Based on the many uninsured persons with mental health or
substance use disorders (MH/SUD) and the limits of coverage for
those who have MH/SUD benefits, the Patient Protection and
Affordable Care Act (ACA)1 could expand MH/SUD coverage
for millions of people.2 The ACA offers various means to
improve access to and enhance quality of MH/SUD coverage and
services. This article explores some of the opportunities and
challenges under the Affordable Care Act with regard to mental
health and substance use disorders.
ACCESS TO MH/SUD BENEFITS
The ACA contains broad insurance reforms that will impact access
to MH/SUD benefits, including elimination of pre-existing
conditions and of annual and lifetime caps on coverage, group
eligibility for children to age 26, and prohibition of rescission
of coverage. The ACA requires that certain plans offer MH/SUD
benefits as part of the essential health benefits package in
qualified health plans.3 It also calls for expansion of
Medicaid eligibility, which would significantly increase access to
mental health care. Finally, the law extends the reach of federal
mental health parity laws.4
ESSENTIAL HEALTH BENEFITS
About one-third of individuals covered in the individual insurance
market have no coverage for substance use disorders; nearly one in
five has no coverage for mental health services.5 One
estimate projects that 3.9 million people in the individual market
will gain MH/SUD coverage through the ACA.6 The
Congressional Budget Office anticipates that millions more will
secure MH/SUD benefits through exchange-offered small group
Prior to the ACA, federal law did not mandate benefits for mental
health conditions or substance use disorders in private
plans.8 The ACA creates, for the first time, a
federal coverage mandate for certain group and non-group
plans.9 Effective in 2014, all health plans offered in
the individual market and all qualified small group health plans
offered through an exchange must cover an "essential health
benefit" (EHB) package that includes MH/SUD benefits.10
The ACA does not prescribe the services to be covered, however, and
the final rule offers only broad guidelines.11
Massachusetts requires that state-regulated insurance policies
include certain mental health benefits. A state may require
exchange plans to cover benefits beyond EHB categories, provided
that the mandates were in place before December 31,
2011.12 Massachusetts-required MH/SUD benefits for
qualified health plans are found in the state mental health parity
The focus of the Supreme Court's 2012 decision in National
Federation of Independent Business v. Sebelius was the ACA's
requirement that individuals have health coverage.14 Yet
the other major issue - the legality of the Medicaid
expansion15 - is arguably more important to expanding
access. While the Court upheld Congress' authority to expand
Medicaid eligibility, it ruled that states did not have to adopt
the new standards.16
Participating states must actively enroll eligible individuals
with mental health and substance-related disorders.17
Nearly 18 percent of people who would be eligible under full
Medicaid expansion (all states) have such a disorder.18
Unfortunately, hundreds of thousands of people with severe mental
and substance use disorders will not receive coverage due to
FEDERAL PARITY LAW AFTER THE ACA
The Mental Health Parity Act of 1996 (MHPA) and the Mental Health
Parity and Addiction Equity Act of 2008 (MHPAEA) require a certain
level of coverage for mental health and substance use disorders
based on parity with financial requirements and treatment
limitations applicable to medical/surgical benefits. Before the
ACA, large group plans had to comply if they offered
medical/surgical and MH/SUD benefits. Individual market policies
were not subject to federal parity requirements. Although most
small group plans cover some MH/SUD benefits, federal parity laws
have exempted such plans from compliance.20 Regulators
estimate that 23.3 million current small group enrollees will
benefit from expanded parity.21
The ACA expands the reach of federal mental health parity
requirements to: 1) individual and small group qualified health
plans;22 2) Medicaid non-managed care benchmark and
benchmark-equivalent plans;23 and 3) plans offered
through the individual market.24 Yet the Act expands the
small employer exemption even as it extends parity to qualified
small group health plans. Under the ACA and MHPAEA, a small
employer is defined as having one to 100 employees, increased from
two to 50 employees under the MHPA.25 According to the
Department of Labor, the broadened definition applies only to
