Mental health benefits legislation

There is strong evidence that mental health benefits legislation that includes parity requirements increases access to care for mental health conditions (CG-Mental health, Hall 2023b, Burns 2020, Mulvaney-Day 2019, Haffajee 2019, Li 2020d, Block 2020, Friedman 2017, Harwood 2017) and reduces costs to patients (CG-Mental health, Haffajee 2019, Kennedy-Hendricks 2018, Ettner 2016, Busch 2013, Barry 2013, McConnell 2013). More comprehensive parity laws yield stronger effects (Haffajee 2019, CG-Sipe 2015, Wen 2013).

Mental health benefits legislation that includes parity requirements has been shown to modestly increase diagnostic and therapy visits for behavioral health care (Harwood 2017), and applying parity requirements to Medicaid can increase use of outpatient and inpatient mental health care and prescription medications for mental health conditions (Burns 2020). Such laws can also increase access to outpatient (Mulvaney-Day 2019, Friedman 2017) and inpatient care for patients diagnosed with substance use disorder (Friedman 2017). A study of the dual impact of the Mental Health Parity and Addiction Equity Act (MHPAEA) and the Affordable Care Act (ACA) suggests they may reduce rates of severe morbidity among birthing people, particularly those with perinatal mood and anxiety disorders (Hall 2023b).

Parity laws can reduce suicide rates and prevalence of poor mental health for patients receiving treatment for mental health conditions (CG-Mental health, Solomon 2022), including among college-aged students; reductions in poor mental health days appear to be greater among female students (Solomon 2022). Parity laws have also been shown to increase the use of specialty behavioral health care services for children (Block 2020), including children with autism spectrum disorder (Stuart 2017). A study based on national data suggests greater exposure to comprehensive parity laws in childhood and adolescence reduces the need for mental health visits in adulthood, perhaps by ensuring greater access to needed care at an earlier age (Heboyan 2021).

Parity laws improve financial protection for patients (CG-Mental health, CG-Sipe 2015, Haffajee 2019, Ettner 2016), including families of children receiving care (Kennedy-Hendricks 2018). Such laws reduce out-of-pocket spending for patients, including high utilizers of mental health services (Haffajee 2019), patients with bipolar disorder, major depression, and adjustment disorders (Busch 2013), families whose children have the highest cost for mental health care (Barry 2013), and mental health and substance abuse treatment for adults with severe mental illness (McConnell 2013). In some cases, however, individuals diagnosed with substance use disorder may experience a modest increase in out-of-pocket spending (Friedman 2017). Children with autism spectrum disorder (Stuart 2017) and adults with health insurance through large employers appear to experience no change in total out-of-pocket costs following parity implementation, even with increases in service use (Harwood 2017).

Overall, mental health parity requirements do not appear to significantly increase insurers' annual cost per health plan member (CG-Jacob 2015, CG-Mental health). An Oregon-based study, however, saw insurer spending for patients with severe mental illness increase post-parity (McConnell 2013), and a study of children’s access to behavioral health services found increased total per-member-per-month costs (Block 2020). Studies of one of the largest managed behavioral health organizations in the U.S. indicate cost shifting from patients to plans (Ettner 2016) of approximately $1.05 per enrollee (Harwood 2017). Parity requirements for substance use disorder services appear to cause a modest increase in health plan spending (Friedman 2017, Busch 2014).

Experts suggest an ongoing need to monitor insurer compliance with the parity requirements of the federal MHPAEA and other parity laws (Knopf 2022, Berry 2017) and recommend using clear definitions of mental health conditions based on current diagnosis standards in legislation (Heboyan 2021). Additional reform is needed to expand access to substance use disorder treatment and ensure coverage amounts are based on evidence-based practices (Dickson-Gomez 2022).

It is unclear what impact mental health benefits legislation may have on disparities in access to mental health care and mental health outcomes among diverse groups. Available evidence suggests implementing mental health benefits parity through public insurance (i.e., Medicaid and Medicare) can increase access to mental health care for individuals with low incomes (Fung 2023, Burns 2020), but individuals from racially and ethnically minoritized groups may not experience the same benefits (Fung 2023). A national study suggests that when parity laws require private health plans to cover alcohol treatments, treatment rates may increase more for Hispanic patients than white or Black patients (Mulia 2019).

