July 7, 2011

Sources of Payment for Mental Health Treatment for Adults

For many individuals with mental health problems, their willingness to seek and their success in receiving treatment often depend on their ability to pay, either from their own resources or through private or public insurance coverage. Appropriate treatment may be inaccessible because individuals lack any insurance coverage, or the insurance coverage they have for mental health and substance abuse conditions is inadequate. The Mental Health Parity and Addiction Equity Act (MHPAEA) of 2008 and the Affordable Care Act (ACA) of 2010 have the potential to improve access to mental health and substance abuse services. The MHPAEA is expected to improve coverage for people who have limits or caps on their benefits. The ACA is intended to provide access to insurance coverage, including benefits for mental health and substance abuse conditions, for many persons who are currently uninsured.¹

The National Survey on Drug Use and Health (NSDUH) asks respondents aged 18 or older if they received treatment or counseling for any problem with emotions, "nerves," or mental health (hereafter referred to as mental health services) in the past year in inpatient or outpatient settings.^2,3 Respondents who received such services are asked who paid (or would pay) most of the cost of the services. Prescription medications used to treat a mental or emotional condition are not included in this report.

This issue of The NSDUH Report focuses on how individuals who received mental health services in the past year paid for those services, how payment differed for inpatient versus outpatient services, and how much individuals who received mental health services paid out of pocket for their care. All findings presented in this report are annual averages based on combined 2005 to 2009 NSDUH data.

An estimated 15.7 million adults (7.1 percent of all U.S. adults) received any mental health services in the past year, with 14.9 million (6.7 percent) receiving outpatient mental health services and 1.9 million (0.9 percent) receiving inpatient mental health services.⁴

Among adults aged 18 or older who received any mental health services in the past year, the majority (62.6 percent) were covered by private insurance (Figure 1). Approximately one fifth of individuals receiving any mental health services were covered by public insurance: Medicaid and/or the Children's Health Insurance Program (CHIP) covered 10.3 percent, and Medicare covered another 10.8 percent. A small proportion (2.9 percent) were covered by some other (unspecified) form of insurance. About one tenth (10.7 percent) of adults who received any mental health services in the past year were uninsured. It should be noted that, for those individuals who were covered by either private or public insurance, NSDUH does not collect information on what specific mental health services are covered or on the limitations of their coverage.

Figure 1. Sources of Health Insurance among Persons 18 or Older Who Received Mental Health Treatment/Counseling* in the Past Year: 2005 to 2009

Outpatient Mental Health Services. An estimated 34.5 percent of individuals who received outpatient mental health services in the past year indicated that most of the cost for those services was paid by private health insurance (Table 1). For 3.9 million adults (26.2 percent of those receiving outpatient mental health services), the main source of payment was "self or family member." Public health insurance paid most of the cost of outpatient mental health services for an estimated 19.4 percent of adults; this included coverage by Medicare (11.5 percent) and Medicaid (8.0 percent). The Department of Veterans Affairs (VA) or other military program was the main source of payment for 4.7 percent of adults who received outpatient mental health services. In addition, 4.1 percent of individuals who received outpatient mental health services in the past year indicated that these services were free.

Inpatient Mental Health Services. For individuals who received inpatient mental health services, public health insurance was the most common payment source: 43.7 percent of adults had their inpatient mental health services paid for through public insurance. These public insurance sources included Medicare (which paid most of the costs for 26.0 percent of adults receiving inpatient mental health services) and Medicaid (which paid most of the costs for 17.7 percent of adults receiving inpatient mental health services). The VA or other military program paid most of the costs for 4.1 percent of adults receiving inpatient mental health services.

Private insurance was the main source of payment for 18.3 percent of adults who received inpatient mental health services. Self or family member was the main source of payment for an additional 18.8 percent of adults receiving inpatient services. Employers were the main source of payment for 3.8 percent of adults receiving inpatient mental health services. For an estimated 5.3 percent of adults receiving inpatient mental health services, the services were free.

Outpatient Mental Health Services. About one quarter (28.0 percent) of adults who paid out-of-pocket costs for outpatient mental health services in the past year paid less than $100 (Figure 2). About one third (38.4 percent) paid between $100 and $500, 31.3 percent paid between $501 and $5,000, and 2.3 percent paid more than $5,000.

Figure 2. Out-of-Pocket Costs for Mental Health Services among Adults Aged 18 or Older Who Received Outpatient* or Inpatient** Mental Health Services in the Past Year: 2005 to 2009

Among individuals receiving outpatient mental health services who were employed either full or part time, an estimated 5.8 percent paid out-of-pocket costs between $2,001 and $5,000. In comparison, 13.7 percent of unemployed persons had out-of-pocket costs between $2,001 and $5,000.

Inpatient Mental Health Services. Among adults receiving inpatient mental health services who paid out-of-pocket costs, about one quarter (24.8 percent) paid less than $100, 44.5 percent paid between $100 and $2,000, and 21.0 percent paid between $2,001 and $10,000. Around 1 in 10 (9.6 percent) of adults receiving inpatient mental health services who paid out-of-pocket costs paid more than $10,000.

The goal of mental health services is to help individuals achieve recovery and improve the quality of their lives. However, many individuals remain uninsured because of financial barriers, and individuals who are covered by insurance may be undertreated as their insurance plans may limit the number of inpatient days and outpatient visits. These limits often prevent individuals from accessing mental health care at all or from receiving the level of care that could be most effective for their condition.

Almost two thirds (62.6 percent) of the estimated 15.7 million adults who received some form of mental health services in the past year were covered by private insurance, another 21.1 percent were covered by either Medicaid or Medicare, and an estimated 10.7 percent were uninsured. However, over one quarter (26.2 percent) of adults who received outpatient mental health services reported that self or family member paid most of the costs of their outpatient mental health services, and among persons who received inpatient mental health services, only 18.8 percent reported that private insurance paid most of the costs of their inpatient services. These findings suggest that even though the majority of adults have some form of health insurance coverage, there are significant limitations on coverage for mental health services.

Analyses of mental health benefits in private employer-sponsored health plans from 1997 to 2003 found that while most insurance plans continued to provide some level of coverage for mental health services, a majority of plans also continued to impose different benefit limitations for mental health than for medical treatment; in particular, there was a sharp increase in the use of limits on inpatient days and outpatient visits between 1997 and 2003.⁵ The goal of MHPAEA is to improve coverage as well as access to appropriate and adequate treatment by eliminating caps and limits on benefits for mental health and substance abuse services.