ACA ushers in changes in mental health and substance abuse coverage

Published on
May 8, 2014

Of the many projections made about the Affordable Care Act, one number stands out among the rest: 62 million. According to the Department of Health and Human Services (DPHHS), that’s the number of individuals who will gain mental health and substance abuse coverage under the ACA, or who will benefit from federal protections for their existing coverage.

The changes can be confusing, however, so here’s a quick overview of how the ACA is impacting access, affordability, and quality of coverage in this often overlooked area of health care.

Breaking down barriers to mental health coverage

One in four adults – over 57 million Americans – experiences mental illness in a given year, while one in 17 adults lives with a serious mental illness such as schizophrenia, major depression, or bipolar disorder.

The ACA guarantees that some form of mental health and substance abuse disorder coverage will be included in most plans. The law also puts measures in place designed to make coverage easier to access and afford. Finally, the ACA takes steps to build on previous legislation to ensure that treatment for mental illness is such issues are covered at the same level as medical and surgical care – this is often referred to as “mental health parity.”

The U.S. Government Accountability Office (GAO) found in 2012 that mental health disorders were the second-most commonly reported condition that led to private health insurance denials, higher-than-average premiums, or coverage restrictions. Under Obamacare, insurers cannot deny coverage due to pre-existing conditions, so many people with mental illnesses can gain access to insurance that was often difficult to secure.

Federal subsidies and caps on out-of-pocket payments will also help individuals to manage the cost of treatment, which has prevented many with serious disorders from receiving care. Researchers found that nearly half of those with a mood, anxiety or substance-abuse disorder who participated in the National Comorbidity Study cited cost or lack of insurance as the reason why they did not receive that care.

Mental health, substance abuse benefits now ‘essential’

Prior to the ACA, those who successfully purchased insurance often found their plans limited in scope. Health plans were known to skimp on mental health and substance use disorder coverage, sometimes excluding one or both, or only covering extreme cases.

DPHHS found that prior to the ACA, one-third of those with coverage from the individual market had no coverage for substance use disorder services. Nearly one-fifth had no coverage for mental health services.

HealthPocket’s March 2013 examination of 11,100 individual health plans found that only 61 percent of plans provided mental health services and only 54 percent substance use services.

By naming mental health and substance use disorder services among the Essential Health Benefits (EHB) – a benefit that must be included in every qualified individual and small group plan – the ACA aims to close that gap. On the federal exchange, plans include psychotherapy and counseling, as well as mental and behavioral health inpatient services and substance use treatment.

This change alone will expand benefits to over 5 million who already had individual or small group plans, according to estimates provided by Health and Human Services. Any individual who purchases insurance in the individual and small-group markets or the state exchanges (or gains coverage through Medicaid) will also have benefits in both areas, potentially bringing that number to 32 million.

The ACA also requires free preventative screenings for depression and alcohol misuse, as well as alcohol counseling. 

Gains in substance abuse benefits

The ACA seeks to integrate substance abuse treatment into primary care, and in so doing, extend treatment to more patients in need.

According to 2011 findings, an estimated 19.3 million Americans 12 or older needed but did not receive needed substance abuse treatment. Of those who were admitted for treatment – a little over a half-million people – three-fifths reported having no insurance.

Not only will coverage be available for many of these individuals, but treatment should no longer be siloed off in specialty centers separate from the rest of the health care system. Additionally, the ACA provides “intermediate” care, or care that does not necessarily require hospitalization but does require more than a doctor’s visit.

Previously, residential treatment for drug and alcohol abuse – treatment that involves living at a facility while undergoing intensive care – was often excluded from health plans, said Andrew Sperling, director of Federal Legislative Advocacy for the National Alliance on Mental Illness.

Now, residential substance abuse treatment must be covered in the same way that one might receive extended care in a nursing home after hospitalization for an injury or illness.

Photo by Dimitris Patrikios via Flickr.