Disparities in mental health outcomes exist in the U.S. within racially, ethnically (Sharifian 2024), gender (Mongelli 2020), and geographically (McCarthy 2024) diverse civilian populations, as well as among service members and veterans, compared with those at less risk because of their identity, military service status (Sharifian 2024), or community type (McCarthy 2024). Mental health conditions are far more common in groups who have been historically marginalized and minoritized by society; for example, individuals with multi-racial backgrounds or those that are LGBTQ+ are more likely to experience mental illness (APA-MH Disparities fact sheet, APA-MH LGBTQ fact sheet). Even with parity legislation to mandate mental health coverage equal to that of physical health coverage, challenges in meeting the mental health needs of populations who have been under-resourced and disenfranchised remain (Fung 2023, Heboyan 2021, Maxwell 2020, Lawrence 2020). Limited cultural competency among health care and mental health care providers can lead to misdiagnosis or underdiagnosis of mental health conditions in diverse populations due to language barriers, different cultural presentations of symptoms, mental illness stigma, and distrust of the health care system (APA-MH Disparities fact sheet). Additionally, there are not enough mental health providers, and those who are practicing are less likely to be in rural and under-resourced urban areas, and they may choose not to accept patients with Medicare or Medicaid benefits (Carlo 2020, Peterson 2018a).

Parity laws alone cannot overcome systemic issues that prevent adequate access to mental health care for people from racially and ethnically minoritized groups, individuals with low incomes, and other socio-economically disadvantaged populations (Fung 2023, Heboyan 2021, Maxwell 2020, Lawrence 2020).

Additionally, insurers may impose limits not addressed by parity, such as setting separate copayments and deductibles, disproportionately burdening families and individuals with lower incomes (Maxwell 2020). The legal complexity of how parity applies may also prevent those with less education, lower incomes, or less trust in the legal system from identifying wrongful denial of claims and pursuing legal complaints (Lawrence 2020).

Mental health conditions and neurodiversity have long been stigmatized by society, seen as a source of shame for both the individuals who suffer from it and their families (Ahad 2023). Mental illness was typically viewed as a moral or spiritual failing (NLM-Psychiatric timeline); people with mental health conditions were regarded as a burden and ignored or minimized at best. However, individuals with more severe issues were locked in asylums and kept from greater society, where treatments were often brutal, and almost always ineffective (PBS American Experience-Mental illness). The system could also be exploited, and those who stepped outside the bounds of society could be subjected to cruelty and incarceration in asylums, and later institutions (CSP-Mental illness).

While society’s understanding of and treatments for mental health have evolved over time, stigma around mental health conditions remains common in many communities (Ahad 2023). Stigma against mental health and substance use disorders, as well as distrust of the mental health care system, may prevent those who need help from seeking care, even if it is covered by their insurance (Heboyan 2021, Carlo 2020). In western cultures, including the U.S., there are often assumptions about individuals with mental health conditions, such as the mistaken belief that they are unpredictable or dangerous, contributing to discrimination and social exclusion (Ahad 2023), and reducing options for work, education, housing, and social connections (APA-Stigma).

The National Institute of Mental Health was established in 1949 to research the mind, brain, and behavior as a way to reduce mental illness (PBS American Experience-Mental illness). Mental health care coverage was still not a standard part of insurance coverage, although following World War II some insurers began covering a limited amount of hospital-based psychiatric care (Barry 2010). In the 1970s and 1980s, some state legislatures passed mandated benefits laws for private insurance, establishing minimum benefits for mental health and/or substance abuse disorders (Barry 2010).

Legislation to establish insurance coverage parity for physical health and mental health conditions began appearing with the 1996 Mental Health Parity Act, though it excluded addiction related treatments (Druss 2018), and many state governments passed additional, stricter mental health parity laws for private insurance in the late 1990s and early 2000s (Douglas 2024, Solomon 2022). The 2008 Mental Health Parity and Addiction Equity Act (MHPAEA) expanded federal parity requirements and the Affordable Care Act (ACA) extended them further, along with the declaration that care for mental health and substance use disorders is an essential health benefit (CMS-CCIIO-MHPAEA, Douglas 2024, Peterson 2018a).

In September 2024, new final rules were released by the U.S. Departments of Health and Human Services, Labor, and the Treasury to further the fundamental purpose of the MHPAEA and ensure full equity in health insurance coverage for mental health conditions and substance abuse disorders (CMS-CCIIO-MHPAEA).

