Countdown to Coverage: Choosing a Plan, Mental Health Benefits

  The Countdown To Coverage series continues with a look at an essential health benefit: coverage for mental health. We also share how consumers can be sure to choose a plan in the Health Insurance Marketplace that meets their needs.

Mental health benefits and the Affordable Care Act (ACA)

Access to behavioral health care is not just a matter of having health insurance; it also requires an adequate scope of covered benefits in a health plan.  For many years, benefits for Mental Health and Substance Use (MH/SU) services were not included in many health plans.  In addition, when an employer did chose to offer mental health care coverage as a part of the employer-sponsored plan, MH/SU conditions were typically capped at a much lower level of coverage than that for physical conditions.  As a result, people who needed MH/SU services either went without what their insurance did not cover, or were exposed to high costs if they accessed services beyond the coverage limits.  To reduce this disparity,  Congress passed the Wellston-Domenici Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008, that  requires that group health plans (with 51+ full-time employees) that choose to provide MH/SU benefits—and all Medicaid managed care plans—must ensure that the coverage for those benefits is no more restrictive than the coverage terms for medical/surgical services.

The ACA expands those federal “parity” provisions.  The essential health benefits (EHB) standard in the ACA raises the bar by requiring most health plans to cover MH/SU services, which will improve the opportunity for early intervention and continuous treatment for this vulnerable population.  Individual market and small employer plans in 2014 will all be required to meet new minimum standards for the benefits they cover.  Each plan must include a package of ten EHBs including mental health and substance abuse services; hospitalization; prescription drugs; rehabilitative and habilitative services; preventive and wellness services and chronic disease management; ambulatory patient services; emergency services; maternity and newborn care; laboratory services; and pediatric services, including oral and vision care.

The Marketplace plans must provide MH/SU benefits no more limited than their  medical benefits, as directed by MHPAEA.  Individuals and small groups in 2014 will be able to buy plans both inside and outside the Marketplace, and all coverage sold to individuals and small employers from that point forward must meet the EHB standards, whether inside or outside the exchange.  In short, these plans must provide MH/SU benefits equal to medical benefits.  Applying any limits to MH/SU benefits that are more restrictive than for medical benefits will be prohibited, including higher out-of-pocket financial requirements; more limited treatments; unequal use of preauthorization of services, fail-first policies, or  utilization reviews; or a narrower application of “medical necessity” definitions for MH/SU treatment.

The combined effect of ACA’s standards for Essential Health Benefits and the extension of MH/SU parity to private insurance plans in 2014 should significantly increase access to adequate treatment of these conditions for all insured persons.  In the process, it promises to reduce a lot of avoidable ER visits, and even some avoidable incarcerations.

Choosing a plan

Selecting a health care plan for you or your family can be intimidating, especially if this is your first time and/or you have a chronic condition such as mental illness.  As we have shared with you in our blog series, Countdown to Coverage, there is a lot to understand before you select a plan and for people who suffer from mental illness and substance use disorders, there are important things to consider when selecting a plan in the Marketplace.

Prior to the ACA, many health plans did not included coverage for mental health and substance abuse services or if they did, the benefits where less than those offered for physical conditions.  Also, insurance companies could flat-out deny coverage to those with pre-existing conditions like mental illness.  However, under the ACA, each plan in the Marketplace will have to provide core benefits, known as the essential health benefits, including mental health and substance abuse services and insurance companies can no longer deny coverage because of pre-existing conditions.

Most individuals who are uninsured will be able to gain coverage through the Marketplace, which will offer a variety of health insurance plans.  Plans will be presented in four tiers – bronze, silver, gold, and platinum – which makes it easy to compare plans.

The tier you choose affects how much your premium costs each month and your total out-of-pocket costs like copays and deductibles.  Individuals with chronic conditions generally visit the doctor more frequently and take more prescription medications, which means more out-of-pocket costs within a year.

When choosing your health plan, keep this in mind:

  1. The bronze, silver, gold, and platinum plans do not reflect the quality or amount of care the plans provide.
  2. All plans in all tiers will contain essential health benefits
  3. In general, the lower the premium, the higher the out-of-pocket costs when you need care; the higher the premium, the lower the out-of-pocket costs when you need care.  For example, the Bronze plan will generally have a lower premium but a higher out-of-pocket cost than a Silver plan.

Written by: Katharine Ligon, Center for Public Policy Priorities. Cross-posted from Better Texas blog.