While mental health services are typically covered by private insurance group plans, insurers historically have placed more limitations on mental health treatment, as well as higher co-payments for mental health care, than for other health care services. Individuals seeking to purchase their own insurance frequently find that policies that include mental health coverage are priced out of reach or are not even offered.
The Bazelon Center has supported state and national initiatives to require health plans to cover mental health services to the same degree that they cover other medical and surgical care – that is, to provide mental health services at parity. Federal law now requires that any group health plan that provides mental health or substance abuse services must do so at parity. Health plans for employers with less than 100 workers, as well as plans that provide no mental health coverage, are not subject to these federal requirements. Many states have had their own parity laws, but the federal law is generally more comprehensive than most state laws.
In addition to limitations on services, such as limits on the number of covered days in a hospital or covered outpatient visits, private insurance offers coverage for a limited array of mental health services. Many of the services needed by people who have the most serious disorders are not included in the package. Those services are generally only covered under Medicaid.
In 2014, as a result of provisions in the health reform law known as The Affordable Care Act (ACA), all insurance plans purchased through the new State Exchanges must cover mental health and substance abuse services at parity. Group plans outside the Exchanges will also have to have the minimum benefits defined in the ACA and must continue to follow the federal parity law as before. However, the small employer exemption is broadened in 2014 to exempt plans of employers with less than 100 employees from the parity law’s requirements. For more information, see our health care reform page.