• Who has access to mental health services in your community and who does not? Are there local efforts or programs that emphasize the importance of mental health care and reducing stigma associated with mental health conditions and substance use disorders?
• Is there guidance available to teach patients about mental health coverage through their insurance? What partnerships (e.g., primary care clinics, employers, community organizations) could be established to increase knowledge?
• How are health care providers, community members, and policymakers engaged in oversight efforts to ensure parity is properly applied by health insurers?

As of January 2019, 49 states have mental health insurance parity laws, some more comprehensive than federal parity laws (Douglas 2024). The 2010 Affordable Care Act (ACA) named coverage of mental health and substance use treatment as one of the ten essential health benefits; all plans in the individual and small employer market must include this treatment coverage (CMS-CCIIO-MHPAEA), extending the benefits of the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) which required this coverage for large group employers, the Children’s Health Insurance Program (CHIP) and Medicaid managed care organizations (MCOs) (Medicaid-MHPAEA). Large, self-funded non-federal governmental employers that self-insure are exempt from state insurance mandates (CMS-CCIIO-MHPAEA).

The U.S. Department of Labor (U.S. DOL), Employee Benefits Security Administration offers tools and resources about using mental health and substance use disorder benefits, why claims may be denied and how to file an appeal, where to access treatment services, and guidance for families and caregivers (US DOL-Parity).

CMS-CCIIO-MHPAEA - Centers for Medicare & Medicaid Services (CMS), The Center for Consumer Information & Insurance Oversight (CCIIO). The Mental Health Parity and Addiction Equity Act (MHPAEA).

Medicaid-MHPAEA - Medicaid.gov. Mental Health Parity and Addiction Equity Act (MHPAEA). Parity toolkit, roadmap, and resources.

US DOL-Parity - Employee Benefits Security Administration. Mental health and substance use disorder parity: Protection of mental health and substance use disorder benefits. U.S. Department of Labor (U.S. DOL).

* Journal subscription may be required for access.

Ahad 2023 - Ahad, A. A., Sanchez-Gonzalez, M., & Junquera, P. (2023). Understanding and addressing mental health stigma across cultures for improving psychiatric care: A narrative review. Cureus, 15(5), e39549

APA-MH Disparities fact sheet - American Psychiatric Association. (2017). Mental health disparities: Diverse populations [Factsheet].

APA-MH LGBTQ fact sheet - American Psychiatric Association. (2017). Mental health disparities: LGBTQ [Factsheet].

APA-Stigma - American Psychiatric Association. (2024). Stigma, prejudice and discrimination against people with mental illness.

Barry 2010 - Barry, C. L., Huskamp, H. A., & Goldman, H. H. (2010). A political history of federal mental health and addiction insurance parity. The Milbank Quarterly, 88(3), 404–433.

Barry 2013 - Barry CL, Chien AT, Normand S-LT, et al. Parity and out-of-pocket spending for children with high mental health or substance abuse expenditures. Pediatrics. 2013;131(3):e903-e911.

Berry 2017* - Berry KN, Huskamp HA, Goldman HH, Rutkow L, Barry CL. Litigation provides clues to ongoing challenges in implementing insurance parity. Journal of Health Politics, Policy and Law. 2017;42(6):1065-1098.

Block 2020* - Block, E. P., Xu, H., Azocar, F., & Ettner, S. L. (2020). The mental health parity and addiction equity act evaluation study: Child and adolescent behavioral health service expenditures and utilization. Health Economics, 29(12), 1533–1548.

Burns 2020* - Burns, M. E., Dague, L., Saloner, B., Voskuil, K., Kim, N. H., Serna Borrero, N., & Look, K. (2020). Implementing parity for mental health and substance use treatment in Medicaid. Health Services Research, 55(4), 604–614.

Busch 2013 - Busch AB, Yoon F, Barry CL, et al. The effects of mental health parity on spending and utilization for bipolar, major depression, and adjustment disorders. The American Journal of Psychiatry. 2013;170(2):180-187.

Busch 2014 - Busch SH, Epstein AJ, Harhay MO, et al. The effects of federal parity on substance use disorder treatment. The American Journal of Managed Care. 2014;20(1):76-82.

Carlo 2020* - Carlo, A. D., Barnett, B. S., & Frank, R. G. (2020). Behavioral health parity efforts in the U.S. JAMA, 324(5), 447.

