Health Insurance Coverage For Mental Health Services


WRITTEN BY: Craig Sturgill

UPDATED: OCTOBER 04, 2022 | 3 MIN READ

According to the National Alliance on Mental Illness, around 51.5 million people experience mental illness yearly in the US. Unfortunately, only 45% of those adults received any treatment for their condition in a year.

The Affordable Care Act (ACA) makes mental health insurance more accessible than ever. However, your actual coverage depends on your plan and provider. Learn more about coverage for mental health services, so you can enroll in a plan that best suits your needs.

Government-Sponsored Insurance Mental Health Care Requirements

The ACA requires health insurance Marketplace plans to cover ten categories of medical services, also known as essential health benefits. The ACA considers mental health services an essential health benefit, including:

  • Behavioral health treatments, like counseling and psychotherapy
  • Mental and behavioral health inpatient services
  • Substance use disorder (substance abuse) treatment

Medicaid Alternative Benefit Plans must also cover these services and rehabilitative and habilitative services. Additionally, these plans must comply with parity requirements set forth by the Mental Health Parity and Addiction Equity Act (MHPAE). These requirements prevent mental health and substance abuse coverage from being more restrictive than coverage for other services.

Healthcare.gov plans

All state and federally-managed Marketplace health plans must include mental health care coverage. This coverage includes:

  • Mental and behavioral health inpatient services
  • Pre-existing condition coverage
  • No lifetime or annual coverage dollar limits
  • Behavioral treatments, such as counseling and psychotherapy
  • Parity protections, meaning copays, deductibles, and coinsurance for mental health services, are the same or similar to those for medical and surgical benefits.

Health insurance plan coverage varies by state, and some states offer multiple options with varied coverage.

Mental health care coverage by tier

Mental health insurance coverage details vary depending on the plan. The higher your plan level, the more coverage you will receive overall. For example, you will have more coverage with a platinum plan than with a gold, silver, or bronze plan.

If you use mental health services often, consider a plan with lower out-of-network costs, like a PPO plan. This plan lets you see providers out of your network and maintain coverage.

CHIP (Children’s Health Insurance Program)

CHIP coverage varies by state, but most health plans provide the following mental health services, including:

  • Counseling and therapy
  • Peer supports
  • Medication management
  • Substance use disorder treatments
  • Social work services

Parity protections for substance use disorder and mental health services also apply to CHIP coverage.

Medicare

Original Medicare Part A covers inpatient behavioral health and substance use services. If hospitalized, you may pay a deductible or coinsurance costs. Medicare Part B covers outpatient mental health services, including a yearly depression screening. Therapeutic services, including Part B deductible, coinsurance, and copays, may incur out-of-pocket costs. Medicare Advantage (Part C) covers therapeutic services at the same level or greater than Original Medicare, but prices will vary.

Medicaid

Like ACA plans, all state-run Medicaid program plans must cover essential health benefits and are subject to parity laws. Medicaid plans vary, so check your state’s offers.

Parity laws for mental health services

Parity laws prevent mental health and substance abuse coverage from being more restrictive than coverage for other services. These laws provide the following protections:

  • Care Management: preventing the requirement to get authorization before treatment
  • Financial Protection: copayments, coinsurance, deductibles, and out-of-pocket limits
  • Treatment: preventing limits to the number of visits or days covered

Employer-Sponsored Insurance and Mental Health Care Requirements

Your employer-sponsored health insurance plan may cover therapy and other mental health care services. Even for job-sponsored plans offering coverage, many people pay out of pocket for mental health care. Because insurance companies only cover what they deem medically necessary, they require a mental health diagnosis before paying claims.

Mental health benefits from an employer-sponsored plan will also depend on your company size, provider network, and other factors.

Insurance Requirements in Companies of 50+ Employees

Companies with 50 or more full-time workers must provide health insurance. However, this mandate doesn’t require that coverage includes mental health services. Fortunately, many larger companies have some coverage of therapeutic services.

Insurance Requirements in Companies Under 50 Employees

Companies with fewer than 50 full-time employees aren’t legally required to provide health insurance. They must include mental health and substance use disorder services if they offer insurance.

The Best Insurance Companies for Mental Health Care

Before enrolling in a plan, reviewing the best insurance providers for mental health is best. VeryWellMind.com recently reviewed 15 health insurance companies, comparing price, coverage, limitations, reputation, and more.

The best mental health care provider: United Healthcare

United Healthcare secures the top spot with an impressive network and reputation. The company also offers 24/7 mental health support, excellent online resources, and many treatment options for substance abuse disorders.

The best mental health care customer service: Kaiser

Kaiser Permanente carries a consistent report of excellent customer satisfaction. The company also provides access options to mental health services without referrals and a range of psychiatric care.

The best mental health care resources: Aetna

Aetna provides its clients with extensive information and online mental health and wellness tools. The company also offers acupuncture and chiropractic therapies.

The best mental health care telehealth coverage: Cigna

Cigna provides top telehealth services, including a 24/7 nurse hotline. Virtual care is also available, allowing consumers to connect with an extensive network of counselors and psychiatrists.

Mental Health Insurance Coverage FAQs

Does insurance cover mental health in the US?

Marketplace and Medicaid Alternative Benefit plans must cover mental health and substance use disorder services. Private plans and employer-sponsored plan requirements will vary by company size, providers, and other factors.

Does life insurance cover mental illness?

You can still qualify for life insurance if you’ve been diagnosed with a mental illness. The insurance company may request an attending physician statement to confirm you’ve completed your treatment plan and aren’t experiencing symptoms.

Should mental health be included in healthcare coverage?

Marketplace plans consider mental health care an essential benefit. Private and employer-sponsored plans will vary.

Should mental health be treated the same way as other health issues?

Mental and physical health are equally important to overall health. The CDC has even linked mental health conditions to physical health problems like diabetes, stroke, and heart disease.

What are the benefits of mental health coverage?

Marketplace plans must provide mental health coverage, including behavioral health services (counseling and psychotherapy), mental and behavioral health inpatient services, and substance use disorder treatment.

Finding the Health Insurance Coverage You Need

The ACA has made mental health insurance more accessible to many Americans, but your coverage will depend on your provider, metal tier, and other factors. It’s best to shop and compare rates to find the right coverage.