Econ Focus

Second Quarter 2013

Health in Mind

Why mental illness is one of the hardest social welfare problems to solve

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How Health Care Reform Changes Mental Health Care

The Mental Health Parity and Addiction Equity Act, which went into effect in 2010, requires work-based health plans to treat mental health treatment the same as other treatments, without lifetime limits on coverage or extra costs. But it applies only to companies with 50-plus employees that provide mental health and substance abuse coverage. The law doesn't require those employers to make those treatments part of their plans, and only 85 percent do, according to the Society for Human Resource Management. For policies purchased by individuals, only some states require coverage of mental health.

That will change in 2014 under the Affordable Care Act, commonly known as "Obamacare." Mental health disorder services are included in the set of "essential" benefits that must be covered by insurance policies offered through state-based exchanges and Medicaid. Still, this applies only to plans purchased by small employers and individuals. Additionally, young adults can remain on their parents' coverage until age 26.

Furthermore, states that agree to expand Medicaid under Obamacare will expand the number of low-income people to whom mental health services are available, since Medicaid covers it. Of the 32 million people that are estimated to get new health coverage in 2014, the Substance Abuse and Mental Health Services Administration estimates that 6 million to 10 million have untreated mental illnesses or addiction.

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