Support for this research was provided by the Robert Wood Johnson Foundation. The views expressed here do not necessarily reflect the views of the Foundation. How Repealing and Replacing the ACA Could Reduce Access to Mental Health and Substance Use Disorder Treatment and Parity Protections Jane B. Wishner Timely Analysis of Immediate Health Policy Issues JUNE 2017 In Brief and fully insured small group plans and including the stigma surrounding Millions of Americans gained coverage Medicaid expansion benefit plans to mental illness and the “unfair” treatment for mental health (MH) and substance include coverage for both MH and SUD limitations and financial requirements use disorder (SUD) treatment through treatment. Efforts to repeal and replace placed on mental health benefits in the expansion of Medicaid and private the ACA—such as the American Health private insurance. The commission’s insurance coverage under the Affordable Care Act (AHCA), which passed the final report stated, “Understanding that Care Act (ACA). The law also included House of Representatives on May 4, mental health is essential to overall health parity protections ensuring that MH/ 2017—could cause millions of people to is fundamental for establishing a health SUD benefits were not subject to plan lose MH/SUD coverage and the parity system that treats mental illnesses with provisions stricter than those for medical protections of the MHPAEA. the same urgency as it treats physical care (e.g., higher co-payments and illnesses.”2 lower visit limits).1 Bipartisan support Introduction for MH/SUD treatment and parity has In recent years, bipartisan support The Paul Wellstone and Pete Domenici increased since the 1990s, most recently for expanded MH/SUD treatment has Mental Health Parity and Addiction in response to the opioid epidemic. grown along with the recognition that Equity Act of 2008 (MHPAEA) included Congress has addressed coverage these health conditions should be the 1996 law’s requirement that large parity between MH/SUD and medical covered like other medical conditions group plans offer comparable annual benefits in piecemeal fashion, initially in health insurance programs and not and lifetime dollar limits for medical and requiring parity in annual and lifetime subject to higher financial or treatment mental health benefits and extended dollar limits for MH and medical benefits barriers. Congress first addressed these protections to SUD treatment. The in large employer-sponsored plans. mental health coverage restrictions in MHPAEA also significantly expanded The Paul Wellstone and Pete Domenici private insurance in the Mental Health parity protections for large-group Mental Health Parity and Addiction Parity Act of 1996. That law required employer-sponsored insurance (ESI) Equity Act of 2008 (MHPAEA) expanded large employer-sponsored health plans to other financial requirements, such those parity protections to SUD benefits to offer comparable annual and lifetime as enrollee out-of-pocket costs, and and required large employer-sponsored dollar limits for medical and mental to quantitative and nonquantitative plans with MH/SUD coverage to use health benefits when the latter were treatment limitations for medical care comparable financial requirements and offered as part of an insurance package. and MH/SUD care. Like the 1996 law, treatment limitations for medical and MH/ The Mental Health Parity Act applied the MHPAEA did not mandate coverage SUD benefits. only to MH benefits, not SUD benefits, of MH/SUD benefits, but required parity and did not require plans to cover MH if a plan included them. The MHPAEA The ACA closed a significant coverage benefits. It also exempted health plans exempted plans that would incur an gap by extending the parity protections from the parity requirement if the cost of increased cost of at least 2 percent to of the MHPAEA to the individual compliance was at least 1 percent more comply with the parity requirements in insurance market and to certain plans than the original cost of coverage. the first year, or at least 1 percent in any that cover low-income adults through subsequent year.3 the ACA Medicaid expansion. Unlike In 2002, President George W. Bush the MHPAEA, which does not require created the New Freedom Commission Also in 2008, Congress enacted the health plans to cover MH/SUD, the ACA on Mental Health to identify barriers Medicare Improvements for Patients and required nongrandfathered individual to obtaining mental health services, Providers Act, which eliminated higher How Repealing and Replacing the ACA Could Reduce Access to Mental Health and Substance Use Disorder Treatment and Parity Protections 1 Timely Analysis of Immediate Health Policy Issues co-payments for outpatient MH/SUD the