nonfederal governmental plans while the original definition applies
to private employer plans.26 Until 2016, however, states
may use the definition of small employer in pre-ACA law for plans
offered through exchanges.27
Health insurers are now preparing individual and small group
products to be sold on exchanges. Yet there is disagreement about
the interpretation and implementation of the MHPAEA.28
Among the important issues to be resolved are whether plans must
cover a full continuum of services29 and whether HHS has
properly regulated plan management of benefits.30
FEDERAL PARITY LAW AND PUBLIC PLANS
Prior to the ACA, Medicaid managed care plans and CHIP plans had
to comply with some or all federal mental health parity
requirements. Post-ACA, non-managed care Medicaid
benchmark and benchmark-equivalent plans must offer MH/SUD benefits
that satisfy federal parity law with respect to financial
requirements and treatment limitations.31 Plans that
cover Early and Periodic Screening, Diagnostic, and Treatment
Services (EPSDT) for eligible children will be deemed to meet
Medicare plans are exempt from federal parity laws. Notably,
however, the ACA requires Medicare to cover an annual wellness
visit that assesses risk factors and conditions, including mental
health conditions, for which preventive intervention is recommended
INTERACTION OF FEDERAL AND STATE PARITY LAWS
States have filled gaps in federal parity laws by mandating
MH/SUD benefits in insurance policies.34 Massachusetts
has taken a full parity approach to mental health benefits
in state-regulated plans, requiring coverage of certain MH/SUD
conditions and services on the same terms as coverage of physical
conditions. The proposed EHB benchmark plan for Massachusetts
restricts benefits for "non-biologically based" mental disorders,
as permitted by the state parity law.35 Pursuant to the
ACA, however, qualified health plans must comply with the
MHPAEA.36 The quantitative treatment limits for mental
disorders designated non-biologically based by state law appear to
violate the MHPAEA unless also applied to medical/surgical
ACA PROVISIONS RELATING TO QUALITY AND DELIVERY OF
The ACA contains numerous provisions that affect the quality and
delivery of health care. Some general provisions will almost surely
impact MH/SUD services. Other sections of the Act are directed at
prevention and treatment of mental illness and substance use
GENERAL PROVISIONS LIKELY TO IMPACT MH/SUD
General provisions of the ACA likely to impact the quality and
delivery of MH/SUD services include sections creating the National
Prevention, Health Promotion and Public Health Council, the Center
for Medicare and Medicaid Innovation, the National Strategy for
Quality Improvement, and the Patient-Centered Outcomes Research
Institute; sections establishing Healthy Aging, Living Well and
Community Transformation grants; certain initiatives to integrate
and coordinate primary and specialty care; expansion of Medicaid
home and community-based services; and mandated data
NATIONAL PREVENTION, HEALTH PROMOTION AND PUBLIC HEALTH
The ACA requires the President to establish a National Prevention,
Health Promotion and Public Health Council. The council is charged
with providing coordination and leadership on prevention, wellness
and health promotion, public health, and integrative health care.
Mental health and substance abuse are among the council's national
CENTER FOR MEDICARE AND MEDICAID INNOVATION
The law establishes a Center for Medicare and Medicaid Innovation
to test innovative payment and service delivery models that will
reduce expenditures while preserving or enhancing quality of
NATIONAL STRATEGY FOR QUALITY IMPROVEMENT
The ACA requires the Department of Health and Human Services (HHS)
to develop a National Strategy for Quality Improvement, which
focuses on high-cost chronic diseases and identifies priorities
that have the greatest potential for improving outcomes,
efficiency, and patient-centered care.39 As the leading
cause of disability for individuals age 15 to 44, mental health
disorders will presumably be a focus of the national
PATIENT-CENTERED OUTCOMES RESEARCH INSTITUTE
The law creates a Patient-Centered Outcomes Research Institute to
fund research comparing the clinical effectiveness of
HEALTHY AGING, LIVING WELL
The Healthy Aging, Living Well program awards grants to state and
local health departments and Indian tribes to provide public health
community interventions, screenings and clinical referrals for
individuals aged 55 to 64 years of age. Intervention and screening
activities may address substance abuse and mental
