JULY 2019 Mental Health and Substance Use Disorder Parity under the ACA: National and State Estimates of Parity Gains as of 2017 Authors INTRODUCTION In addition to expanding access to health insurance coverage for millions of Americans through Caroline Au Yeung, MPH subsidized individual market coverage and state Medicaid expansions, the federal Affordable Care Act Research Fellow, State (ACA) applied Mental Health (MH) and Substance Use Disorder (SUD) coverage and parity mandates to Health Access Data beneficiaries in the individual and small-group markets and to Medicaid expansion beneficiaries. The Assistance Center following brief details the mechanisms by which the ACA applied these mandates and presents national Colin Planalp, MPA and state-level estimates of the number of people with insurance coverage that must newly provide Senior Research Fellow, MH/SUD parity under the ACA. These estimates provide important context for policymakers and others State Health Access Data engaged in the ongoing debate about repealing, modifying, or replacing the ACA. Assistance Center BACKGROUND This work is supported How the ACA Expanded Parity for Mental Health and Substance Use Disorder Treatment by the California Health Before the passage of the ACA in 2010, national legislation about equitable coverage for MH/SUD Care Foundation, based treatment applied only to large-group (i.e., employer-sponsored) health plans. The Mental Health Parity in Oakland, California. Act of 1996 (MHPA) prohibited large-group plans that offer MH coverage from imposing limits on MH coverage that are more restrictive than coverage limits for physical conditions, and the subsequent Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA) expanded upon the MHPA to require parity for SUD treatment coverage as well (Centers for Medicare and Medicaid Services [CMS], n.d.[a]). The ACA extended these MH/SUD parity protections beyond the large-group market to the individual and small-group markets and to Medicaid expansion beneficiaries. The ACA also went a step further than large-group MH/SUD parity rules—which require parity if MH/SUD benefits are offered but do not require that MH/SUD benefits be included—by mandating that MH/SUD treatment be included in individual, small-group, and Medicaid expansion coverage. The ACA implemented these changes through three primary mechanisms. First, the law established ten Essential Health Benefits (EHBs) that must be covered by individual and small- group health insurance plans and included MH/SUD services as an EHB. Second, the law expanded the existing (i.e., large-group) parity protections described above to establish national standards for the equitable coverage of MH/SUD treatment by individual and small-group health insurance plans, such that these plans must not only offer MH/SUD benefits under EHB rules but must also offer these benefits in full parity with benefits for physical health conditions in compliance with MHPAEA (CMS, n.d.[b]). Third, the law gave states the option of expanding Medicaid coverage to all individuals up to 138% of the Federal Poverty Level (FPL) and required states implementing Medicaid expansion to provide their expansion populations with MH/SUD benefits that meet the EHB and parity requirements in order to qualify for enhanced federal Medicaid funding for this group (Frank, Beronio, & Glied, 2014). Expanding Equitable Coverage of Mental Health and Substance Use Disorder Treatment under the ACA: Key Provisions Essential Health Benefits: Individual and small-group health insurance plans must cover ten Essential Health Benefits established under the ACA—including mental health and substance use disorder treatment benefits. National Parity Protections: National mental health and substance use disorder parity protections now apply to the individual and small-group health insurance markets. Medicaid Expansion: States must offer comprehensive mental health and substance use disorder benefits to individuals who become newly eligible for Medicaid through the ACA expansion option. State Health Access Data Assistance Center 1 METHODS Parity in the Individual and Small-Group Market Before the ACA mandated equitable MH/SUD coverage in the individual and