Mental health services have been one significant part of medical care for a number of years. The costs, coverage and availability of such services have been the object of policy discussions and a variety of state legislation. There is not a uniform consensus about the extent to which state government should require coverage for mental health. Since the passage of federal health reform (ACA or PPACA) there is a larger role for the federal government and federal-state coordination, described below. For now, all states and D.C. have some type of enacted law but these laws vary considerably and can be divided roughly into three categories:
1. Mental Health "Parity" or Equal Coverage Laws
Parity, as it relates to mental health and substance abuse, prohibits insurers or health care service plans from discriminating between coverage offered for mental illness, serious mental illness, substance abuse, and other physical disorders and diseases. In short, parity requires insurers to provide the same level of benefits for mental illness, serious mental illness or substance abuse as for other physical disorders and diseases. These benefits include visit limits, deductibles, copayments, and lifetime and annual limits.
Parity laws contain many variables that affect the level of coverage required under the law. Some state parity laws--such as Arkansas'--provide broad coverage for all mental illnesses. Other state parity laws limit the coverage to a specific list of biologically based or serious mental illnesses. The state laws labeled full parity below provide equal benefits, to varying degrees, for the treatment of mental illness, serious mental illness and biologically based mental illness, and may include treatment for substance abuse. The newly enacted federal parity law affects insurance policies that already provide some mental health coverage; there is no federal law directly mandating parity to the same extent as state laws; also see background on unsuccessful federal parity legislation below the state table.
2. Minimum Mandated Mental Health Benefit Laws
Many state laws require that some level of coverage be provided for mental illness, serious mental illness, substance abuse or a combination thereof. They are not considered full parity because they allow discrepancies in the level of benefits provided between mental illnesses and physical illnesses. These discrepancies can be in the form of different visit limits, copayments, deductibles, and annual and lifetime limits. Some mental health advocates believe these laws offer a compromise to full parity that at least provides some level of care. Others feel that anything other than full parity is discrimination against the mentally ill. Some of these laws specify that copayments and deductibles must be equal to those for physical illness up to the required level of benefits provided. If a law does not specify, the copayment could be as much as 50 percent of the cost of the visit and require a separate deductible to be met before mental health visits will be covered.
3. Mental Health "Mandated Offering Laws"
Mandated offering laws differ from the other two types of laws in that they do not require (or mandate) benefits be provided at all. A mandated offering law can do two things. First, it can require that an option of coverage for mental illness, serious mental illness, substance abuse or a combination thereof, be provided to the insured. This option of coverage can be accepted or rejected and, if accepted, will usually require an additional or higher premium. Second, a mandated offering law can require that if benefits are offered then they must be equal.
"Essential Health Benefits" (EHB) as provided for in the Affordable Care Act (ACA) see NCSL explanation online
*Exceptions to Mandate Laws – “Barebones” Policies
Note that some state laws apply primarily to "serious mental illness" and may not assure coverage for particular individual diagnoses or circumstances. Many private market health plans include some type of mental health benefits on a voluntary commercial basis, not necessarily required by state or federal laws. Note that grief counseling may not be considered a covered benefit under some state laws, although it may be offered by insurers as part of a standard mental health benefit package. Laws in at least 38 states include coverage for substance abuse, alcohol or drug addiction.
Beyond Coverage: What are State Roles?
There are numerous aspects of mental health and substance abuse that garner attention from state policymakers. The following are links to NCSL reports and articles related to these subjects:
- Mental Health Professionals' Duty to Warn -Doctors are responsible for maintaining confidentiality of patient information based on the ethical standards of their profession. However, In an effort to protect potential victims from a patient’s violent behavior many states have passed "duty to warn" laws. These laws impose a duty on psychotherapists to warn third parties of potential threats to their safety. Published by NCSL, January 2013.
Mental Health Benefits in the Affordable Care Act (ACA) of 2010
Federal health reform, also termed the PPACA or just ACA, contains a number of provisions which achieve two goals with respect to mental health parity:
(1) they expand the reach and applicability of the federal mental health parity requirements; and
(2) they create an "essential health benefit" or mandated benefit for the coverage of mental health and substance abuse disorder services in a number of specific insurance financing arrangements. According to a December 2011 report by the Congressional Research Service (CRS), the ACA expands the reach of federal mental health parity requirements to three main types of health plans:
- Qualified health plans as established by the ACA.
