1 Patient Protection and Affordable Care Act (ACA), Pub. L. No. 111-148, 124 Stat. 119 (2010), amended by Health Care and Education Reconciliation Act, Pub. L. No. 111-152, 124 Stat. 1029 (2010) (to be codified primarily in scattered sections of 42 U.S.C.). Section 1302(b)(1)(E) of the Affordable Care Act provides: “The Secretary [of HHS] shall define the essential health benefits, except that such benefits shall include at least the following general categories and the items and services covered within the categories: … (E) Mental health and substance use disorder services, including behavioral health treatment.”

2 See Tovino, Stacey A., All Illnesses Are (Not) Created Equal: Reforming Federal Mental Health Insurance Law, 49 Harv. J. On Legis. 1 (2012)Google Scholar.

3 See id.

4 See Tovino, Stacey A., Reforming State Mental Health Parity Law, 11 Hous. J. Health L. & Pol’Y 455 (2011)Google Scholar.

5 See Tovino, Stacey A., Further Support for Mental Health Parity Law and Mandatory Mental Health and Substance Use Disorder Benefits, 21 Annals Health L. 147 (2012)Google Scholar.

6 Id.

7 Id.

8 ACA, Pub. L. No. 111-148, § 1302(b)(1), 124 Stat. 119 (2010).

9 See id. § 1302(b)(1)(A)-(J).

10 INST. OF MED., PERSPECTIVES ON ESSENTIAL HEALTH BENEFITS: WORKSHOP REPORT 1 (2011) [hereinafter WORKSHOP REPORT].

11 Id. at 1-2.

12 Id.

13 Id. at 2, 161 app. B (“Web-Based Questions for Public Input on Determination of Essential Health Benefits.”).

14 Id. at 2 box S-1.

15 Id.

16 Id. at 15.

17 INST. OF MED., ESSENTIAL HEALTH BENEFITS: BALANCING COVERAGE AND COST (2011) [hereinafter CONSENSUS REPORT].

18 Id. at 2.

19 Id. at 3-12.

20 Id. at 4 fig.S-1.

21 Id. at 90.

22 Id. at 8-12.

23 CTR. FOR CONSUMER INFO. & INS. OVERSIGHT, U.S. DEP't HEALTH & HUMAN SERVS., ESSENTIAL HEALTH BENEFITS BULLETIN 3 (2011) [hereinafter EHB BULLETIN], available at http://cciio.cms.gov/resources/files/Files2/12162011/essential_health_benefits_bulletin.pdf.

24 Id.

25 Id. at 1.

26 Id. at 8-12; see also Rebecca Farley, Essential Health Benefits: What Does the New HHS Guidance Mean for Behavioral Health, MENTAL HEALTHCARE REF. (Dec. 22, 2011), http://mentalhealthcarereform.org/essential-health-benefits-what-does-the-new-hhs-guidance-meanfor-behavioral-health/.

27 EHB BULLETIN, supra note 23, at 8.

28 Id.

29 Id. at 12.

30 ACA, Pub. L. No. 111-148, § 1302(b)(1), 124 Stat. 119, 163 (2010), codified at 42 U.S.C.A § 18022 (West 2012).

31 Id. § 1302(b)(1)(E).

32 See infra notes 153, 228-32 and accompanying text.

33 WORKSHOP REPORT, supra note 10, at 71.

34 Part II of this Article is reprinted with updates and minor changes with permission from Tovino, supra note 2, at pt. 1.

35 An inpatient may be defined as a patient who: (1) receives room, board, and professional services in a medical institution for a twenty-four-hour period or longer; or (2) is expected by the institution to receive room, board, and professional services in the institution for a twenty-four-hour period or longer even though it later develops that the patient dies, is discharged, or is transferred to another facility and does not actually stay in the institution for twenty-four hours. See 42 C.F.R. § 440.2(a) (2010).

36 An outpatient may be defined as a patient of an organized medical facility, or distinct part of that facility, who is expected by the facility to receive and who does receive professional services for less than a twenty-four-hour period regardless of the hour of admission, whether a bed is used, and whether the patient remains in the facility past midnight. See id.

37 See, e.g., SUBSTANCE ABUSE & MENTAL HEALTH SERVS. ADMIN., DEP't HEALTH & HUMAN SERVS., MENTAL HEALTH: A REPORT OF THE SURGEON GENERAL 418 (1999) [hereinafter SURGEON GENERAL REPORT] (“Private health insurance is generally more restrictive in coverage of mental illness than in coverage for somatic illness.”). Id. (“Federal public financing mechanisms, such as Medicare and Medicaid, also imposed limitations on coverage … of ‘nervous and mental disease’ … .”); Barry, Colleen L., The Political Evolution of Mental Health Parity, 14 Harv. Rev. Psychiatry 185, 186 (2006)CrossRefGoogle ScholarPubMed [hereinafter Barry, Political Evolution] (“Ever since the inception of third-party payment for mental health services, coverage has been substantially more limited than insurance for general medical care.”).

38 See 42 U.S.C. § 1395c (2006). See generally CTRS. MEDICARE & MEDICAID SERVS., DEP't HEALTH & HUMAN SERVS., CMS PRODUCT NO. 11306, WHAT IS MEDICARE? (2011).

39 See 42 U.S.C. §§ 1395c–1395i-5 (2006 & Supp. IV 2010) (establishing “[Medicare] Part A— Hospital Insurance Benefits for Aged and Disabled”).

40 See id. §§ 1395j–1395w-4 (establishing “[Medicare] Part B—Supplementary Medical Insurance Benefits for Aged and Disabled”).

