Nearly 1 in 5 Americans experience mental illness each year, and many lack access to necessary services and treatment.
Cost is among the biggest barriers to accessing mental health care. An October 2022 Kaiser Family Foundation poll found adults were most likely to cite costs and insurance not covering mental health like physical health as “big problems.” A June 2022 Kaiser poll found unpaid bills for mental health services accounted for 20% of U.S. medical debt.
State lawmakers are pursuing various policy actions to ensure people have access to affordable mental health care. These actions include enforcing federal mental health parity requirements, expanding insurance coverage for behavioral health and applying surprise billing protections to mental health emergencies.
Mental Health Parity Requirements
Federal law prohibits private health insurers from imposing more stringent limitations on mental health and substance use benefits than they do on medical and surgical benefits. This is referred to as mental health parity, which addresses three aspects of insurance coverage:
- Financial requirements, such as deductibles and copayments.
- Quantitative treatment limits, such as the number of allowable visits or days of coverage.
- Non-quantitative treatment limits, such as prior authorizations, drug formulary design and provider networks.
States are largely responsible for enforcing mental health parity requirements for state-regulated health plans, such as Affordable Care Act marketplace plans. While state enforcement of financial and quantitative treatment requirements has generally proven to be effective, many reports find states struggle to identify and correct differences in non-quantitative treatment limits.
According to the Council of State Governments, at least 37 states had mental health parity statutes of varying scope as of July 2021, with 17 states enacting legislation bolstering mental health parity reporting and oversight since 2018. During the 2022 legislative session, Georgia required insurers to submit parity compliance reports to the department of insurance and established a streamlined process for reporting parity violations. Massachusetts required the insurance commissioner to conduct market examinations every four years and improved its processes for submitting and investigating consumer complaints. New Hampshire established reporting requirements specifically for non-quantitative treatment limits. Illinois has three separate statutes concerning mental health parity, which require parity across financial requirements; annual and lifetime maximums (the highest yearly or lifetime dollar amount a plan will pay for services); and annual and lifetime limits (highest yearly or lifetime number of inpatient or outpatient visits a plan will cover).
Behavioral Health Insurance Mandates
Beyond expanding mental health parity oversight, several states require health insurers to cover a broader range of behavioral and mental health services. At least four states—Colorado, Connecticut, Delaware and Massachusetts—have enacted legislation requiring private health plans to cover annual mental health wellness exams, similar to annual primary care visits, without patient cost-sharing.
At least four states—Louisiana, Massachusetts, New Jersey and Wyoming—enacted bills in 2022 and 2023 requiring private insurers to cover or reimburse for services provided through psychiatric collaborative care models. This integrated care model includes teams comprising primary care providers, psychiatric consultants and care managers coordinating a patient’s behavioral health needs.
New Mexico enacted the No Behavioral Health Cost Sharing Act in 2021, requiring private insurers to waive copays, coinsurance and deductibles for all behavioral health services through January 2027. The New Mexico superintendent of insurance issued a bulletin in 2021 listing standardized behavioral health benefits that must be covered without cost-sharing, including professional services, outpatient care, inpatient care, ancillary services and prescription drugs.
Surprise Billing Protections
States are also ensuring patients experiencing a mental health crisis are protected from surprise medical bills—when patients are unknowingly charged the difference between what the provider bills and the insurer pays. The federal No Surprises Act, which went into effect in 2022, protects consumers from surprise bills for emergency care, post-stabilization services and non-emergency care in in-network facilities. Federal regulators clarified that “emergency services” included mental health conditions, substance use disorders and services provided at behavioral health crisis facilities.
Many state legislators are conforming state surprise billing laws with federal requirements, exceeding federal protections, and establishing reimbursement methodologies for out-of-network behavioral health services. Georgia and Washington enacted legislation in 2022 to add mental health emergencies to their state surprise billing laws, as laid out in the No Surprises Act. California established surprise billing protections for services provided by a 988 Suicide and Crisis Lifeline center or mobile crisis team. Connecticut prohibited surprise bills and outlined reimbursement requirements for psychiatric services provided at an out-of-network crisis center.
Given that more than one-fifth of adults with mental health needs are unable to access affordable care, addressing the costs and coverage of mental health services has emerged as top legislative priority. From mental health parity to surprise billing protections, state legislators are likely to continue pursuing various strategies to improve mental health care affordability in 2023 legislative sessions.
Jack Pitsor was a research analyst in NCSL’s Health Program.
Supported by The Commonwealth Fund, a national, private foundation based in New York City that supports independent research on health care issues and makes grants to improve health care practice and policy. The views presented here are those of the author and not necessarily those of The Commonwealth Fund, its directors, officers or staff.