small-group markets, coverage and parity for MH/ SUD treatment in these markets was addressed unevenly through a patchwork of state laws: Some states had neither MH/SUD coverage laws nor MH/SUD parity laws for their individual and small-group markets, while others had individual and small-group coverage and parity laws for both MH and SUD treatment, and others fell somewhere in between. Under this scenario, the majority of people insured through small-group and individual plans had some MH and/or SUD coverage but parity with physical health benefits was limited. Figure 1 provides an overview of the estimated share falling into each group, based on analysis conducted by the Assistant Secretary for Planning and Evaluation (ASPE). For this analysis, we estimated the number of people whose insurance coverage was newly subject to ACA MH/SUD parity rules by applying the national proportions of individuals with only some MH/SUD coverage to the size of the individual and small-group markets in states without full pre-ACA parity laws for these markets. For example, the estimated size of the individual market in 2017 in Alabama was approximately 213,000. Alabama did not have a mental health parity law in place prior to the ACA, so we assume that the number of people impacted by the parity requirements in the individual market in 2017 is—per ASPE's estimates of access to MH parity pre-ACA (Figure 1)—equivalent to 82% of the total market, or approximately 175,000. Similarly, there were approximately 217,000 enrolled in Alabama’s small-group market, and we assume that the number of people impacted is equivalent to 95% of this market, or approximately 206,000. We apply the same method to estimate the impact of SUD parity in both markets, where we assume that 66% of the individual and 95% of the small-group market are being impacted by ACA parity requirements in states without robust parity laws prior to the ACA. States with pre-ACA parity mandates for MH benefits that were as robust as the ACA’s are excluded from MH estimates, and states with pre-ACA parity mandates for SUD benefits that were as robust as the ACA’s are excluded from SUD estimates. Some states also had parity laws that were weaker than the ACA’s; in cases where the ACA provided additional requirements beyond comparatively weaker state parity laws, we included those state populations in our estimates of people affected by the ACA. Figure 1. Mental Health & Substance Use Disorder Coverage Nationwide Before the ACA: Individual & Small-Group Market Pre-ACA Mental Health Coverage Pre-ACA Substance Use Disorder Coverage Some Mental Health Coverage Some Substance Use Disorder Coverage Mental Health Coverage in Parity with Physical Health Benefits Substance Use Disorder Coverage in Parity with Physical Health Benefits Individual Small-Group Individual Small-Group Market Market Market Market Sources: Analysis by the Assistant Secretary for Planning and Evaluation (ASPE). https://aspe.hhs.gov/system/files/pdf/76591/rb_mental.pdf , https://aspe.hhs.gov/system/files/pdf/76356/ib.pdf , https://aspe.hhs.gov/system/files/pdf/76591/rb_mental.pdf , https://aspe.hhs.gov/system/files/pdf/76356/ib.pdf , https://aspe.hhs.gov/system/files/pdf/180086/rb.pdf Parity for the Medicaid Expansion Population Before the ACA gave states the option to expand Medicaid to all individuals at or below 138% FPL, many low-income adults were ineligible for Medicaid. Adults in this income range now have access to Medicaid coverage in ACA expansion states, with newly eligible individuals having access to coverage that is required to provide comprehensive MH/SUD benefits in compliance with ACA parity requirements. According to data from the Centers for Medicare and Medicaid Services (CMS), the enrolled Medicaid expansion group numbered 12.6 million nationwide in Fiscal Year 2017 (the most recent year for which Medicaid enrollment data from CMS are available; Kaiser Family Foundation, n.d.). In this analysis, we treat all enrolled individuals in an expansion state’s newly eligible Medicaid population as having gained access to MH/SUD coverage subject to full parity under the ACA. State Health Access Data Assistance Center 2 RESULTS Population with Coverage Newly Subject