CG-Jacob 2015 - Jacob V, Qu S, Chattopadhyay S, et al. Economic effects of legislations and policies to expand mental health and substance abuse benefits in health insurance plans: A Community Guide systematic review. The Journal of Mental Health Policy and Economics. 2015;18(1):39-48.

CG-Mental health - The Guide to Community Preventive Services (The Community Guide). Mental health.

CG-Sipe 2015 - Sipe TA, Finnie RKC, Knopf JA, et al. Effects of mental health benefits legislation: A Community Guide systematic review. American Journal of Preventive Medicine. 2015;48(6):755-766.

CMS-CCIIO-MHPAEA - Centers for Medicare & Medicaid Services (CMS), The Center for Consumer Information & Insurance Oversight (CCIIO). The Mental Health Parity and Addiction Equity Act (MHPAEA).

CSP-Mental illness - Concordia University St. Paul (CSP). (2020, July 13). A history of mental illness treatment: Obsolete practices.

Dickson-Gomez 2022* - Dickson-Gomez, J., Weeks, M., Green, D., Boutouis, S., Galletly, C., & Christenson, E. (2022). Insurance barriers to substance use disorder treatment after passage of mental health and addiction parity laws and the affordable care act: A qualitative analysis. Drug and Alcohol Dependence Reports, 3, 100051.

Douglas 2024* - Douglas, M. D., Corallo, K. L., Moore, M. A., DeWolf, M. H., Tyus, D., & Gaglioti, A. H. (2024). Changes in state laws related to coverage for substance use disorder treatment across insurance sectors, 2006–2020. Psychiatric Services, 75(6), 543–548.

Druss 2018* - Druss, B. G., & Goldman, H. H. (2018). Integrating health and mental health services: A past and future history. American Journal of Psychiatry, 175(12), 1199–1204.

Ettner 2016* - Ettner SL, Harwood JM, Thalmayer A, et al. The Mental Health Parity and Addiction Equity Act evaluation study: Impact on specialty behavioral health utilization and expenditures among “carve-out” enrollees. Journal of Health Economics. 2016;50:131-143.

Friedman 2017 - Friedman S, Xu H, Harwood JM, et al. The Mental Health Parity and Addiction Equity Act evaluation study: Impact on specialty behavioral healthcare utilization and spending among enrollees with substance use disorders. Journal of Substance Abuse Treatment. 2017;80:67-78.

Fung 2023* - Fung, V., Price, M., McDowell, A., Nierenberg, A. A., Hsu, J., Newhouse, J. P., & Cook, B. L. (2023). Coverage parity and racial and ethnic disparities in mental health and substance use care among Medicare Beneficiaries: Study examines coverage parity for outpatient mental health and substance use care among Black, Hispanic, Asian, and American Indian/Alaska Native versus White Medicare beneficiaries. Health Affairs, 42(1), 83–93.

Grazier 2016* - Grazier KL, Eisenberg D, Jedele JM, Smiley ML. Effects of mental health parity on high utilizers of services: Pre-post evidence from a large, self-insured employer. Psychiatric Services. 2016;67(4):448-451.

Haffajee 2019* - Haffajee, R. L., Mello, M. M., Zhang, F., Busch, A. B., Zaslavsky, A. M., & Wharam, J. F. (2019). Association of federal mental health parity legislation with health care use and spending among high utilizers of services. Medical Care, 57(4), 245–255.

Hall 2023b* - Hall, S. V., Zivin, K., Dalton, V. K., Bell, S., Kolenic, G. E., & Admon, L. K. (2023). Association of the Mental Health Parity and Addiction Equity Act and the Affordable Care Act on severe maternal morbidity. General Hospital Psychiatry, 85, 126–132.

Harwood 2017* - Harwood JM, Azocar F, Thalmayer A, et al. The Mental Health Parity and Addiction Equity Act evaluation study: Impact on specialty behavioral health care utilization and spending among carve-in enrollees. Medical Care. 2017;55(2):164-172.

Heboyan 2021* - Heboyan, V., Douglas, M. D., McGregor, B., & Benevides, T. W. (2021). Impact of mental health insurance legislation on mental health treatment in a longitudinal sample of adolescents. Medical Care, 59(10), 939–946.

