Matters + Minds

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umbrella of traditional health insurance, whether enrollees are covered via commercial or public plans (Medicaid or Medicare). Both sectors play a critical role in how mental health services are delivered and accessed. It's important to note that the commercial, or private, insurance industry has been notoriously slow to pay for mental health services in general, including addiction services. The 2008 passage of the Domenici-Wellstone law, or MPHAEA, marked the first  there was a federal requirement (see Federal Legislation timeline below) that commercial insurers had to improve their payment for behavioral health conditions to some extent.

 

Below is general information about the private health insurance industry as a whole. In addition, you can find out information about behavioral health coverage in Medicare and Medicaid, as well as the mental health services that are covered in individual and small group plans through the ACA marketplace. Click on a question below to learn more!

Behavioral Health Insurance Coverage

what is the federal legislative history on private health insurance?
what are the private insurance markets & how competitive are they?

Although there a myriad of reasons that health coverage has become increasingly expensive, one of them has to do with the fact that the health insurance market is concentrated in the hands of only a few corporations. Where there is little competition, those who have the most control of that market have the most control over prices. There are 3 main types of markets that are often discussed and researched: Large group, small group and individual markets:

Large group market:

Due to the ERISA Act (see above timeline), a lot of large employers self-insure, rather than buying health insurance policies. Self-insured employers pay for each out of pocket claim as they go instead of paying a fixed premium. Employers often set up a designated trust fund (including corporate and employee contributions) to pay the claims. The benefits of this are that employers do not have to pre-pay for coverage and are not subject to conflicting state health insurance regulations and taxes.  

Small Group & Individual market:

Small group markets typically comprise of small firms who buy policies from the insurance companies. As for individual markets, they do not have access to any form of employer sponsored health insurance. Historically, the private market for individual/family insurance has been overwhelmingly inaccessible due to high premium costs, but with the passage of ACA, more individuals have gained access to commercial insurance plans due to federal subsidies. 

Competition in Private Health Insurance Markets:

Below are some statistics to get a sense of just how little competition there is among private health insurers. Under this section's Sources, you can also check out the Government Accountability Office Report on Private Health Insurance, which  outlines private health insurance ​markets among states and in the US as a whole.

-According to a 2015 study by the American Medical Association, a single health insurer has at least 50% of market share in 41 urban markets nationally.

- According to a 2011 report by Kaiser Permanente analysis, states in the West generally had more competitive markets. States with less competition were more rural states in the upper Midwest and  parts of the South and Mid-Atlantic. For example, the market share of the largest plan in the small group market ranged from less than 24% in Oregon and Pennsylvania to 96% in Alabama; in the individual market, the market share held by one plan ranged from 21% in Wisconsin to 86% in Alabama. 

-In 2013, enrollment was concentrated among the three largest insurers in most states. In each of the 3 market segments (individual, small group and large group markets), the three largest insurers had at least 80 percent of the total enrollment in at least 37 states.


 

Major Health Insurance Companies in the US:

Below are the top 3 largest health insurers by market share, according to the Dark Daily article based on the American Medical Association study, "Competition in Health Insurance: A Comprehensive Study of U.S. Markets." The others listed are also large health insurers in the US, but not necessarily ranked in order of market share.  

Anthem Inc (formerly Wellpoint Inc; includes Blue Cross Blue Shield): According to the AMA study, of the 388 metropolitan areas, Anthem has the greatest market share in 82.

HCSC Group: Biggest market share in 37 metropolitan areas

UnitedHealth Group: Top market share in 35 markets

 

Humana

Aetna

Highmark

Cigna

Independence Blue Cross Group

Kaiser Foundation Group

Blue Shield of California Group

Carefirst Inc. Group

Molina Healthcare Inc. Group

Wellcare Group

 

falls under the larger

This determines that any share of premiums that are employer-paid are not taxable income. For employees, this means there was no income tax paid on what their employer paid for their health insurance. Also, social security taxes were not placed on top of the amount of money that the employer was paying for health insurance. This expanded the market greatly. 

This act required that, if an employer is offering insurance to employees and a qualified Health Maintenance Organization was in the immediate area, the HMO must be offered as one of the choices to the employees.

ERISA Act allowed employers to self-insure their employees and thus avoid state taxes on the premiums for insurance policies, as well as any state requirements about what types of benefits must be covered. Self-insured employers pay for each out of pocket claim as they are incurred instead of paying a fixed premium to an insurance carrier, which is known as a fully-insured plan. This is particularly attractive for large employers, as they do not have to pre-pay for coverage and are not subject to conflicting state health insurance regulations and taxes.  

(COBRA): This act allowed those covered by group insurance to continue their coverage when they may have otherwise lost it (i.e., through death of a spouse). It also expanded Medicaid eligibility for low-income children and pregnant women. 

This determines that any share of premiums that are employer-paid are not taxable income. For employees, this means there was no income tax paid on what their employer paid for their health insurance. Also, social security taxes were not placed on top of the amount of money that the employer was paying for health insurance. This expanded the market greatly. 

This determines that any share of premiums that are employer-paid are not taxable income. For employees, this means there was no income tax paid on what their employer paid for their health insurance. Also, social security taxes were not placed on top of the amount of money that the employer was paying for health insurance. This expanded the market greatly. 

This determines that any share of premiums that are employer-paid are not taxable income. For employees, this means there was no income tax paid on what their employer paid for their health insurance. Also, social security taxes were not placed on top of the amount of money that the employer was paying for health insurance. This expanded the market greatly. 

(MPHAEA)

Act

Reconciliation Act

Security

 
 
how is behavioral health covered in public insurance & marketplace?
 

Medicare:

Medicare Part B: In general, after you pay your yearly Part B deductible for visits to a doctor or other health care provider to diagnose or treat your condition, you pay 20% of the Medicare-approved amount if your health care provider accepts assignment. If you get your services in a hospital outpatient clinic or hospital outpatient department, you may have to pay an additional copayment or coinsurance amount to the hospital. 

 

Medicaid: 

Medicaid programs are designed and administered by each state. Again, as part of the ACA, insurers must cover mental health services to some extent. Check out your state's Medicaid website to find out about their particular program. 

Individual Plans via ACA Marketplace:

Due to the Affordable Care Act, private individual and family plans are available to purchase through state exchange marketplaces. Some states have set up their own exchange website, while others have left that up to the federal government. Either way, you can go online and “shop” for plans that you are eligible for.  There are 4 tiers of plans: Bronze, Silver, Gold and Platinum. Bronze plans are typically for those who do not use a lot of medical services (i.e., young, healthy individuals), so the annual deductible is higher but monthly premiums are lower. Platinum plans have the highest monthly premiums, but deductibles are low.

 

Remember, mental health services are one of the Essential Health Benefits (see all link) that insurers are required to cover. However, while some higher-level plans provide solid coverage, the Bronze plans have high deductibles, which still make it difficult for an individual to afford outpatient mental health services.