Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Sep 2, 2021

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The lowdown...

  • The Affordable Care Act requires all plans sold on the open marketplace to cover services related to mental health, including behavioral therapy and inpatient care.
  • Obamacare treats substance abuse treatment as an essential benefit.
  • Most employer-sponsored health plans do not consider mental health an essential benefit. However, many plans do offer mental health coverage
  • Your insurance policy will clearly define whether or not it covers your psychologist’s fees
  • The Federal Parity Law makes it mandatory for insurance companies to treat mental health disorders the same as medical coverage

The Affordable Care Act, also known as Obamacare, expanded insurance coverage to people who suffered from mental health and substance abuse disorders. The law required that all insurance policies offered through the Health Insurance Marketplace, including individual and small business plans, provide recipients with mental health coverage.

The law also required insurance plans to offer coverage for behavioral therapy and inpatient care. Because of the ACA, most insurance plans now offer preventative services such as behavioral assessments for children and depression screening for adults. Depending on the state you live in, there are also parity laws for telehealth visits.

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How does health insurance cover substance abuse treatment?

Drug and alcohol treatment fall under the 10 essential health benefits outlined by the ACA. After 2014, all insurance plans were required to offer care under the 10 essential benefit categories at no dollar limit. This meant that insurance companies could not cap the dollar amount for services that fell under the 10 categories.

The treatment options included psychotherapy, counseling and inpatient services for substance abuse disorders. However, some plans were grandfathered in before the enactment of the ACA, and some plans do not cover mental health services to the same extent as others. In theory, substance abuse treatment could also provide other mental health benefits. However, in the past, different mental health treatment plans were sometimes coded differently.

Insurance companies can still require patients to go to an in-network provider for lower rates if there’s one within a reasonable distance. This would apply to any mental health treatment with most companies.

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How does mental health care work with employer sponsored plans?

Before the enactment of the Affordable Care Act, most Americans received their health insurance coverage from their employers. In 2010, a law took effect called the Mental Health Parity and Addiction Equity Act, which required employer-sponsored health plans to treat mental health disorders the same as medical disorders.

At the time, many insurance companies would only pay a small portion of a plan holder’s mental health expenses while covering most, if not all, of the medical-related expenses.

Known as The Federal Parity Act, the law prevents employer-based health plans from discriminating against people who seek coverage for mental health disorders. Keep in mind, your privacy is protected whether you’re going through an employer or network provider associated with the free market. An employer may pay the bulk of your insurance premium, but they don’t have access to your mental healthcare whether you’re talking about the doctors you choose or the coding and mental health care plan your doctor prescribes. However, the law ensuring parity does not apply in these three instances:

  • Employers who offer plans with less than 50 workers
  • Government employee plans run by the participant’s state, primarily for university professors and teachers
  • Medicare

How much can you expect to pay for mental health treatment?

Your insurance policy summary will clearly state whether or not fees from your psychologist or any other mental health fees are covered. You can find your company’s health insurance policy summary on its website.

The summary normally looks like a chart with two different shades of blue. Here is a summary example from the National Association of Insurance Commissioners. Your company’s insurance summary should contain a section detailing what type of mental health coverage you can expect to receive.

Reducing Mental Health Treatment Costs/No Coverage

If you do not have a health insurance plan or your plan offers limited coverage, there are some resources that can help you reduce your costs or help you find a plan offering mental health coverage. When you are comparison shopping, whether it is on the Marketplace or an individual plan, pay close attention to the insurance summary from the company explaining its services.

Although you do not currently have coverage from that company, you can still access the insurance summary. Call the company’s customer service number and ask them to provide details regarding mental health coverage.

In some instances, customer service representatives from insurance companies will point you toward other companies offering affordable plans or low-cost mental health services.

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A Closer Look at Mental Health Coverage and the Fair Parity Law

It is up to your psychologist to decide whether or not he or she accepts your mental health insurance coverage. If your psychologist declines to accept your insurance, it is not a violation of the parity law.

Since most insurance companies have not increased their reimbursement rates for psychologists, many mental health physicians decline to accept health insurance coverage.

According to, many insurance companies reduced their reimbursement rates to psychologists and psychiatrists. Because of the reduction, most mental health professionals do not participate in network care.

Support and Affordability

It is up to you to understand your mental health coverage. Therefore, talk to your insurance company about copayments, using provider networks and your deductibles. Find out first if your psychologist accepts the mental health coverage under your health insurance plan.

If you need health insurance with a better mental health network or just need coverage period, check out the free tool below. Enter your zip code and explore a wide variety of personalized options tailored to suit your needs and budget!