About Private Health Insurance Mental Health Coverage

The Mental Health Foundation notes that 25 percent of people experience some type of mental health condition each year. Private health insurance that covers these conditions is becoming increasingly important. Not all health policies include mental health coverage. Consumers must read their policies to ensure the benefits are available if they are ever needed.

Significance

• Mental illness includes a large number of conditions with differing degrees of severity. An individual who has experienced the death of a loved one may develop depression beyond that of normal grief and need help to recover. Preventive care to delay or lessen symptoms of dementia or Alzheimer's increases the quality of life for the elderly. Other mental illnesses may be the result of genetic defects or traumatic brain injury. Treatment can be expensive if a person does not have private health insurance with mental health coverage.

Types

• Three main factors affect the services offered through private health insurance: individual state laws, the company providing the policy and the type of policy. Private health insurance is available under different types of plans. A health-maintenance organization, or HMO, offers a limited network of doctors and service providers. Those individuals with an HMO are only eligible to receive services from within the network. When the health plan is a fee-for-service, a preferred provider organization or a medical savings account, individuals may choose any doctor or mental health care facility.

Limits

• Mental health coverage varies according to the private health insurance plan. According to the National Mental Health Information Center, the Mental Health Parity Act of 1996 requires plans offering mental health benefits "to set lifetime dollar limits equivalent to limits for medical/surgical benefits," but does not require plans to cover mental health services.

Substance Abuse

• Detoxification and rehabilitation are the two main categories of substance abuse treatment, according to California's Legislative Analyst's Office. State laws may set separate standards for alcoholism and drug addiction. In California, for example, a private health insurance company must cover alcoholism treatment but can choose whether it covers drug abuse.

Effects

• "Your mind and body work better when they work together," according to Aetna, a health insurance provider. Doctors understand the connections between physical and mental health. Private insurance companies also are aware of this connection and how untreated mental health conditions actually increase the need for medical services. Cape Fear Healthy Minds notes that treating mental illness, especially depression, "is associated with improved outcomes for chronic physical disorders." Providing coverage for mind and body has the potential to save costs for the insurance company.