- Medicaid non-managed care benchmark and benchmark-equivalent plans.
- Plans offered through the individual market.
The ACA did not alter the federal mental health parity requirements with respect to CHIP plans, but the application of the requirements to CHIP plans, as required in law prior to the ACA, is explained here in detail. This report also analyzes the impact of the ACA on the existing small employer exemption under federal mental health parity law.
April 2015: Medicaid Rule Proposed On Providing Mental Health ‘Parity’
A "The federal law that passed in 2008 was supposed to ensure that when patients had insurance benefits for mental health and addiction treatment, the coverage was on par with what they received for medical and surgical care. But until 2015, the government had only spelled out how the law applied to commercial plans."
That changed April 7, 2015, when federal officials released a long-awaited rule [Federal Register link] proposing how the parity law should also protect low-income Americans insured through the government’s Medicaid managed care and the Children’s Health Insurance Program (CHIP) plans. The proposed regulation is similar to one released in November 2013 for private insurers. “Whether private insurance, Medicaid, or CHIP, all Americans deserve access to quality mental health services and substance use disorder services,” said Vikki Wachino, acting director at the Center for Medicaid and CHIP Services. [Read full article, by Kaiser Health News, 4/7/2015.
Federal CMS Guidance Regarding Mental Health Parity Requirements in CHIP, Medicaid and Group Insurance
The Federal Centers for Medicare & Medicaid Services (CMS) issued a State Health Official letter on November 4, 2009 regarding the mental health parity requirements under the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA). The letter provides general guidance on implementation of section 502 of CHIPRA, Public Law 111-3, which imposes mental health and substance use disorder parity requirements on all Children’s Health Insurance Program (CHIP) State plans under title XXI of the Social Security Act (the Act). This letter also provides preliminary guidance to the extent that mental health and substance use disorder parity requirements apply to State Medicaid programs under title XIX of the Act.
In summary the letter addresses specific requirements in the measure as follows:
- Qualifying financial requirements and treatment limitations applied to mental health or substance use disorder benefits may be no more restrictive than those applied to medical surgical benefits.
- No separate qualifying criteria may be applied to mental health or substance use disorder benefits.
- When out-of-network coverage is available for medical surgical benefits, it must also be available for mental health or substance use disorder benefits.
Medicaid and Group Health Insurance:
Requirements from the Paul Wellstone and Pete Dominici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) became effective for group health insurance plans on October 3rd of 2009. These same requirements will only apply to Medicaid insofar as the state’s Medicaid agency contracts with one or more managed care organizations (MCOs) or Prepaid Inpatient Health Plans (PIHPs). In these cases the MCOs or PIHPs must be in compliance. A state Medicaid plan is not subject to these requirements otherwise. The MHPAEA applies to all CHIP programs and became effective April 1 of 2009. State CHIP plans are deemed in compliance if they provide coverage of Early and Periodic, Screening, Diagnosis and Treatment (EPSDT) benefits.
States Requiring Legislative Action for Compliance
The letter also specifies that if a state requires legislation in order to be in compliance with the requirements, a state will not be found to be in violation before its next legislative session as long as it notifies the Secretary of HHS and she concurs that legislation is needed. They ask that states in the circumstances submit a letter to the Center for Medicaid and State Operations to that effect as soon as possible and include information as follows:
- the provisions in question,
- the reason the state requires legislative action for compliance, and
- the date the state will begin implementing the provision.
Expanded Mental Health Coverage Rules - November 2013
In a move aimed at boosting mental health treatment, Health and Human Services Secretary Kathleen Sebelius on Nov. 8, 2013 announced new rules that put teeth in the 2008 mental health equity law. The Mental Health Parity and Addiction Equity Act, signed by President George W. Bush, requires doctors and insurers to treat mental illness the same as physical illness. Sebelius made the announcement to applause at the Rosalynn Carter Symposium on Mental Health Policy in Atlanta. The move "finally puts mental health and behavioral health on equal footing," Sebelius said.
