How the Affordable Care Act affects mental health coverage

Many health insurance plans do not cover mental health as well as physical health.

Many health insurance plans do not cover mental health as well as physical health.

Among the issues that the Patient Protection and Affordable Care Act of 2010 attempts to resolve is the long-standing lack mental health coverage within many health care plans.  This is often referred to as "parity," meaning that if insurance covers physical problems it should cover mental health problems as well.  The PPACA builds on two earlier pieces of legislation aimed at the same goal but which did not completely fulfill their promise:

  • The Mental Health Parity Act of 1996 and
  • The Mental Health Parity and Addiction Equity Act of 2008

The PPACA requires that any group health plan that includes benefits for both mental health and substance use disorder and standard medical and surgical coverage must treat both groups equally. For example, plan administrators will handle out-of-pocket costs, benefit limits and practices like prior authorization and utilization review (monitoring the use, delivery, and cost-effectiveness of services) in the same way. Furthermore, the Act mandates that these practices be based on the same level of scientific evidence used by the insurer for medical and surgical benefits.

From an administrative point of view, Dr. Lance Reger, a psychiatrist in Charlotte in private practice, welcomes changes to traditional insurance, which might make it possible for him to accept it. "Insurance for mental health care is different from other forms of insurance," he says. "It was the hallmark of really aggressive managed care," which he said functions best in large group practices. "You need multiple staff members employed specifically to handle it. Practitioners in private practice have difficulty providing adequately in that kind of system."

Here are some practical examples of changes in coverage brought about by the PPACA:

  • Any health insurance plan offering out-of-network medical/surgical benefits must also provide out-of-network mental health and substance abuse benefits.
  • Any health insurance plan that does not limit the number of days or number of visits with medical/surgical benefits cannot limit mental health or substance use disorder benefits.

There are also two other important benefits that came on-line after initial passage of the PPACA:

  • No denial of coverage or premium increases due to substance abuse or existing mental illness.
  • Mental health and substance use disorder services will be part of a set of health care service categories (the "essential benefits package") that must be covered by certain plans, including all insurance policies that will be offered through insurance Exchanges and Medicaid.

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