Mental Health Parity at Risk

Deregulating the Individual Market and the Impact on Mental Health Coverage

Before the Affordable Care Act (ACA), the individual health insurance market was riddled with persistent problems of availability, affordability and adequacy for people with mental health and substance use disorders. The ACA changed this by remedying discrimination against people with preexisting conditions and requiring coverage of mental health and substance use treatment services in the individual market. With the regulatory requirements that such coverage be comprehensive and provided at parity with other medical coverage, individuals no longer faced unequal limits on mental health and substance use treatment coverage. However, efforts are underway to weaken the individual market protections in the ACA.

Our research of the individual health insurance market prior to the ACA, including analysis of individual health insurance policies offered in eight states and interviews with current or former insurance executives, consultants and actuaries, found:

• Most States Had No Requirement that Individual Market Health Insurance Plans Cover Mental Health Services
• Health Plans Sought to Avoid Enrolling Individuals with Mental Health or Substance Use Conditions
• When Individual Market Insurance Was Accessible, It Was Often Unaffordable and Inadequate for Individuals with Mental Health or Substance Use Conditions
• Benefit Limitations for Mental Health and Substance Use Services Made Coverage Superficial
• Insurers Reduced Access to Mental Health and Substance Use Services Through Cost-Sharing Design and Utilization Management
• Restricted Access to Prescription Drugs Further Limited Coverage for Mental Health Treatments
• Flexibility in the Essential Health Benefits and Loss of Parity Rules Could Mean a Return of Limits and Exclusions in Mental Health and Substance Use Treatment Coverage