On paper, the law made mental health more accessible, but there has been virtually no enforcement of it, said Dr. Jeffrey Lieberman, president of the American Psychiatric Association and a Columbia University psychiatrist. "Up to now, the law has not been complied with," Lieberman said. "Companies have only sort of adhered to it." Insurance companies often cover mental illness in a more limited fashion than physical illness. Now the rule will require insurers to charge similar co-payments regardless if the treatment is for physical or mental health. Deductibles and doctor visits would also be equitable, and there would be parity in outpatient services and residential treatment.
"Many private insurers gave nothing. Some provided benefits, but they were limited and inadequate," Lieberman said. The law, the new rules and provisions of Obamacare combined will ensure mental and physical illness would be covered similarly. America's Health Insurance Plans (AHIP), the professional association that represents the health insurance industry, said it has long supported the act and has worked to implement its requirements in an affordable and effective way. [Read article CNN 11/8/2013]
Federal Parity Amendment
In 1996 a federal parity amendment was signed into law as part of the VA-HUD appropriations bill. The law, otherwise known as the Mental Health Parity Act of 1996 (Public Law 104-204), prohibits group health plans that offer mental health benefits from imposing more restrictive annual or lifetime limits on spending for mental illness than are imposed on coverage of physical illnesses. This law expired on September 30, 2001 due to a "sunset" provision, but was extended through December 31, 2002 when President Bush signed Public Law 107-116. The Mental Health Parity Act of 1996 offers limited parity for the treatment of mental health disorders. The statute does not require insurers to offer mental health benefits, but states that if mental health coverage is offered, the benefits must be equal to the annual or lifetime limits offered for physical health care. It also does not apply to substance use disorders, and businesses with fewer than 26 employees are exempt..
State Laws and Separate Federal Requirements: The state laws noted below generally do not apply to federally funded public programs such as Medicaid, Medicare, the Veterans Administration, etc. In addition, "self-funded" health insurance plans, often sponsored by the largest employers, usually are entirely exempt from state regulation because they are preempted by the federal ERISA law.
> ARCHIVE NOTE: Some of the individual state statute summaries and links are a "snapshot" of enacted state legislation, and may not reflect more recent amendments, nor the latest interaction between state mandates and the federally-approved Essential Health Benefits (EHB) for each state. Until an update is completed, this table is useable as an historical record, not as a legal source of current requirements.
See ERISA and the States, a 2015 online resource guide by NCSL.
Parity Implementation National Survey
In 2015-17 the nonprofit Kennedy Forum sponsors a web-based tool, Parity Track, that provides further details on individual state laws, regulations, pending bills and implementation. Examples below indicated with ##. (NCSL is not responsible for the contents or opinions contained on thrird-party websites.)
[Link updated 5/30/2017]
The box allows you to conduct a full text search or type the state name.
Notes for state mental health statute table
A) The Diagnostic and Statistics Manual of the American Psychiatric Association (DSM) includes universally accepted definitions and descriptions of mental illnesses and conditions. There are 13 DSM diagnoses commonly referred to as biologically-based mental illnesses by mental health providers and consumer organizations. Between 3 and 13 of these diagnoses are referred to in various state parity laws. For example, in Alabama, mental illness is defined as: 1) schizophrenia, schizophrenia form disorder, schizo-affective disorder; 2) bipolar disorder; 3) panic disorder; 4) obsessive-compulsive disorder; 5) major depressive disorder; 6) anxiety disorders; 7) mood disorders; 8) Any condition or disorder involving mental illness, excluding alcohol and substance abuse, that falls under any of the diagnostic categories listed in the mental disorders section of the International Classification of Disease, as periodically revised.
B) NAIC Mental Illness Treatment tally. The National Association of Insurance Commissioners listed 46 states with mandated requirements, not mentioning AK, AZ, MI and WY, as of February 2008.
