Implications of Health Reform for Mental Health Care

Provisions in the Patient Protection and Affordable Care Act signed into law by President Obama on March 23 will benefit people who have mental and substance use disorders and their families, improve care in the public mental health system, and address the mental health workforce crisis. The Kaiser Family Foundation has released a summary of the law's provisions along with a health reform implementation timeline (2010–2014). In addition, as the health reform debate unfolded, the Bazelon Center for Mental Health Law tracked proposed provisions and described their implications for mental health care. Some of these provisions were included in the final legislation and are described in a Bazelon report.

In 2014 all U.S. citizens and legal residents will be required to have qualifying health coverage. To achieve this goal, by 2014 each state must have a health insurance exchange—a competitive marketplace where individuals and small employers can shop for affordable coverage. The essential benefits package offered by the state exchanges must include parity coverage of mental and substance use treatment. Individuals with incomes between 133% and 400% of the federal poverty level (FPL) will receive subsidies to purchase insurance. To help consumers identify affordable coverage options, the bill requires the Secretary of Health and Human Services to establish by July 1, 2010, a Web site that shows options available in each state, including Medicaid or Medicare, SCHIP (State Children's Health Insurance Program), and high-risk pools. It is expected that newly insured individuals and families will seek care that was previously unaffordable and that public systems, including the mental health system, will treat more patients and receive greater revenues.

Reforms to private insurance plans will help to end discrimination against people with mental illnesses and make coverage more affordable for them and their families. Effective immediately, the law prohibits insurers from denying or taking away coverage on the basis of present or past health status, general medical conditions and mental illnesses, or disability. Individuals who are currently uninsured because of a preexisting condition—a group that includes many people with mental illnesses—will have immediate access to enroll in a high-risk pool, which will provide temporary coverage until 2014, when the state exchanges are in place.

Starting in 2014 the law eliminates lifetime and annual limits on the dollar value of benefits, which will help reduce out-of-pocket expenses for families with children who require intensive and long-term mental health care and for older individuals who need ongoing services and medications. Any such limits set by insurance plans before 2014 must conform to rules set by the Secretary of Health and Human Services and must ensure access to needed services with minimal impacts on premiums. Dependent, unmarried children can remain on their parents' private health plans until age 26, a provision that goes into effect in 2010. Even though young adults with mental illnesses may have significant functional impairments, they may be ineligible for Medicaid because they do not meet disability criteria or because they are living with parents whose income disqualifies them.

Medicaid reforms will also provide benefits to people with mental illnesses and their families. In 2014 Medicaid eligibility will be expanded to cover all non-Medicare-eligible individuals under age 65 with incomes at or below 133% of FPL (based on modified adjusted gross income). Among eligible individuals are adults without dependent children. For these newly eligible persons, covered services will be more limited than those provided to other Medicaid enrollees but will have to meet standards in benchmark Medicaid plans. In 2014, states must extend Medicaid coverage up to age 25 for former foster care children who have "aged out" of the system. To help pay for the newly covered groups, states will receive 100% federal funding for 2014 through 2016, which will decrease to 90% in 2020 and subsequent years.

In 2010, patients enrolled in Medicare Part D plans whose prescription expenses reach the so-called "doughnut hole" ($2,700 to $6,150) will receive a $250 rebate. Over the next ten years, the beneficiary coinsurance rate for this coverage gap will be narrowed in phases from the current 100% to 25% in 2020. In 2014 smoking cessation medications, barbiturates, and benzodiazepines—all of which are important for people with mental illnesses—will be removed from Medicaid's excludable drug list.

Another important Medicaid reform for people with serious and persistent mental illness is a new state option effective in 2011 that will permit enrollees with chronic conditions to designate a provider as a "health home." Health homes will be composed of a team of health professionals and will provide a comprehensive set of health care and other services. To encourage states to take up this option, a 90% federal match will be provided for two years for services related to health homes, including care management, care coordination, and health promotion.

Other key mental health provisions in the law include an authorization for $50 million in grants to create coordinated and integrated services through the colocation of primary and specialty care in community-based mental and behavioral health settings. In addition, the Substance Abuse and Mental Health Services Administration is directed to award grants to Centers of Excellence in the treatment of depressive disorders. Postpartum depression is singled out in the new law, which provides support for such services as screening for postpartum depression and psychosis and educating mothers and their families about these conditions. Funds are also authorized for research into the causes of postpartum depression and its treatments.

To address the workforce crisis, the law eases current criteria for schools and students to qualify for federally supported student loans, shortens payback periods, and decreases the noncompliance provision to make the primary care student loan program more attractive to medical students. It establishes a loan repayment program for pediatric subspecialists, including providers of mental and behavioral health services to children and adolescents, who are or will be working in a health professional shortage area or medically underserved area or with a medically underserved population. In addition, the law increases and extends authorization of appropriations for the National Health Service Corps scholarship and loan repayment program for fiscal years 2010–2015. Also included are mental and behavioral health education and training grants to schools for the development, expansion, or enhancement of training programs in social work, graduate psychology, professional training in child and adolescent mental health, and preservice or in-service training to paraprofessionals in child and adolescent mental health.

More information is available on the health reform pages of the Kaiser Foundation ( healthreform.kff.org ) and the Bazelon Center ( www.bazelon.org/issues/healthreform ).