to Mental Health Parity Rules under the ACA In total, we estimate that over 39 million individuals nationwide had health insurance that was subject to the ACA’s expanded MH parity requirements as of 2017 (Table 1). Of these, 12.1 million were enrolled in individual plans and 14.4 million in small-group plans in states that did not have pre-ACA MH parity laws for their individual and small-group markets. The remainder (almost 13 million) were newly eligible Medicaid expansion enrollees. As shown in Table 1, the number of individuals in any given state covered by health insurance newly subject to MH parity mandates under the ACA was driven by three factors: whether state MH parity laws were in place prior to the ACA, the size of the state’s individual and small-group markets, and the size of the state’s Medicaid expansion population. For example, over 8 million individuals were affected in California, which had pre-ACA parity laws that were less robust than the ACA’s for its comparatively large individual and small-group markets and had a Medicaid expansion population of over 3.8 million. In Vermont, which had an individual and small-group parity law in place prior to the ACA and had pre-ACA Medicaid eligibility levels exceeding ACA expansion levels, the ACA’s parity provisions did not change the number of individuals with coverage subject to MH parity mandates. Table 1. Estimated Impact of Mental Health (MH) ACA Parity Requirements State Individual Market Small-Group Market Medicaid Expansion Total Alabama 175,000 206,000 No Medicaid expansion 381,000 Alaska 15,000 15,000 37,000 67,000 Arizona 187,000 186,000 112,000 485,000 Arkansas Had parity pre-ACA Had parity pre-ACA 318,000 318,000 California 1,940,000 2,893,000 3,810,000 8,643,000 Colorado 218,000 287,000 451,000 956,000 Connecticut Had parity pre-ACA Had parity pre-ACA 213,000 213,000 Delaware 25,000 43,000 12,000 80,000 Florida 1,461,000 619,000 No Medicaid expansion 2,080,000 Georgia 416,000 320,000 No Medicaid expansion 736,000 Hawaii 32,000 121,000 23,000 176,000 Idaho 105,000 75,000 No Medicaid expansion 180,000 Illinois 401,000 562,000 664,000 1,627,000 Indiana 155,000 174,000 323,000 652,000 Iowa 117,000 159,000 143,000 419,000 Kansas 116,000 128,000 No Medicaid expansion 244,000 Kentucky 107,000 118,000 480,000 705,000 Louisiana 141,000 180,000 446,000 767,000 Maine 65,000 66,000 No Medicaid expansion 131,000 Maryland 231,000 291,000 307,000 829,000 Massachusetts 263,000 461,000 Medicaid expanded pre-ACA 724,000 Michigan 335,000 604,000 634,000 1,573,000 Minnesota 130,000 291,000 206,000 627,000 Mississippi 99,000 86,000 No Medicaid expansion 185,000 Missouri 253,000 235,000 No Medicaid expansion 488,000 Montana 50,000 49,000 85,000 184,000 Nebraska 100,000 68,000 No Medicaid expansion 168,000 Nevada 101,000 96,000 212,000 409,000 New Hampshire 64,000 73,000 57,000 194,000 New Jersey 276,000 416,000 580,000 1,272,000 New Mexico 54,000 Had parity pre-ACA 269,000 323,000 New York 333,000 1,304,000 524,000 2,161,000 North Carolina 495,000 298,000 No Medicaid expansion 793,000 North Dakota 41,000 56,000 20,000 117,000 Ohio 276,000 428,000 655,000 1,359,000 Oklahoma 128,000 177,000 No Medicaid expansion 305,000 Oregon 173,000 Had parity pre-ACA 418,000 591,000 Pennsylvania 400,000 711,000 758,000 1,869,000 Rhode Island 35,000 55,000 72,000 162,000 South Carolina 198,000 106,000 No Medicaid expansion 304,000 State Health Access Data Assistance Center 3 Table 1. Estimated Impact of Mental Health (MH) ACA Parity Requirements (cont'd) State Individual Market Small-Group Market Medicaid Expansion Total South Dakota 52,000 54,000 No Medicaid expansion 106,000 Tennessee 239,000 250,000 No Medicaid expansion 489,000 Texas 990,000 928,000 No Medicaid expansion 1,918,000 Utah 183,000 177,000 No Medicaid expansion 360,000 Vermont Had parity pre-ACA Had parity pre-ACA Medicaid expanded pre-ACA 0 Virginia 383,000 428,000 No Medicaid expansion 811,000 Washington 245,000 284,000 608,000 1,137,000 West Virginia 29,000 38,000 183,000 250,000 Wisconsin 216,000 295,000 No Medicaid expansion 511,000 Wyoming 25,000 19,000 No Medicaid expansion 44,000 Total 12,073,000 14,430,000 12,620,000 39,123,000 Notes and Sources: Status of pre-ACA