What is mental health parity?

Mental health parity describes the equal approach to mental health and standard medical treatments. In other words, under mental health parity an insurance plan cannot make coverage for a mental health disorder like schizophrenia more difficult or more expensive to obtain than other medical or surgical treatments like heart disease.

Most health plans are required to follow federal mental health parity laws, including employer-sponsored, individual policies and certain Medicaid health plans. These insurance plans have to guarantee that the following are applied equally to mental health services:

  • copays
  • coinsurance
  • out-of-pocket maximums
  • limits on the number of and length of covered inpatient/outpatient visits
  • out-of-network coverage
  • medical necessity criteria

    (which is used to determine whether treatment will be paid for by insurance)

For example, a health plan would not meet parity requirements if the length of inpatient visits covered by insurance were shorter for a patient’s schizophrenia than their heart condition. Nor could a health plan charge higher copays for mental health services than for medical services.