February 7, 2023


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How to Shop for Health Insurance Covering Mental Health

One of the many landmark provisions of the Affordable Care Act, also known as Obamacare, is its insistence on covering mental and behavioral health issues. Before the ACA, such coverage was sporadic and inconsistent. While some health insurance plans covered a lot, others had no coverage at all.

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Yet mental and behavioral health problems are widespread and serious. According to the National Alliance on Mental Illness:

  • 19.1{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of U.S. adults, or roughly 1 in 5, experienced mental illness in 2018 (47.6 million people).
  • 4.6{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of U.S. adults experienced serious mental illness in 2018 (11.4 million people).
  • 16.5{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of U.S. youth ages 6 to 17 experienced a mental health disorder in 2016 (7.7 million people).
  • 3.7{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of U.S. adults experienced both a substance use disorder and mental illness in 2018 (9.2 million people).

The good news is, thanks to the ACA, far more people have health insurance to help pay for treatment. The bad news is that many still lack coverage. According to NAMI:

  • 11.3{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of U.S. adults with mental illness had no insurance coverage in 2018
  • 13.4{de3fc13d4eb210e6ea91a63b91641ad51ecf4a1f1306988bf846a537e7024eeb} of U.S. adults with serious mental illness had no insurance coverage in 2018.

When it’s time to shop for health insurance, here’s what you should know about mental and behavioral health coverage.

ACA ‘Essential Benefits’

As of the ACA enactment in 2014, most individual and small group health insurance plans, including plans sold on the Marketplace, are required to cover mental health and substance use disorder services, says the U.S. Department of Health and Human Services. Medicaid Alternative Benefit Plans also must cover mental health and substance use disorder services.

All ACA plans must cover essential health benefits: 10 categories of benefits, one of which is mental health and substance use disorder services, and another is rehabilitative and habilitative services.

As an essential health benefit, mental and behavioral health services must cover:

  • Behavioral health treatment, such as psychotherapy and counseling.
  • Mental and behavioral health inpatient hospital services.
  • Substance use disorder (also known as substance abuse) treatment.
  • Preexisting mental and behavioral health conditions.

In addition, health plans must comply with mental health and substance use parity requirements, meaning coverage for these services generally cannot be more restrictive than coverage for medical and surgical services.

Medicaid and Medicare Coverage

Each state’s Medicaid program covers some mental health and substance use services. The Children’s Health Insurance Program covers “a full service array,” HHS says, including counseling, therapy, medication management, social work services, peer support and substance use treatment. Adult coverage is determined by the state.

Medicare also covers many mental health services:

  • Medicare Part A (hospital insurance) covers inpatient mental health care services, including your room, meals, nursing care and other services and supplies.
  • Medicare Part B (medical insurance) covers mental health services outside of a hospital, including visits with a psychiatrist or other doctor, visits with a clinical psychologist or clinical social worker and lab tests.
  • Medicare Part D (prescription drug coverage) covers drugs that treat a mental health condition. However, each Part D plan has its own list of covered drugs, called a formulary, so not all plans cover the same medications.
  • Medicare Advantage plans (such as an HMO or PPO) also cover mental and behavioral health; details are provided by the plan.

Employer-Based Coverage

Employer-based coverage is required to comply with ACA requirements regarding mental and behavioral health, including parity protection. HHS recommends you look carefully at your plan’s enrollment materials, or any other information about the plan, to see what the coverage levels are for all your benefits. The ACA requires insurers to provide easy-to-understand summaries of benefits, including mental health benefits.

Individual Coverage

If you don’t get insurance through an employer or Medicare, HHS recommends you learn about health insurance coverage provided by Medicaid, CHIP or the health insurance marketplaces by visiting HealthCare.gov.

The health insurance marketplace, created by the federal and state governments to make buying health coverage easier and more affordable, lets you compare health plans, find out if you are eligible for tax credits to help pay for private insurance or health programs like CHIP and enroll in a health plan that meets your coverage and financial needs. All these plans must comply with ACA regulations on mental and behavioral health coverage.

Military Veterans

TRICARE And VA Health Care, the federal health insurance plans for people who have served in the military, cover mental and behavioral health. According to NAMI, military veterans may also qualify for enhanced eligibility for VA Health Benefits, which means they do not have to pay copays for conditions potentially related to their combat service, including mental health issues like PTSD, depression, suicidality and substance abuse.


When shopping for mental health coverage, there are a few important things to consider.

  • Check the plan’s network of physicians and medications. “The biggest hiccup we find is ensuring your mental health doctor is in the network. Try to educate yourself on making sure your doctor is in network, so you get reduced rates,” says Nathan Teater, manager of IFP sales, customer care and enrollment for eHealth. “Also make sure your drugs are covered under the plan. Check the formulary list. Drugs can be quite expensive if not on the formulary.”
  • Avoid short-term health plans. “Steer away” from these plans, Teater says, because they are not regulated by the ACA and therefore usually do not cover mental and behavioral health care, do not cover preexisting conditions and don’t cover medications. “I never recommend these plans,” he says.
  • Inquire into the health plan’s customer service support. “People have different needs and you want to be able to search for (doctor) availability, specialists in, for example, family or child counseling, if they are accepting new patients and information on that provider’s demographic if you want someone with a similar cultural background,” says Emma Hoo, director of the Pacific Business Group on Health.
  • Ask about Employer Assistance Programs. An EAP is an employer-provided program that may include mental health counseling and support, for a limited time and for relatively moderate issues. “Those can be immediately available at no cost, and can also act as a referral to other resources in the community that are challenging to get appointments at,” Hoo says. Many employers also provide tools like computer apps on resilience, managing stress, mindfulness and more. “The employer may cover the fees, and they may also be available through the health plan,” she says.