02 Feb Mental Health Coverage after Obamacare
Big changes are coming to health care in the United States. With the inauguration of President Donald J. Trump, Congress has begun the process of dismantling the Affordable Care Act (ACA). The ACA contained numerous provisions that expanded access to mental health care and the process over the next several months will likely put those provisions in jeopardy. Now more than ever, mental health advocates need to stay informed and be ready to fight for our cause.
Where the ACA expanded mental health coverage and where it fell short
Since its founding 15 years ago the mission of Access Institute has been to provide mental health care to low-income people who either can’t afford or don’t have access to care through their insurance plans. In 2002, approximately 20% of Californians lacked health insurance coverage and many health plans provided scant coverage for mental health services. Access Institute has worked to fill this gap. While the Affordable Care Act (aka Obamacare) expanded insurance coverage (only about 9% of Californians lack insurance today) and included key provisions related to mental health parity, for many people, accessing affordable and effective mental health care via insurance plans has remained a challenge. Why is that?
The mental health parity provision of the ACA meant that for the first time insurance plans had to cover mental health services in the same way they covered other health services. Plans could no longer have higher deductibles or co-pays for a psychotherapy session than for a visit, say, to a dermatologist. They couldn’t require a pre-authorization for mental health care and not require the same for another specialty service. The ACA also outlawed the denial of coverage for “pre-existing conditions”. Because mental health conditions are often chronic, insurers were able to deny coverage under this provision. The implementation of the ACA meant that outpatient mental health services were now accessible to millions of people through insurance for the first time, in theory anyway. In actuality, insurance companies have continued to limit access to mental health care. They have done this by limiting the number of mental health providers on network panels and keeping reimbursement rates so low that providers wouldn’t join. Providers working with the network plans are often full and not taking new patients. The only option in that case is to seek care out-of-network, where services can be reimbursed, but at a much lower rate. You can easily find an out of network therapist, pay out of pocket and get your sessions reimbursed later, usually at around 50 cents on the dollar. Not a huge burden for a higher-income individual, but not a possibility for those who are even middle-income.
The ACA mandated that everyone have health insurance and offered subsidies for lower-income people to purchase coverage. It created “exchanges” where various plans could be compared and bought. A big problem here has been that the plans that low income people can afford (even with subsidies) come with higher out-of-pocket deductibles, in the $4,000 to $7,000 range. These deductibles apply to mental health treatment. Again, high out of pocket costs have kept care out of reach for working families.
The ACA expansion of Medicaid (MediCal in California) is another good news/bad news story. Thirty-two states, including California, accepted federal subsidies to expand Medicaid to individuals earning up to 133% of the federal poverty level. This extended mental health coverage to millions of people. But because the public health system is so underfunded and overburdened, accessing care means enduring long waiting lists, accepting time-limited treatment, or settling for services that aren’t adequate to meet one’s needs, such as monthly visits to a therapist when weekly ones are more appropriate.
Trumpcare: What to expect for mental health
The ACA was a start, but needed improvement to truly address America’s mental health needs. The Trump Administration and Republican leaders in congress have chosen to start over by expressing a clear intention to repeal and replace the ACA. While they have not provided details on what the replacement plan would entail, they have given some clear intentions. Given what we know, how is repealing/replacing the law likely to impact mental health coverage?
- Millions of people could end up having no coverage for mental health care at all.
Over 30 million people have accessed coverage through expanded Medicaid and through subsidies that support purchasing of plans through the healthcare exchanges. Current plans are to turn the Medicaid program into a system of “block grants” to the states. Each state would get a set amount of money to fund their own program. Would funding be maintained at the current level? If it’s not, states would be forced to make cuts, and mental health care could be on the chopping block. Most replacement plans have current subsidies replaced by tax credits for purchasing insurance. Tax credits would help higher income, higher tax families, but would not provide much support to lower income households (that pay little or no taxes) and without a mandate, many would forgo coverage entirely.
- Removing mental health parity requirements would allow companies to limit or eliminate coverage.
Repealing ACA also repeals mental health parity regulations associated with it. There is no guarantee that those regulations would be part of the new law. Given that the new administration has made “de-regulation” a policy position, this is something that advocates will need to pay attention to as the new laws are drafted. If parity is eliminated at the federal level, California may need to consider enhancing its existing parity laws. However, California law cannot mandate parity for insurance plans that are federally regulated.
- Removing the guarantee of coverage of pre-existing conditions would bar many mentally ill patients from getting insurance
This was another big change brought about by the ACA. The insurance companies basically gave up their right to deny coverage to preexisting conditions in exchange for the individual mandate. The rationale goes like this: If less costly, healthy people were forced to buy insurance, companies could afford to insure people with more serious pre-existing conditions. Proposals being talked about all get rid of the individual mandate. If companies are forced to keep the pre-existing condition requirement without that mandate, rates would have to rise significantly. Either way, a negative for mental health patients.
Possible silver linings
Overall, the new approach to healthcare coming out of Washington will be much lighter on mandates and regulation and more supportive of “free-market” principles. I already mentioned the tax-breaks being considered for health care costs. This could be a benefit to many people by offsetting out-of-pocket costs for psychotherapy and other outpatient services. Another is the expanded use of health savings accounts. These are already in use and available to anyone with a high-deductible health plan. They offer a way to use pre-tax income to pay for health related expenses, including mental health. Republican plans to replace Obamacare all mention expanded use of these accounts but have provided no details on how that would be accomplished. In addition, both of these proposals would provide increasing help as one income rises. Neither seem to consider helping lower-income Americans afford healthcare.
The debate that preceded the passing of the ACA highlighted the need to expand mental health coverage with real, positive outcomes. Thanks to the tireless efforts of mental health advocates, millions more people have access to care than a decade ago. This work was far from over within the ACA and now, with its repeal, advocates will have additional hurdles to surmount. But the renewed focus on health care could provide an opportunity to educate the public about mental health. You can help by paying close attention as the debate in congress unfolds. Don’t hesitate to contact your senator or representative to impress upon them how important that protections and support for mental health care remain a part of American healthcare and the voices of the people who need it most are heard.