Kennedy-Hendricks 2018* - Kennedy-Hendricks, A., Epstein, A. J., Stuart, E. A., Haffajee, R. L., McGinty, E. E., Busch, A. B., Huskamp, H. A., & Barry, C. L. (2018). Federal parity and spending for mental illness. Pediatrics, 142(2), e20172618.

Knopf 2022* - Knopf, A. (2022). Parity for MH/SUD still falling short. Alcoholism & Drug Abuse Weekly, 34(5), 5–6.

Lawrence 2020* - Lawrence, M. B. (2020). Parity is not enough!: Mental health, managed care, and Medicaid. Journal of Law, Medicine & Ethics, 48(3), 480–484.

Li 2020d* - Li, X., & Ma, J. (2020). Does mental health parity encourage mental health utilization among children and adolescents? Evidence from the 2008 Mental Health Parity and Addiction Equity Act (MHPAEA). The Journal of Behavioral Health Services & Research, 47(1), 38–53.

Maxwell 2020* - Maxwell, J., Bourgoin, A., & Lindenfeld, Z. (2020, February 10). Battling the mental health crisis among the underserved through state Medicaid reforms. Health Affairs Forefront.

McCarthy 2024* - McCarthy MJ, Wicker A, Roddy J, et al. Feasibility and utility of mobile health interventions for depression and anxiety in rural populations: A scoping review. Internet Interventions. 2024;35(January):100724.

McConnell 2013* - McConnell KJ. The effect of parity on expenditures for individuals with severe mental illness. Health Services Research. 2013;48(5):1634-1652.

Medicaid-MHPAEA - Medicaid.gov. Mental Health Parity and Addiction Equity Act (MHPAEA). Parity toolkit, roadmap, and resources.

Mongelli 2020 - Mongelli, F., Georgakopoulos, P., & Pato, M. T. (2020). Challenges and opportunities to meet the mental health needs of underserved and disenfranchised populations in the United States. Focus (American Psychiatric Publishing), 18(1), 16–24.

Mulia 2019* - Mulia, N., Lui, C. K., Ye, Y., Subbaraman, M. S., Kerr, W. C., & Greenfield, T. K. (2019). U.S. alcohol treatment admissions after the Mental Health Parity and Addiction Equity Act: Do state parity laws and race/ethnicity make a difference? Journal of Substance Abuse Treatment, 106, 113–121.

Mulvaney-Day 2019* - Mulvaney-Day, N., Gibbons, B. J., Alikhan, S., & Karakus, M. (2019). Mental Health Parity and Addiction Equity Act and the use of outpatient behavioral health services in the United States, 2005–2016. American Journal of Public Health, 109(S3), S190–S196.

NCSL-Mental health - National Conference of State Legislatures (NCSL). State laws mandating or regulating mental health benefits.

NLM-Psychiatric timeline - National Library of Medicine (NLM). Timeline of early psychiatric hospitals & asylums. Early American psychiatry: Diseases of the mind. National Institutes of Health.

PBS American Experience-Mental illness - American Experience. A brilliant madness timeline: Treatments for mental illness. PBS Wisconsin.

Peterson 2018a - Peterson, E., & Busch, S. (2018). Achieving mental health and substance use disorder treatment parity: A quarter century of policy making and research. Annual Review of Public Health, 39, 421–435.

Sharifian 2024 - Sharifian N, Kolaja C, LeardMann CA, et al. Racial and ethnic mental health disparities in U.S. military veterans: Results from the National Health and Resilience in Veterans Study. American Journal of Epidemiology. 2024;193(3):500-515.

Solomon 2022* - Solomon, K. T., & Dasgupta, K. (2022). State mental health insurance parity laws and college educational outcomes. Journal of Health Economics, 86, 102675.

Stuart 2017* - Stuart EA, McGinty EE, Kalb L, et al. Increased service use among children with autism spectrum disorder associated with mental health parity law. Health Affairs. 2017;36(2):337-345.

US DOL-Parity - Employee Benefits Security Administration. Mental health and substance use disorder parity: Protection of mental health and substance use disorder benefits. U.S. Department of Labor (U.S. DOL).

Wen 2013* - Wen H, Cummings JR, Hockenberry JM, Gaydos LM, Druss BG. State parity laws and access to treatment for substance use disorder in the United States: Implications for federal parity legislation. JAMA Psychiatry. 2013;70(12):1355-1362.