Pre-existing mental health conditions have resulted in nearly automatic rejections by insurance companies. That changes Jan. 1, 2014, under the Affordable Care Act.
Mental illness or substance abuse issues cannot be used as reasons to reject insurance coverage applications under the Act. Those specific issues have been a major cause of lack of health insurance, officials say.
In addition, mental health services are considered part of the “essential benefits package” of coverages required of almost insurers, including those selling policies via the new health exchanges (marketplaces).
Until then, most insurance companies are able to deny applications for health coverage because of a pre-existing mental health condition. Some will sell a policy, but exclude coverage for mental health.
This creates a short-term problem for those needing immediate help. Many pre-existing condition programs have stopped accepting new applicants in preparation for the 2014 reforms.
In California, the Pre-Existing Condition Insurance Plan suspended new enrollments for applications received after March 2, 2013. It cites limits in federal funding (Existing coverage is not affected until Jan. 1, 2014.) The very short list of current alternatives in California includes the Major Risk Medical Insurance Program and Medi-Cal.
Federal rules adopted in 2010 prohibited group health insurance plans from restricting access to mental health care or substance abuse treatment by limiting benefits or requiring higher deductibles than those that apply to general medical conditions (the Mental Health Parity and Addiction Equity Act).
A summer 2013 study by the California Healthcare Foundation found that about half of adults and two-thirds of adolescents in the state with mental health needs did not get treatment.
The study cited “much higher rates of mental illness at lower income levels” as well as “significant racial and ethnic disparities.” Obamacare via Covered California would address both of those issues, with lower-income residents guaranteed health care coverage at little or no cost to them.
One of the biggest effects of the Affordable Care Act will be widespread availability of mental-health and substance-abuse care for those without pre-existing conditions, but simply couldn’t afford insurance. The Act provides for tax credits and lower deductibles for those who qualify.