health.42 Under a related provision, the secretary must
evaluate community-based prevention and wellness programs for
Medicare beneficiaries, including programs that address mental
COMMUNITY TRANSFORMATION GRANTS
The ACA creates a Community Transformation Grant program for state
and local governments, community organizations and Indian tribes to
implement, evaluate, and disseminate evidence-based preventative
health activities. Among other purposes, grant activities may focus
on improving social and emotional wellness and mental
INITIATIVES TO INTEGRATE AND COORDINATE PRIMARY AND
The ACA establishes a Federal Coordinated Health Care
Office within CMS to more effectively integrate benefits for
persons eligible for Medicare and Medicaid benefits ("dual
eligibles"). The FCHCO seeks to ensure full access to covered
services and improve quality and continuity of care.45
The ACA also supports and expands medical homes for
Medicare and Medicaid beneficiaries with chronic conditions, which
includes one serious and persistent mental health
condition.46 The patient chooses a designated provider
or health team to coordinate care.47 A community mental
health center may be a designated provider if it satisfies certain
criteria. MH/SUD service providers are also eligible for community
health team grants to support medical homes.48 Under a
separate provision, the ACA funds states and Indian tribes to
establish community-based interdisciplinary health teams to support
primary care practices; such teams may include behavioral and
mental health care providers.49
HOME AND COMMUNITY-BASED SERVICES UNDER MEDICAID
The ACA allows states to offer home and community-based (HCB)
supports to Medicaid beneficiaries without obtaining a waiver from
HHS. State HCB programs must maximize beneficiary independence,
support self-direction and improve coordination among
The ACA requires expanded and improved data collection related to
health care disparities. People with disabilities, including those
with mental illness, will be one focus of such efforts. The data
will be used to develop better policies and practices for treatment
of individuals with MH/SUDs, and to enhance integration of mental
health and primary care.51
ACA PROVISIONS TARGETED AT MH/SUD PREVENTION AND
Provisions in the ACA that explicitly target research, prevention
and treatment with respect to mental health conditions and
substance use disorders include: 1) a program to combat postpartum
depression and psychosis; 2) the establishment of Centers for
Excellence in Depression; 3) co-location of primary and MH/SUD care
in mental health treatment settings; 4) funding of MH/SUD services
in school-based health centers; 5) workforce capacity expansion in
the MH/SUD treatment field; 6) grants for small businesses to
provide comprehensive wellness programs; and 7) the Medicaid
Emergency Psychiatric Demonstration Project.
The ACA funds an initiative to address and combat postpartum
depression and postpartum psychosis through research and education.
The secretary may make grants to state and local governments and
nonprofit private hospitals, community health centers and community
based organizations to deliver essential services to persons with
or at risk for postpartum mental health conditions.52
The ACA also includes the Establishing a Network of
Health-Advancing Centers of Excellence for Depression (ENHANCED)
Act of 2009. Under the ENHANCED Act, the secretary may fund
institutions of higher education and nonprofit research
institutions to establish national centers of excellence for the
treatment of depressive disorders. Grantees must develop
evidence-based interventions, train mental health professionals,
and educate the public to reduce stigma and raise awareness of
CO-LOCATION OF PRIMARY AND SPECIALTY CARE
A coordinated, team-based approach to the delivery of primary care
improves quality and outcomes for individuals with mental health
and substance use disorders.54 One such model, the
medical home, is discussed above. The ACA also funds coordination
and integration of primary and specialty services for adults with
mental illness and co-occurring conditions, through co-location of
services in community-based behavioral health
MH/SUD CARE IN SCHOOL-BASED HEALTH CENTERS
Mental health is the primary reason that students visit
school-based health centers, with 70 to 80 percent of children who
receive mental health services accessing them in
school.56 School-based health centers must provide an
array of mental health services, including assessments, crisis
intervention counseling, treatment, and referral. The ACA funds new
