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August 18, 2014
by Cathy England, MA

Mental Health Care Coverage: New Laws and Remaining Problems

August 18, 2014 02:55 by Cathy England, MA

Days Gone By

In the not too distant past, there was a lot of difficulty for individuals needing to access mental health care services.  Many health insurance companies treated mental health as a separate and unequal health issue compared with medical health problems.  This made it difficult for the mentally ill to get adequate treatment, and to be able to afford that treatment when it was needed.  In the last few years, those laws have begun to change, and mental illness is now considered to be equal in regard to insurance as is physical illness.  In practice however, there may still be some existing problems.

There are still groups of individuals who are not receiving adequate mental health care interventions, and this has been studied according to ethnicity and insurance status by Kataoka, Zhang, and Wells (2002).  In this study it was found that children and adolescents especially suffered these disparities.  The authors found that approximately one in five in this population has a mental illness.  However, the numbers at that time were sobering in regard to how those individuals were being treated.  This particularly applied to minority youth and uninsured youth.  The study found that some of these trends were also found in adult populations.  It is important to note as the authors pointed out, that depressed children are at increased risk for future suicidal actions, problems with school performance, and substance use problems.  According to the authors of the study, prevention and early intervention were the best options.  However, at that time, legislation was not in place to ensure that these services would be available.  

New Laws, No Distinction

Before parity laws were in place, a health insurance company could make a distinction between mental health treatment and physical health treatment.  This meant that co-pays and deductibles may have been prohibitively high or that there could be limits placed on the number of visits allowed, or could limit inpatient and outpatient treatment (Substance Abuse and Mental Health Services Administration, (n.d.).  Discrimination against the mentally ill and those with substance use issues was fairly commonplace.  This made such treatment cost prohibitive and many individuals went without treatment out of a lack of ability to pay.  Additionally, when parity laws did come into existence, they were generally regulated at the state level, and problems still existed.

In 2010, comprehensive parity legislation began to happen across the country.  The goal of more stringent parity regulations was to eliminate this gap in treatment.  According to the new laws, there could no longer be separate treatment for mental health/substance abuse treatment and treatment of medical or surgical issues (The Guide to Community Preventative Services, n.d.).  The coverage of these problems should no longer be separate.  The affordable care act of 2014 expanded on this law, and moved it to a federal requirement (Substance Abuse and Mental Health Services Administration, n.d.).  This is a law that applies to companies providing coverage for more than 50 employees.  

An Improvement?

Mark, Vandivort-Warren and Miller (2012) made special note of the improvement in inpatient and outpatient coverage which had been a real problem previously.  Many insurance providers were concerned that this type of legislation would significantly raise their costs, but this has not been proven to be the case (The Guide to Community Preventative Services, n.d.).  According to information provided by the United States Department of Labor (n.d.), this does not mean that insurance companies have to provide coverage for mental health or substance use treatment.  It only means that if they do offer that coverage, it must be covered equally with no distinction.

Parity laws also make it imperative for companies to provide justification and information to consumers if treatment is declared to be medically unnecessary.  Individuals need to be educated about their rights when it comes to parity laws.  After years of not being adequately covered, there is still some confusion about what those rights are.  It is also not clear that enforcement is capable of catching those providers who are not following the new laws.  Patients are well advised to research the ways that they can pursue equal treatment in regard to mental health and substance abuse.  Organizations such as the National Institutes of Mental Health (NAMI) can be a great resource in these instances.

Making Strides

Parity laws have made great strides toward ensuring non-discrimination based on medical need.  However, as mentioned before, there is no mandate that insurance companies even provide treatment for mental health and substance abuse treatment.  This may be something that is expanded upon in the future so that more people are receiving the medically necessary treatment that they need.


Kataoka, S. H., Zhang, L., & Wells, K. B. (2002). Unmet need for mental health care among U.S. children: Variation by ethnicity and insurance status. The American Journal of Psychiatry, 159(9), 1548-55.

Mark, T. L., Vandivort-Warren, R., & Miller, K. (2012). Mental health spending by private insurance: Implications for the mental health parity and addiction equity act. Psychiatric Services, 63(4), 313-8.

Substance Abuse and Mental Health Services Administration (n.d.). Mental health parity and addiction equity. Retrieved from

The Guide to Community Preventive Services (n.d.). Improving mental health and addressing mental illness: Mental health benefits legislation. Retrieved from

United States Department of Labor (n.d.). Mental Health Parity. Retrieved from

About the Author

Cathy England, MA Cathy England, MA

Cathy England holds a Master’s degree in Psychology and has 13 years of work experience in counseling and social work. Cathy is an advocate for mental health awareness and enjoys educating people about mental health and the ways that it impacts people and communities.

Cathy England, MA can be found at
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