protections of the MHPAEA to million low-income uninsured adults who services in Medicare Part B. In 2009, nongrandfathered plans in the small had a behavioral health condition before Congress adopted the Children’s Health group market.10 the Medicaid expansion, more than Insurance Program Reauthorization Act half lived in states that had expanded (CHIPRA), which applied the MHPAEA to The EHB requirement combined Medicaid as of February 2015.11 Under the Children’s Health Insurance Program with the extension of the MHPAEA to the ACA and regulatory guidance from (CHIP).4 individual and small group plans and the Centers for Medicare & Medicaid Medicaid alternative benefit plans Services (CMS), the MHPAEA applies In 2009, before the ACA was adopted, ensures that millions of previously to alternative benefit plans offered to an estimated 2 percent of people with uninsured Americans now receive MH/ Medicaid expansion enrollees under ESI had no coverage for MH benefits, SUD benefits with the parity protections the ACA.12,13 In 2016, CMS issued a and 7 percent had no coverage for once available only to people in large final rule that established standards for SUD benefits.5 The MHPAEA provided group ESI plans. applying the MHPAEA to alternative protections to the remaining people with benefit plans, Medicaid plans offered by ESI who had coverage for these services Through these provisions, the ACA Medicaid managed care organizations, in the large group market. However, substantially increased MH/SUD and CHIP.14 coverage of MH/SUD services in the coverage both in the private insurance individual market was much more limited. market and in Medicaid. Table 1 shows How Essential Health Benefits and Approximately one-third of people in how Congress has expanded the scope Parity Protections Increase Access to the individual market had no coverage of parity protections in the private Health Care for People With a Mental for SUD, and nearly 20 percent had no insurance market since 1996. Illness or Substance Use Disorder coverage for MH services, including outpatient therapy and inpatient crisis The ACA Medicaid expansion has MHPAEA parity protections apply to intervention and stabilization.6 Those increased access to behavioral health financial and treatment provisions of who had some MH/SUD coverage in the care in the United States. According to insurance plans. Combined with ACA individual market had no parity protections the GAO, Medicaid was the largest source essential health benefit requirements for those services, and those benefits of public funding for behavioral health and limits on annual and lifetime costs were typically very limited. According treatment in 2014.7 Of the estimated 3 in individual and small group plans, to data from 2008 to 2013 analyzed by the Government Accountability Office (GAO), approximately 17 percent of low- Table 1: Federal Parity Protections for Mental Health and Substance income uninsured adults (3 million Use Disorder Benefits in the Private Insurance Market people) had a serious mental illness, 7 substance use condition, or both. Year Types of Plan provisions Federal law benefits subject to parity Plans included enacted included requirements The ACA was enacted in this coverage environment. It substantially expanded Mental Health Parity Large employer- 1996 MH only Annual and lifetime sponsored group coverage to previously uninsured Act dollar limits only health plans Americans and extended the parity Annual and lifetime protections of the MHPAEA to the Paul Wellstone dollar limits, and Pete Domenici individual market and to low-income MH and other financial Large employer- Mental Health Parity 2008 requirements, sponsored group adults covered through the ACA Medicaid SUD and Addiction Equity quantitative and health plans expansion.8 The ACA went further than Act (MHPAEA) nonquantitative earlier legislation, requiring coverage of treatment limits MH/SUD benefits in nongrandfathered MH and Affordable Care Act 2010 Same as MHPAEA Individual individual and fully insured small group SUD (nongroup) plans* plans and in Medicaid alternative benefit Nongrandfathered plans, the health plans for the Medicaid Affordable Care Act MH and 2013 Same as MHPAEA small employer- expansion population.9 Under these EHB regulations SUD sponsored group health plans types of coverage, health plans must include MH/SUD treatment as one of ten Sources: Mental Health and Substance Use Disorder Parity Task Force. Final Report. Washington: US Dept of Health and Human categories of essential health benefits Services; 2016. https://www.hhs.gov/sites/default/files/mental-health-substance-use-disorder-parity-task-force-final-report.pdf. (EHBs). These plans also are required to Department of Health and Human Services, Final