and existing SBHCs, giving priority to communities that evidence
barriers to MH/SUD prevention for children and
PROGRAMS TO DEVELOP WORKFORCE CAPACITY
The ACA sets the capacity of the mental health workforce and the
integration of physical and mental health services as priorities of
the National Workforce Strategy. The act creates a National Health
Care Workforce Commission and a National Center for Healthcare
Workforce Analysis, with grants for collaborating state
The ACA establishes a loan repayment program targeting the
pediatric health care workforce, including qualified professionals
in child and adolescent mental and behavioral health care and
substance abuse prevention and treatment.59 The ACA also
funds medical schools to build capacity in primary care, with
priority given to innovative approaches, including systems that
integrate physical and mental health care, and to training in the
care of vulnerable populations, including individuals with mental
health and substance-related disorders.60 The act
further subsidizes tuition and fees for students in
mental/behavioral health education programs, including social work
and psychology programs and institutions providing field placements
in child and adolescent mental health.61
The act creates a United States Public Health Services Track for
students in accredited health professions programs at academic
health centers, of which 12 percent must be in the behavioral and
mental health professions.62 The act also funds new and
expanded Area Health Education Centers, which recruit, train and
educate health professionals for underserved areas and to serve
health disparity populations. Grantees may develop and implement
innovative curricula that involve collaboration between primary
care and behavioral/mental health facilities.63 Finally,
the act authorizes Teaching Health Center development grants to
community mental health centers to establish and expand primary
GRANTS FOR SMALL BUSINESSES TO PROVIDE
COMPREHENSIVE WELLNESS PROGRAMS
Employers with fewer than 100 employees may apply for grants to
establish comprehensive wellness programs. Among the required
program activities are supportive environment efforts, specifically
including policies to encourage improved mental
MEDICAID EMERGENCY PSYCHIATRIC DEMONSTRATION
The ACA authorizes HHS to assess emergency psychiatric
stabilization services for non-elderly adult Medicaid beneficiaries
with respect to access to inpatient care, discharge planning and
cost.66 Psychiatric hospitals must report to HHS on
quality measures beginning in 2014.67
The ACA expansions come at a critical time for persons with mental
illness and substance-related disorders. States' investment in
mental health services dropped dramatically between 2009 and 2012
as many more people sought publicly financed treatment. Funding for
timely, quality treatment of mental health conditions and substance
use disorders is essential. The Affordable Care Act offers hope
that greater access to quality mental health care may not be such a
distant promise after all.
1The Patient Protection and Affordable Care Act, Pub.
L. No. 111-148, 124 Stat. 119 (March 23, 2010), as amended by the
Health Care and Education Reconciliation Act of 2010, Pub. L. No.
111-152, 124 Stat. 1029 (Mar. 30, 2010) (referred to herein as "The
Affordable Care Act" or "ACA" or "The Act").
2Twenty-five percent of the uninsured are believed to
have a mental health condition or a substance use disorder or both.
ASPE Research Brief: Affordable Care Act Will Expand Mental Health
and Substance Use Disorder Benefits and Parity Protections for 62
Million Americans, by Kirsten Beronio, Rosa Po, Laura Skopec and
Sherry Glied, Department of Health and Human Services, Office of
the Assistant Secretary for Planning and Evaluation (February
2013), at 2.
3ACA Health Reform: Overview of the Affordable Care
Act, SAMHSA News, Vol. 18, No. 3 (May/June 2010), accessed May 1,
4ACA § 131 extends applicability of federal parity laws
enacted by the Mental Health Parity Act of 1996, P.L. 104-204
(1996) and the Paul Wellstone and Pete Domenici Mental Health
Parity and Addiction Equity Act of 2008, P.L. 110-343 (2008).
5ASPE Research Brief: Affordable Care Act Will Expand
Mental Health and Substance Use Disorder Benefits and Parity
Protections for 62 Million Americans, supra, note 2, at 1.
6Id. at 2.
http://www.cbo.gov/topics/health-care/affordable-care-act for the
latest CBO analyses of the ACA's impact.
8Neither the Employee Retirement Income Security Act of
1974, 29 U.S.C. 1001 et seq., nor the federal parity laws, supra,
note 4, mandate such coverage.
