ACA Provides A Huge Expansion in Mental Health Benefits

The ACA will provide one of the largest expansions of mental health and substance use disorder coverage in a generation, according to a statement by the Dept. of Health and Human Services. Through the Affordable Care Act, 32.1 million Americans will gain access to mental health and/or substance use disorder benefits that comply with federal parity requirements. An additional 30.4 million Americans who have some mental health and substance abuse benefits will benefit from the federal parity protections. By building on the structure of the Mental Health Parity and Addiction Equity Act, the Affordable Care Act will extend federal parity protections to 62 million Americans.

All new small group and individual market plans must cover 10 Essential Health Benefit categories, including mental health and substance use disorder services. They must cover them at parity with medical and surgical benefits. Today, almost all large group plans and most small group plans include coverage for some mental health and substance use disorder services, but there are gaps in coverage and many people do not receive the benefit of federal parity protections.

About one-third of those who are covered in the individual market have no coverage for substance use disorder services and nearly 20% have no coverage for mental health services, including outpatient therapy visits and inpatient crisis intervention and stabilization. Even when individual market plans provide these benefits, the federal parity law does not apply to these plans.

About 95% of those with small group market coverage have substance abuse and mental health benefits. Many states have laws offering some parity protection, but most state parity laws are narrower than the federal parity requirement. In addition, 47.5 million Americans lack health insurance coverage altogether and 25% of uninsured adults have a mental health condition or substance use disorder.

The ACA expands coverage in three ways:

1. Includes mental health and substance use disorder benefits as Essential Health Benefits.About 3.9 million people covered in the individual market will gain mental health or substance use disorder coverage. Also, 1.2 million people in small group plans will receive mental health and substance use disorder benefits under the Affordable Care Act.

2. Applies federal parity protections to mental health and substance use disorder benefits in the individual and small group markets. Americans with non-grandfathered individual and small group plans will have mental health and substance use disorder coverage that is comparable to their general medical and surgical coverage.

3. Increases Access to Quality Health Care. The Affordable Care Act will expand insurance coverage to a projected 27 million previously uninsured Americans. Essential Health Benefits, including mental health and substance use disorder services subject to parity requirements, will be available to this newly covered population.

Last Updated 06/29/2022

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