MH coverage and parity laws drawn from a review of state records tracked by Kaiser Family Foundation (KFF). Pre-ACA State Mandated Benefits in the Individual Health Insurance Market: Mandated Coverage in Mental Health, retrieved from https://www.kff.org/other/state-indicator/pre-aca-state-mandated-bene- fits-in-the-individual-health-insurance-market-mandated-coverage-in-mental-health/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22as- c%22%7D; "Pre-ACA State Mandated Benefits in the Small Group Health Insurance Market: Mandated Coverage in Mental Health," available at https://www.kff.org/other/ state-indicator/pre-aca-state-mandated-benefits-in-the-small-group-health-insurance-market-mandated-coverage-in-mental-health/?currentTimeframe=0&sortModel=%7B%2- 2colId%22:%22Location%22,%22sort%22:%22asc%22%7D We defined parity as states where parity laws were as robust as those in place in the ACA. See text for additional information. Estimates of the small-group and individual market based on data from the National Association of Insurance Commissioners (NAIC). To estimate the impact of parity requirements, total individual and small-group enrollment were adjusted to reflect the estimated share in these markets (18% and 5% respectivley) with parity prior to the ACA. See text and Figure 1 for more detailed information. Medicaid expansion enrollment as of FY 2017, retrieved from the Kaiser Family Foundation website https://www.kff.org/health-reform/state-indicator/medicaid-expansion-enroll- ment/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D Population with Coverage Newly Subject to Substance Use Disorder Parity Rules under the ACA Nationwide, we estimate that over 36.4 million individuals had coverage that was subject to the ACA’s expanded SUD parity requirements as of 2017 (Table 2). Of these, 9.8 million were enrolled in individual plans and 14 million in small-group plans in states without pre-ACA SUD parity laws for their individual and small-group markets. The remainder (almost 12 million) were newly eligible Medicaid expansion enrollees. As with MH parity, the number of individuals in any given state covered by health insurance newly subject to SUD parity mandates under the ACA was driven primarily by whether state SUD parity laws were in place prior to the ACA, as well as the size of the state’s individual and small-group markets and its Medicaid expansion populations (Table 2). The total number of individuals with health insurance newly subject to the ACA’s expanded SUD parity requirements ranged from zero in Massachusetts, which had a pre-ACA SUD parity law and pre-ACA Medicaid eligibility levels exceeding ACA expansion levels, to over 8 million in California, which did not have a robust pre-ACA SUD parity law and, as previously noted, had a Medicaid expansion population of over 3.8 million. Table 2. Estimated Impact of Substance Use Disorder (SUD) ACA Parity Requirements State Individual Market Small-Group Market Medicaid Expansion Total Alabama 141,000 206,000 No Medicaid expansion 347,000 Alaska 12,000 15,000 37,000 64,000 Arizona 151,000 186,000 112,000 449,000 Arkansas 259,000 85,000 318,000 662,000 California 1,561,000 2,893,000 3,810,000 8,264,000 Colorado 175,000 287,000 451,000 913,000 Connecticut Had parity pre-ACA Had parity pre-ACA 213,000 213,000 Delaware Had parity pre-ACA Had parity pre-ACA 12,000 12,000 Florida 1,176,000 619,000 No Medicaid expansion 1,795,000 Georgia 335,000 320,000 No Medicaid expansion 655,000 Hawaii 26,000 121,000 23,000 170,000 Idaho 85,000 75,000 No Medicaid expansion 160,000 Illinois 323,000 562,000 664,000 1,549,000 Indiana 125,000 174,000 323,000 622,000 Iowa 94,000 159,000 143,000 396,000 Kansas 93,000 128,000 No Medicaid expansion 221,000 Kentucky 86,000 118,000 480,000 684,000 Louisiana 113,000 180,000 446,000 739,000 State Health Access Data Assistance Center 4 Table 2. Estimated Impact of Substance Use Disorder (SUD) ACA Parity Requirements (cont'd) State Individual Market Small-Group Market Medicaid Expansion Total Maine 52,000 Had parity pre-ACA No Medicaid expansion 52,000 Maryland 186,000 291,000 307,000 784,000 Massachusetts Had parity pre-ACA Had parity pre-ACA Medicaid expanded pre-ACA 0 Michigan 269,000 