9Mental Health Parity and the Patient Protection and
Affordable Care Act of 2010, Amanda K. Sarata, Congressional
Research Service (December 28, 2011), CRS Pub. No. 7-5700, at
11A state's EHB package (EBHP) must equal the scope of
benefits provided under a typical employer plan. ACA §§
1302(b)(2)(A), 1311(d)(3). State-required benefits (mandates)
include only those specifying care, treatment, or services that a
health plan must cover. Guide to Reviewing EHB Benchmark Plans,
accessed May 7, 2013 at
12See Patient Protection and Affordable Care Act;
Standards Related to Essential Health Benefits, Actuarial Value,
and Accreditation, 78 Fed. Reg. 12834 (February 25, 2013). For
benefit classes mandated after December 31, 2011, the state will
have to cover the cost differential. Id.; ACA § 10104(e)(1). For a
discussion of issues raised by the EHB provisions of the Act, see
The Essential Health Benefits Provisions of the Affordable Care
Act: Implications for People with Disabilities, by Sara Rosenbaum,
Joel Teitelbaum and Katherine Hayes, Commonwealth Fund Pub. 1485
Vol. 3 (March 2011), at 3, accessed April 23, 2013.
13See Mass. Gen. Laws c. 175 § 47B (g), c. 176A §
8A(g), c. 176B § 4A(g), and c. 176G § 4M (g ).
14A plurality found the individual mandate provision
constitutional, but on a different basis than anticipated (the Tax
Clause rather than the Commerce Clause). National Federation of
Independent Business v. Sebelius, -- U.S. --, 132 S. Ct. 2566,
2601, 183 L. Ed. 2d 450 (2012).
15ACA § 2001(a)(1).
16National Federation of Independent Business v.
Sebelius, 132 S. Ct. at 2607-8.
17ACA § 2201.
18The CBO has estimated that 13 million Americans would
receive MH/SUD benefits in 2014 as a result of a full expansion.
Easiest Path to Mental Health Funding May Be Medicaid Expansion,
Michael Ollove, Stateline: The Daily News Service of the Pew
Charitable Trusts (January 18, 2013), accessed May 14, 2013 at
19The CBO has projected that around three-quarters of a
million people with severe mental disorders will lose the
opportunity for Medicaid coverage due to the decision in NFIB v.
Sebelius, supra, note 16. U[niversity] of M[innesota] examines
consequences of the Affordable Care Act's Medicaid expansions on
people with mental disorders, posted April 3, 2013 5:00 pm at
release for Two Steps Forward, One Step Back? Implications of the
Supreme Court's Health Reform Ruling for Individuals with Mental
Illness, Ezra Golberstein and Susan H. Busch, JAMA Psychiatry,
published online April 3, 2013).
20Mental Health Parity and the Patient Protection and
Affordable Care Act of 2010, supra, note 9, at 3.
21ASPE Research Brief: Affordable Care Act Will Expand
Mental Health and Substance Use Disorder Benefits and Parity
Protections for 62 Million Americans, supra, note 2, at 3.
22The ACA establishes American Health Benefit
Exchanges, which must make available qualified health plans to
qualifying individuals and employers. ACA §§ 1301(a), 1311.
23ACA § 2001(c).
24See Standards Related to Essential Health Benefits,
78 Fed. Reg. at 12864, supra, note 12.
25ACA § 1304(b)(2).
26FAQs About Affordable Care Act Implementation Part V
and Mental Health Parity Implementation, Q8: After the amendments
made by the Affordable Care Act, are small employers still exempt
from the MHPAEA requirements? How is "small employer" defined?,
accessed May 14, 2013 at
27ACA § 1304(b)(3).
28HHS' failure to issue a final rule is blamed as one
source of this confusion. Since 2008, Insurers Have Been Required
by Law to Cover Mental Health - Why Many Still Don't, Judith
Graham, The Atlantic, posted March 11, 2013 at 10:16 AM ET,
(accessed May 1, 2013). Operative MHPAEA guidance can be found in
the Interim Final Rules Under the Paul Wellstone and Pete Domenici
Mental Health Parity and Addiction Equity Act of 2008, 75 Fed Reg.
5410 (February 2, 2010).
29The alternative is to cover only certain services in
each of the six required categories: inpatient care in network,
inpatient care out of network, outpatient care in network,
outpatient care out of network, emergency care and prescription
drugs. Insurers Have Been Required by Law to Cover Mental Health -
Why Many Still Don't, supra, note 27.
