Federal health reform and access to mental health care

Issue June 2013 By Clare D. McGorrian

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.


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


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 policies.7

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 statutes.13


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 states' non-participation.19


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


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 parity requirements.32

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 or underway.33


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 benefits.


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 disorders.


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 collection.


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 priorities.37


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 care.38


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 strategy.40


The law creates a Patient-Centered Outcomes Research Institute to fund research comparing the clinical effectiveness of treatments.41


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 health.43


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 health.44


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


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 providers.50


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


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 treatments.53


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 settings.55


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 adolescents.57


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 centers.58

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 care programs.64


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 health.65


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, 2013 at
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.
7Visit 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 1.
10ACA §1302(b)(1).
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, available at (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).
33ACA§ 4103(b).
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 For 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, 5306.
62ACA § 5315.
63ACA § 5403(a).
64ACA § 5508.
65ACA § 10408.
66ACA § 2707.
67ACA § 10322(a).