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Health Care Reform Explained

The New Health Care Law and Mental Health Services

Your questions answered

Q. What does health reform do to help people with mental illness get the treatment they need? And will the new law make it any easier for people with Medicare to find a therapist who accepts new patients?

A. Health reform brings a “huge” change for people who buy their own coverage or work for small companies, says Chris Koyanagi, policy director at the Bazelon Center for Mental Health Law, a Washington, D.C., nonprofit organization dedicated to improving the lives of people with mental illness.

The law says insurance plans must offer coverage for treatment of mental illness and substance abuse (including drug and alcohol addiction).

It is the first time that the federal government has mandated that health insurance include mental health benefits.

The change takes mental health coverage “a giant step forward,” says Andrew Sperling, director of legislative advocacy for the National Alliance on Mental Illness, a nationwide advocacy group. The law applies to plans sold to individuals and small businesses in the new state insurance exchanges that begin operating in 2014. Under the health reform law, insurance offered on the state exchanges must provide, at a minimum, an “essential benefits package.” Mental health coverage is one of the essential benefits.

“This brings mental health into the mainstream of general health care,” says William Emmet, former director of the Campaign for Mental Health Reform, a coalition of 18 organizations that lobbied for the provision.

The reform also requires mental health benefits to be included in state-administered Medicaid, the government health insurance program for low-income Americans. The requirement doesn’t apply to large employer-sponsored health plans, but Sperling says that most already offer mental health coverage.

Other protections are built into mental health coverage. Under two earlier laws, insurance companies cannot add restrictions or fees for mental health coverage that differ from those for medical or surgical coverage. Charges for mental health coverage (copayments, deductibles, etc.) and lifetime limits must be the same as those for other health care coverage. Any limits on treatment, including the number of doctor visits or hospital days covered, also must be the same.

Once the state exchanges open, Koyanagi says nearly everyone in the country will have access to mental health coverage, including about 2 million people who suffer from mental illness and can’t afford treatment.

Other health reform provisions—especially the expansion of Medicaid coverage to single adults—will help people with mental illness since they are more likely to be uninsured or underinsured, according to mental health advocates. Provisions improving community-based services also will help them live at home longer.

“A lot of our people end up in nursing homes or hospitals when all they need is intensive services at home,” says Koyanagi.

People in Medicare will get some help this year obtaining outpatient mental health services, but not from the health reform law.

Under the 2008 Medicare Improvements for Patients and Providers Act, copayments for mental health care that have been set at 50 percent will be reduced to 45 percent in 2010 and will continue to decline until they reach 20 percent in 2014.

But even though beneficiaries will have to pay less for treatment, that doesn’t necessarily mean it will be easier to find a mental health provider who will accept new Medicare patients. Unfortunately, that’s a problem not only Medicare beneficiaries may encounter. In some areas of the country there are psychiatrists and psychologists who do not accept any type of insurance.

Until more mental health providers participate in insurance plans, some insurers will still reimburse patients for part of their out-of-pocket expenses for visiting a nonparticipating or out-of-network provider. It’s not ideal, but some reimbursement is better than none.
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