30Plan management of benefits refers to HHS'
restriction of "nonquantitative" treatment limitations. See Interim
Final Rules Under the Mental Health Parity and Addiction Equity Act
of 2008, 75 Fed Reg. at 5436, 5443, 5449-50.
31ACA § 2001(c).
34Federal law takes a mandated offering parity
approach, requiring parity for policies under which MH/SUD benefits
are offered but lacking a mandate that such benefits be provided.
Mental Health Parity and the Patient Protection and Affordable Care
Act of 2010, supra, note 9, at 2.
35Massachusetts selected the state's largest small
group HMO plan as its benchmark. Appendix A to Standards Related to
Essential Health Benefits, 78 Fed. Reg. at 12871 (Blue Cross Blue
Shield of Massachusetts' HMO). Under the designated benchmark plan,
outpatient services are limited to 24 visits and inpatient services
are limited to 60 days for "non-biologically based" mental
disorders. Office of Consumer Affairs and Business Regulation,
Essential Health Benefit Benchmark Plan, accessed on May 7, 2013 at
3645 C.F.R. § 156.115(a)(3).
37ACA § 4001(a).
38ACA § 3021.
39ACA § 3011.
40How Will Health Reform Help People with Mental
Illnesses? An analysis of the Affordable Care Act passed by
Congress in 2010 and how it will affect people with psychiatric
disabilities, by Chris Koyanagi and Allison Wishon Siegwarth, Judge
David L. Bazelon Center for Mental Health Law (November 2009,
updated June 2010), accessed April 23, 2013 at
41ACA § 6301.
42ACA § 4202(a).
43ACA § 4202(b)
44ACA § 4201.
45ACA § 2602.
46ACA § 2703(a).
47Care Integration in the Patient Protection and
Affordable Care Act: Implications for Behavioral Health, Bevin
Croft and Susan L. Parish, Adm. Policy Ment. Health, published
online February 28, 2012; see also ACA Could Benefit Elders with
Mental Health Problems, but Will It?, Michael B. Friedman and
Kimberly A. Williams, Aging Today Online, American Society on
Aging, accessed April 23, 2013 at
48Update: Details on Healthcare Law's Landmark
Expansion of Addiction/Mental Illness Coverage, Legal Action
Center, accessed May 2, 2013 at
49ACA § 3502. Accountable care organizations (ACOs) are
another integration and coordination mechanism encouraged by the
Act. ACOs coordinate care among multiple health providers that
share responsibility for enrolled patients in an effort to improve
quality and control costs. For a discussion of ACOs' promise for
improving delivery of mental health care, see Moving Beyond Parity:
Mental Health and Addiction Care under the ACA, Colleen L. Barry
and Haiden A. Huskamp, 365 N. Engl. J. Med. 973 (September 5,
2011), accessed May 7, 2013 at
50ACA § 2402.
51Care Integration in the Patient Protection and
Affordable Care Act, supra, note 46, at 3.
52ACA § 2952(b).
53ACA § 10410.
54Health Care Reform and Care at the Behavioral
Health-Primary Care Interface, Benjamin G. Druss and Barbara J.
Mauer, Psychiatric Services, vol. 61 no. 11 (Nov. 1 2010), accessed
April 23, 2013 at
another discussion of mental health care quality and delivery under
the ACA, see Seizing Opportunities Under the Affordable Care Act
for Transforming the Mental and Behavioral Health System, David
Mechanic, 31 Health Affairs 376 (February 2012).
55ACA § 5604.
56See Cunningham, J., Grimm, L. O., Brandt, N. E.,
Lever, N., & Stephan, S. (January, 2012). Health Care Reform:
What School Mental Health Professionals Need to Know. Baltimore,
MD: Center for School Mental Health, Department of Psychiatry,
University of Maryland School of Medicine.
57ACA § 4101.
58ACA §§ 5101, 5103.
59ACA § 5203.
60ACA § 5301.
61In addition, the Act funds training of
paraprofessional child and adolescent mental health workers and of
direct care workers in long-term care and HCB settings.ACA §§ 5301,
62ACA § 5315.
63ACA § 5403(a).
64ACA § 5508.
65ACA § 10408.
66ACA § 2707.
67ACA § 10322(a).