Psych Wards Not Covered by Medicaid Mental Health Rule

It may soon get easier for poor, mentally ill Americans to get treatment, but not in a psychiatric hospital.

Medicaid plans got an initial roadmap from the federal government earlier this month, with a rule proposing directions for how they should conform to a 2008 law known as mental health parity. The law requires insurers to cover mental health services on an equal footing with physical health services.

It’s intended to correct a longstanding problem of insurers either refusing to cover care like therapy or prescription drugs for the mentally ill or covering them at a lower rate. Rules governing private plans had already been released, but this latest rule applies to Medicaid, which is by far the largest payer of mental health services in the U.S.

The proposed rule — which may not be finalized for another year or two — will have varying effects around the country, as the state-run Medicaid programs offer different mental health benefits. Mental health advocates agree that, broadly speaking, it will improve access for the mentally ill because insurers must remove limits on coverage for services they’re already offering.