Historically, services for mental health and substance use disorder have not been covered by most insurance plans. When plans did provide coverage, they often had higher co-pays and deductibles, restrictive lifetime or annual dollar limits and fewer options. Two significant pieces of legislation, the Mental Health Parity Act (MHPA) of 1996 and the Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008, have worked to reduce this inequity.
The MHPA required that annual and lifetime dollar caps on mental health benefits in group health plans not be more restrictive than those on medical/surgical benefits. However, MHPA still allowed insurance companies to treat mental health services differently and make them more difficult to access than other benefits.
The MHPAEA expanded upon the MHPA by adding benefits for substance use disorder and requiring that financial and treatment limitations for mental health and substance abuse services not be more restrictive than those that apply to other benefits. Like the MHPA, the MHPAEA does not require insurers to include mental health and/or substance use disorder services in their benefit packages.
Although the MHPAEA originally only applied to health plans with more than 50 employees and group plans, its provisions have recently been incorporated into other laws. For example, MHPAEA provisions now apply to coverage under Children’s Health Insurance Program (CHIP) state plans.
The Affordable Care Act (ACA) significantly expanded the MHPAEA by including mental health and substance use disorder services as one of the essential health benefits (EHB). The ACA also applied the MHPAEA to the individual health insurance market and to most qualified health plans, with some exceptions for grandfathered plans. Other provisions of the ACA, such as its ban on pre-existing condition exclusions, limits on out-of-pocket expenses, and the prohibition from rescinding or canceling once someone is enrolled, should also help some individuals with mental health or substance use disorder issues who may have experienced difficulty finding coverage or accessing services.
Despite these advancements in improving access and coverage for mental health and substance abuse disorders, some gaps remain. The MHPAEA does not require plans to cover these services, only that they be provided equitably if they are offered. The ACA extended the reach of the MHPAEA, but a particular service may still not be available in a covered plan: Similar to other benefits, some plans may not cover all conditions, prescriptions, therapies or residential placements. Despite these continued barriers, the MHPAEA and its expanded reach give individuals more tools to fight coverage denials or inequitable coverage of mental health and substance abuse services.
For more information about the MHPAEA — what is covered, how parity is determined, transparency requirements, and exceptions to parity requirements — see this issue brief produced by the National Health Law Program.
This guest post was written by Elizabeth Edwards, Staff Attorney at the National Health Law Program.
The Network for Public Health Law provides information and technical assistance on issues related to public health. The legal information and assistance provided in this document does not constitute legal advice or legal representation. For legal advice, readers should consult a lawyer in their state. This blog post does not represent the views of the Robert Wood Johnson Foundation.