Mental Health Parity is Here!

Mental Health Parity is Here!

As of January 1 of this year, Medicare pays the same amount for outpatient mental health care treatment as it does for other covered medical services. Medicare pays 80% of the approved amount for care, and the beneficiary or his/her supplemental insurance pays the other 20%. This is a significant improvement from the 50% coverage Medicare provided in the past, and is great news for many elders seeking treatment for depression, anxiety and other mental health conditions.

Since the program’s inception, Medicare had paid a smaller portion of the bill for treatment from psychiatrists, psychologists or clinical social workers than it did for medical services. It has also imposed strict lifetime limits on psychiatric hospitals stays (no more than 190 days – and this restriction still stands), though it has no such limits to medical care received in inpatient facilities.

In 2008, however, Congress passed the Medicare Improvements for Patients and Providers Act. This law required Medicare to begin covering a larger share of the cost of outpatient mental health services in 2010 and to phase in additional increases over time. In 2008, Medicare covered only 50% of the bill, last year Medicare covered 65%, and as of January 1, 2014, Medicare now covers 80% of bill for covered treatment (after the annual deductible of $147 is met).

This Medicare change follows new regulations issued last month by the administration for the Mental Health Parity and Addiction Equity Act, which expanded the principle of equal treatment for psychological illnesses to all forms health insurance. But that law does not apply to Medicare.

For more info on the Mental Health Parity Act, see the article: Sebelius Releases Final Rules for 2008 Mental Health Parity Act. Also see the article: Medicare Requires Mental Health Parity.

Karen Fletcher
Our blogger Karen J. Fletcher is CHA's publications consultant. She provides technical expertise, writing and research on Medicare, health disparities and other health care issues. With a Masters in Public Health from UC Berkeley, she serves in health advocacy as a trainer and consultant. See her current articles.

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