mental health visits with any health care professional and a decrease in psychotropic medication fills.

This reduction in preventive and maintenance care correlates with a troubling consequence: Medicare eligibility is associated with significant increases in acute care use, specifically inpatient admissions and emergency department visits. These increases were primarily driven by non-mental-health-related conditions. This strongly suggests that Medicare’s limited mental health coverage prevents timely outpatient intervention, leading to untreated psychological distress becoming a “threat multiplier” that impairs an individual’s ability to manage physical chronic conditions, resulting in higher rates of hospitalization for conditions like cardiac disease and accelerated cognitive decline.

From an economic perspective, this represents a costly and inefficient system; since a single psychiatric hospitalization can cost Medicare tens of thousands of dollars, investing in a preventive AI-support tool, whose cost is negligible in comparison, yields a significant, common-sense return on investment by preventing these expensive, traumatic acute events.

Breaking the cycle: Why administrative barriers make AI support essential

Administrative complexity doesn’t just frustrate seniors; it actively worsens health outcomes. Medicare Part B and D premiums alone consume nearly 25 percent of average Social Security benefits, yet millions of low-income older adults are eligible for programs like Medicare Savings Programs (MSPs) and the Low Income Subsidy (LIS), which could save them up to $8,400 annually, yet remain unenrolled due to burdensome application processes requiring up to 30 pages of documentation. This same administrative maze blocks access to mental health care: long waitlists, referral requirements, and transportation barriers to distant providers create insurmountable obstacles for seniors already struggling with depression or anxiety.

The result is a vicious cycle. Financial stress exacerbates mental health conditions, while untreated depression and anxiety impair a senior’s cognitive capacity to navigate complex paperwork and manage their own care. AI-based mental health support breaks this cycle by offering immediate, barrier-free access; no waitlists, no transportation required. By addressing the mental health component first, these tools may eventually improve a senior’s capacity to navigate other beneficial programs and manage their overall health.

While advocacy for eliminating outdated policy barriers, such as the 190-day lifetime limit on inpatient psychiatric hospital services and restrictions on licensed clinical social workers providing care in nursing homes, remains necessary, legislative change moves slowly. The regulatory path forward should prioritize speed: testing AI solutions through Medicare Advantage and CMMI demonstration projects, particularly in mental health professional shortage areas, can generate the evidence needed for broader coverage while providing immediate relief to vulnerable populations.

Addressing legitimate concerns with transparency

As a founder and software developer, I understand the legitimate concerns about quality, privacy, and bias. The answer is not to ban the technology but to regulate it intelligently. Medicare should not reimburse for any tool without clear standards. It should require:

• Clinical validation: Data demonstrating the tool’s efficacy, ideally through frameworks already being developed by the FDA’s Digital Health Center.
• Auditable standards: Adherence to robust privacy laws (HIPAA) and regular audits for algorithmic bias, using frameworks like the one developed by NIST.
• Interoperability: Assurance that the tool can share necessary data (with patient consent) with a primary care provider or specialist.
• Human-in-the-loop: Require clear escalation protocols to a human provider when AI detects a crisis or its limits, ensuring tools can integrate with existing care teams or function as standalone support in provider-absent regions.

These safeguards are not only possible; they are essential for building trust with patients and providers.

A responsible regulatory path forward

CMS doesn’t need to create a new system overnight. The authority exists to test these solutions responsibly.

• Phase 1: Medicare Advantage (MA) innovation: CMS should issue clear guidance allowing MA plans to offer AI-based mental health tools as a supplemental benefit, tracking their impact on hospitalization rates and total cost of care.
• Phase 2: CMMI demonstration projects: Launch focused pilots, especially in designated Mental Health Professional Shortage Areas, to gather real-world data on how these tools perform in diverse, underserved populations.
• Phase 3: National coverage determination: Based on the data from these pilots and not on speculation, CMS can then make an evidence-based decision about broader reimbursement.

While the crisis demands immediate action, Phase 1 can begin immediately through Medicare Advantage, providing relief to millions of beneficiaries while we gather data for broader implementation.

The cost of inaction

The Medicare Trustees’ own reports warn of the Trust Fund’s impending insolvency. We are accelerating this crisis by refusing to pay for preventive solutions, choosing instead to pay multiples more for the acute, catastrophic consequences. This is a failure of both fiscal policy and human empathy. Other nations, including the U.K. and Singapore, are already integrating these technologies to cope with similar demographic pressures. The U.S. should not be lagging in a field it largely invented. We have the technology. We have a clear, step-by-step path to test it. What we need now is the regulatory courage to act.

Ronke Lawal is the founder of Wolfe, a neuroadaptive AI platform engineering resilience at the synaptic level. From Bain & Company’s social impact and private equity practices to leading finance at tech startups, her three-year journey revealed a $20 billion blind spot in digital mental health: cultural incompetence at scale. Now both building and coding Wolfe’s AI architecture, Ronke combines her business acumen with self-taught engineering skills to tackle what she calls “algorithmic malpractice” in mental health care. Her work focuses on computational neuroscience applications that predict crises seventy-two hours before symptoms emerge and reverse trauma through precision-timed interventions. Currently an MBA candidate at the University of Notre Dame’s Mendoza College of Business, Ronke writes on AI, neuroscience, and health care equity. Her insights on cultural intelligence in digital health have been featured in KevinMD and discussed on major health care platforms. Connect with her on LinkedIn. Her most recent publication is “The End of the Unmeasured Mind: How AI-Driven Outcome Tracking is Eradicating the Data Desert in Mental Healthcare.”