Societal perceptions and protections of behavioral health in the United States have changed dramatically in the past 50 years. The country’s progressive civic support for a more highly developed diagnosis and improved treatment for individuals with behavioral health issues has led to recent sweeping reform in healthcare insurance law that financially supports and will accelerate the availability and efficacy of behavioral care.
As a brief overview, behavioral health encompasses mental health and substance use disorders. Common mental health disorders include depression, bipolar disorder, eating disorders, obsessive-compulsive disorder, post-traumatic stress disorder and schizophrenia. In any given year, a notable proportion of the U.S. population is afflicted by a behavioral health issue. According to the Department for Health and Human Services, Substance Abuse and Mental Health Services Administration (SAMHSA), about one in five individuals over the age of 12 in the U.S., or 46 million people, suffered from a mental health issue in 2014, and 8% of the population, or 22 million people, suffered from a substance use disorder; 3% of the population, or 8 million individuals, had both a mental health issue and a substance use disorder. Although the prevalence of behavioral health disorders is widely pervasive today, the negative subtext historically linked to them among the U.S. population has traditionally hindered their acknowledgement and care.
Beginning with the civil rights movement, societal stigmas in the U.S. associated with the diagnosis and treatment of behavioral health disorders have been on the decline. Even with the public’s improving attitudes, as is often necessary to protect marginalized groups, it took the legislative branch to usher in change through statutory lawmaking. The Civil Rights Act of 1964 outlawed discrimination based on race, color, religion, sex or national origin. This historic law guaranteed equal opportunities in employment, state and local government services, public accommodations, commercial facilities, transportation and telecommunications. However, similar civil rights protections would not be afforded to the disabled, including the mentally ill and those suffering from addiction, until Congress passed the Americans with Disabilities Act (ADA) in 1990. The ADA laid the groundwork for the Supreme Court’s 1999 decision in Olmstead v. L.C., a landmark case requiring states to administer services “in the most integrated setting appropriate to the needs of qualified individuals with disabilities.” Essentially, states must uphold the rights of individuals with disabilities to live and work in the neighborhood of their choosing – that is, in a home and community-based setting, rather than an institutional setting. Integrating individuals with behavioral health issues into community settings helped decrease the societal stigmas surrounding diagnosis and treatment, but care would remain inhibited by high out-of-pocket costs for therapies and medications under private insurance, which covers the majority of the U.S. population.
More than 60% of behavioral health costs are paid for by public payers (primarily Medicare and Medicaid), while total U.S. healthcare expenses are approximately evenly split between public and private payers (employer and private group plans as well as individual out-of-pocket costs).1 The public payers’ disproportionate share of behavioral health payments can partially be explained by the fact that compared with the private insurance population, Medicaid beneficiaries are more likely to be in fair or poor health, have a physical or mental chronic condition and have limited or no ability to work due to their health status.2 As a result, often private employment-based insurance is unobtainable by this population, who typically qualify for Medicaid based on disability. The higher incidence rate of behavioral issues in the Medicaid population thus affects public payers’ share of spending for behavioral healthcare.
This only partially explains the disparity between public and private payment. Given the difficulty and cost associated with identifying and remedying behavioral health issues, employer and private group insurance coverage for behavioral health services was historically much more limited than coverage for physical health services, such as stitching cuts and setting broken bones. However, recent U.S. healthcare law reform has dramatically increased coverage for behavioral disorders under private insurance.
The initial groundwork for change was laid by the Mental Health Parity Act of 1996 (MHPA), which required that annual or lifetime dollar limits on mental health benefits be no less than similar limits imposed on medical or surgical benefits. Unfortunately, the law ultimately did little to increase mental health benefits, as insurers and employers circumvented the legislation by implementing higher deductibles, copays and out-of-pocket maximums as well as limiting the number of treatment days or visits for mental health. It would not be until 2008 when Congress would close these loopholes by passing the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act (MHPAEA). In addition to soldering the MHPA, the MHPAEA expanded the same mental health protections to substance use disorders. However, neither act mandated that insurers and employers cover mental health or substance use disorders (MH/SUD). Both laws only required coverage parity with medical or surgical benefits if MH/SUD benefits were offered, and each only covered large self-insured employers and group health plans. Small plans and self-insured private employers with 50 or fewer employees were exempt from both laws. Still, the impact of the MHPAEA was tremendous, as approximately 140 million total U.S. citizens – more than 40% of the country’s population – were covered under large employer and group plans, significantly reducing the immediate personal financial burden for individuals seeking behavioral healthcare services.
Small plans and employers would soon be required to comply with the coverage rules of the MHPAEA. The Patient Protection and Affordable Care Act of 2010, otherwise known as the Affordable Care Act (ACA) or Obamacare, closed this loophole, requiring that small plans and employers cover MH/SUD services as one of 10 essential health benefits. This expanded coverage of MH/SUD benefits to approximately 30 million people insured by small employers and group health plans. In addition, the ACA provided MH/SUD benefits to an additional 20 million to 30 million people who gained insurance through Medicaid’s expansion across 32 states and the new healthcare insurance exchanges. All combined, it is estimated that the ACA and the two earlier parity laws improved access to behavioral health services for an estimated 200 million individuals, or 65% of the U.S. population.
The overall growing awareness of mental health and substance abuse conditions has accelerated demand for services, and healthcare reform under the ACA and parity laws has improved the financial accessibility of care given enhanced insurance coverage. SAMHSA reported that between 2009 and 2013, the percentage of adults receiving any type of mental health treatment grew steadily from 12.6% to 14.6%. As a result, U.S. expenditures on mental health and substance use disorders was up from $170 billion in 2009 to $220 billion in 2014, representing annual growth of 5.3% vs. aggregate national healthcare spending growth of 4% per year over the same period. This increase pushed behavioral health’s share of national healthcare expenditures from 6.8% in 2009 to 7.3% in 2014. With approximately 320 million people in the U.S., the country spent on average $690 per person in 2014 on MH/SUD services vs. total healthcare expenditures of $9,507 per person. Per capita spending and utilization of behavioral health is expected to increase as the industry continues to incorporate changes brought by the MHPAEA and the ACA.
Although both expenditure and utilization have increased over time, behavioral health services are still vastly underutilized – 60% of adolescents and adults with diagnosable disorders do not receive mental health services. Similarly, nearly 90% with a substance abuse disorder do not receive treatment.3 While changes in societal attitudes have warmed, and U.S. laws have reformed to support behavioral health, the country still has a long way to go until every individual needing care receives it. Further expansion of behavioral health utilization catalyzed by growing emotional and financial support will continue to drive demand for additional care. And though these changes have attracted new service providers to the market, there is a continuing need for high-quality, cost-effective behavioral healthcare companies to serve the country’s unmet needs.
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1 Source: SAMHSA.
2 Source: Henry J. Kaiser Family Foundation.
3 Source: SAMHSA.