C) Examples of "Barebones" exception laws:
- Colorado H 1164
- Texas S 541 of 2003
- Montana H 384 of 2003
MT law allowed small employers to purchase a basic health benefit plan that does not include mental health and substance abuse treatment mandates. allows insurers and HMOs to offer policies without mandates for the treatment of mental illness and chemical dependency, with an exception for serious mental illnesses if the plan is issued to a large employer. An insurer that offers such policy must also offer at least one policy with state-mandated health benefits. allows for a 12-month demonstration project that in some cases, permits a limited coverage plan or managed care plan without mandates for mental illness
9-11: Terrorism Impacts on Mental Health
The events of September 11, 2001 and related bio-terrorism scares had a profound effect on Americans in every part of the United States. In 2003, the war with Iraq brought the potential for new psychological and mental health concerns, according to the American Psychological Association. Yet the issues raised have been a part of health policy for more than two decades.
The nation, through the actions of federal, state and local governments, and citizens in innumerable roles, united and moved forward. However, the medical traumatic effects of those events impacted many people, for months or even years. USA Today reported it this way: "The terrorist strikes and their devastating aftermath are triggering the largest mental health challenge ever faced by employers and straining the USA's army of grief counselors, not just at the attack sites but in workplaces across the country. The emotional fallout was expected to be so widespread that some health insurers are loosening restrictions on employees' use of mental health services." The impact could be far larger than the numbers directly affected. For example, just in Arlington County, Virginia, "some 20,000 to 40,000 of the county's 200,000 residents could experience a traumatic stress reaction from the attacks, officials estimate, pointing to an earlier Surgeon General's report on mental health and disasters."
Mental Health Benefits and Hurricane Katrina Victims
The widespread harm inflicted by Hurricane Katrina includes health impacts and longer-term mental and emotional harm. People who are displaced, injured, have lost loved ones, homes, property, belongings, jobs, family stability, pets, and those with friends, relatives or coworkers affected, may need or seek counseling and medical help. Some, but not all, of the varying state health insurance mandate laws may require coverage of either emergency or longer-term mental health services.
The list below is a general survey of these laws. It provides a quick comparison among states, but it is not intended as a consumer guide to services, since coverage varies even further based on employer and individual contracts, including services offered above or beyond the minimum required by state law. Also public programs including Medicaid, Medicare, local health departments have separate standards of coverage - sometimes more extensive -- than private market health policies.
Expert Sources and Reports
Two new resources from the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured explore key aspects of mental health care financing and access. Medicaid plays an important role in financing mental health services in the United States and will play a key role in ensuring access to behavioral health services under the health reform law.
Mental Health Financing in the United States: A Primer, provides an overview of behavioral health care, reviews the sources of financing for such care, assesses the interaction between different payers and highlights recent policy debates in mental health. It also discusses the role of Medicaid, currently the largest source of financing for behavioral health services in the nation, covering a quarter of all expenditures. This comprehensive resource serves as a guide for those who want to understand the complex system of behavioral health financing in the United States.
Medicaid Policy Options for Meeting the Needs of Adults with Mental Illness under the Affordable Care Act, examines the salient issues raised in a recent roundtable discussion of national and state experts convened by the Commission, in partnership with the Bazelon Center for Mental Health Law, to discuss Medicaid policy options available under health reform to help meet the needs of adults with mental illness. The Patient Protection and Affordable Care Act will expand the Medicaid program, offering the opportunity to improve access to care for millions of Americans with mental health disorders. States face several decisions about designing benefits, structuring service delivery and conducting outreach and enrollment for this population, which has unique health and social service needs. This report highlights key policy opportunities and challenges related to these decisions. The discussion was the latest in an ongoing series of Health Reform Roundtables that explore key issues related to implementing the expansion of Medicaid under health reform.
Footnotes from table
[i] Does not include mental retardation, learning disorders, communication disorders, relational disorders, motor skills disorder, caffeine-related disorders, etc.
[ii] Does not apply to benefits for treatment of substance abuse, chemical dependency or gambling addiction.
[iii] A health plan that experiences a greater than 2% increase in costs pursuant to providing treatment for severe mental illness is exempt from requirement.
[iv] Does not cover mental retardation, motor skills disorders or communication disorders.
Authors: Richard Cauchi, program director, Karmen Hanson, program manager, NCSL Health Program, Denver. Previous years research by Steven Landess and Andrew Thangasamy, staff researchers.