604,000 634,000 1,507,000 Minnesota 105,000 291,000 206,000 602,000 Mississippi 80,000 86,000 No Medicaid expansion 166,000 Missouri 203,000 235,000 No Medicaid expansion 438,000 Montana 41,000 49,000 85,000 175,000 Nebraska 80,000 68,000 No Medicaid expansion 148,000 Nevada 81,000 96,000 212,000 389,000 New Hampshire 52,000 73,000 57,000 182,000 New Jersey 222,000 416,000 580,000 1,218,000 New Mexico 43,000 54,000 269,000 366,000 New York 268,000 1,304,000 524,000 2,096,000 North Carolina 399,000 298,000 No Medicaid expansion 697,000 North Dakota 33,000 56,000 20,000 109,000 Ohio 222,000 428,000 655,000 1,305,000 Oklahoma 103,000 177,000 No Medicaid expansion 280,000 Oregon 139,000 Had parity pre-ACA 418,000 557,000 Pennsylvania 322,000 711,000 758,000 1,791,000 Rhode Island 28,000 55,000 72,000 155,000 South Carolina 159,000 106,000 No Medicaid expansion 265,000 South Dakota 42,000 54,000 No Medicaid expansion 96,000 Tennessee 193,000 250,000 No Medicaid expansion 443,000 Texas 797,000 928,000 No Medicaid expansion 1,725,000 Utah 148,000 177,000 No Medicaid expansion 325,000 Vermont 22,000 48,000 Medicaid expanded pre-ACA 70,000 Virginia 308,000 428,000 No Medicaid expansion 736,000 Washington 197,000 284,000 608,000 1,089,000 West Virginia 23,000 38,000 183,000 244,000 Wisconsin 174,000 295,000 No Medicaid expansion 469,000 Wyoming 20,000 19,000 No Medicaid expansion 39,000 Total 9,766,000 14,047,000 11,872,000 36,433,000 Notes and Sources: We defined parity as states where parity laws were as robust as those in place in the ACA. See text for additional information. Estimates of the small group and individual market based on data from the National Association of Insurance Commissioners (NAIC). To estimate the impact of parity requirements, total individual and small group enrollment were adjusted to reflect the estimated share in these markets (34% and 5% respectivley) with parity prior to the ACA. See text and Figure 1 for more detailed information. Medicaid expansion enrollment as of FY 2017, retrieved from the Kaiser Family Foundation website https://www.kff.org/health-reform/state-indicator/ medicaid-expansion-enrollment/?currentTimeframe=0&sortModel=%7B%22colId%22:%22Location%22,%22sort%22:%22asc%22%7D DISCUSSION The ACA expanded access to health insurance coverage with mandated parity for MH/SUD treatment to millions of individuals insured through the individual and small-group market and through state Medicaid expansions. However, it is important to note that the expansion of coverage parity legislation does not necessarily ensure access to equitable MH/SUD services. Some plans may not be in compliance with the ACA’s coverage parity rules. For example, a federal judge ruled in March 2019 that a large national health insurer had improperly restricted coverage of mental health and substance use disorder treatments (Abelson, 2019). As a result, parity regulations are only meaningful from an access perspective if they are enforced. Responsibility for parity enforcement is shared by the federal government and the states, but in practice it falls primarily to the states because theyoversee a larger share of the insurance market, including fully insured group plans, individual plans, smaller employer-funded plans, and —in Medicaid expansion states—Alternative Benefit Plans. With each state enforcing parity individually, the nature and extent of enforcement is inconsistent across the country, with many violations continuing to occur as many state regulators face limitations in their ability to enforce parity. A recent collaborative report led by by the Kennedy-Satcher Center for Mental Health Equity at Morehouse School of Medicine recommends that states empower regulatory agencies to enforce MH/SUD parity statutes, require monitoring agencies to regularly report on steps taken to enforce compliance, and mandate that all health benefit plans submit regular (e.g., annual) analyses demonstrating compliance with parity laws (Douglas et al., 2018). State Health Access Data Assistance Center 5 REFERENCES Abelson, R. (2019). Mental Health Treatment Denied to Customers by Giant Insurer’s Policies, Judge Rules. The New York Times. 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