41 See 42 C.F.R. § 409.62 (2010); see also NAT’L POLICY FORUM, MEDICARE's MENTAL HEALTH BENEFITS 1 (2007); CONG. BUDGET OFFICE, CBO STAFF MEMORANDUM: THE INPATIENT PSYCHIATRIC HOSPITAL BENEFIT UNDER MEDICARE 4-5 (1993) [hereinafter CBO MEMORANDUM].

42 See Lave, Judith R. & Goldman, Howard H., Medicare Financing for Mental Health Care, 9 Health Aff. 19, 21 (1990)CrossRefGoogle ScholarPubMed (“This limit assures that Medicare will not pay for the long-term custodial support of the mentally ill.”); NAT’L POLICY FORUM, supra note 41, at 10 (explaining that Medicare Part A's 190-day lifetime maximum on mental healthcare provided in a free-standing psychiatric hospital was intended to limit the federal government's mental healthcare costs).

43 See, e.g., Letter from Michael J. Fitzpatrick, Exec. Dir., Nat’l Alliance on Mental Illness, to Rep. Paul Tonko (Sept. 20, 2010), available at http://www.nami.org/Template.cfm?Section=Issue_Spotlights&template=/ContentManagement/ContentDisplay.cfm&ContentID=107512 (explaining that many non-elderly Medicare beneficiaries with disabilities have already exceeded the 190-day limit or are at imminent risk of doing so).

44 CBO MEMORANDUM, supra note 41, at 13 (noting that once a Medicare beneficiary reaches the 190-day limitation, the beneficiary may turn for care to a general hospital (where the limit does not apply) or to outpatient care, or may forgo psychiatric care entirely); id. at 10 (“[T]he alternative provider might be less capable of providing the most appropriate care if psychiatric hospitals have specialized in treating certain kinds of patients—for example, those who need acute care for severe or complex conditions.”); CAL. HEALTH ADVOCATES, SUMMARY OF MEDICARE BENEFITS AND COST SHARING FOR 2011 (2010), available at http://www.cahealthadvocates.org/basics/benefitssummary. html (explaining that Medicare beneficiaries pay out of pocket for 100% of the costs of inpatient services provided in a psychiatric setting after 190 days).

45 CBO MEMORANDUM, supra note 41, at 13 (“[E]nrollees who consider alternative sources of covered care to be unsatisfactory substitutes may forgo care entirely, either because they are unable to pay for psychiatric hospital care themselves or because they choose not to do so.”).

46 See CTRS. FOR MEDICARE & MEDICAID SERVS., DEP't OF HEALTH & HUMAN SERVS., MEDIGAP COVERAGE OF OUTPATIENT MENTAL HEALTH SERVICES THAT ARE SUBJECT TO THE MENTAL HEALTH PAYMENT REDUCTION 3 (2002) [hereinafter MEDIGAP COVERAGE].

47 Although no health insurance-related federal statute or regulation defines “co-insurance,” it may be defined as the insured's liability after the insurer has paid its portion of the total healthcare costs. See id. at 2, 6 n.ix (defining co-insurance without reference to a statute or regulation and with respect to common parlance; that is, the beneficiary's liability after Medicare payment is made).

48 See 42 U.S.C. § 1395l(c) (2006 & Supp. IV 2010) (calculating as Medicare-incurred expenses only 62.5% of the outpatient expenses associated with the treatment of mental, psychoneurotic, and personality disorders). Until 2010, Medicare was thus responsible for only 50% (i.e., 62.5% x 80% (80% is the Medicare approved amount)) of the cost of most outpatient mental health services, and the Medicare beneficiary was responsible for the remaining 50%. In 2008, President George W. Bush signed into law the Medicare Improvements for Patients and Providers Act of 2008, section 102 of which increased Medicare's portion of incurred expenses for outpatient mental health services to 68.75% in 2010 and 2011 (resulting in a 45% beneficiary co-insurance in those years), 75% in 2012 (resulting in a 40% beneficiary co-insurance), 81.25% in 2013 (resulting in a 35% beneficiary coinsurance), and 100% in 2014 and thereafter (resulting in a 20% co-insurance). By 2014, Medicare thus will pay 80% of (and Medicare beneficiaries will pay a 20% co-insurance on) all outpatient mental health services. Medicare Improvements for Patients and Providers Act of 2008, Pub. L. No. 110-275, § 102, 122 Stat. 2494, 2498 (“Elimination of Discriminatory Copayment Rates for Medicare Outpatient Psychiatric Services.”).

49 See 42 U.S.C. § 1395l(c).

50 See, e.g., Schweiker v. Gray Panthers, 453 U.S. 34, 36-37 (1981) (“An individual is entitled to Medicaid if he fulfills the criteria established by the state in which he lives.”); Overview Medicaid Program—General Information, CTRS. MEDICARE & MEDICAID SERVS., DEP't OF HEALTH & HUMAN SERVS., http://www.cms.gov/medicaidgeninfo/01_overview.asp? (last updated Nov. 25, 2011) [hereinafter Medicaid Program].

51 See 42 C.F.R. § 435.1009(a)(2) (2006) (prohibiting Medicaid coverage of healthcare services provided to individuals under age sixty-five who are patients in an institution for mental disease).

52 See 42 U.S.C. § 1396d(i) (2006 & Supp. IV 2010) (defining institution for mental disease).

53 See, e.g., Taube, Carl A., Goldman, Howard H. & Salkever, David, Medicaid Coverage for Mental Illness: Balancing Access and Costs, 9 Health Aff. 5, 8 (1990)CrossRefGoogle ScholarPubMed.

54 See generally MEDIGAP COVERAGE, supra note 46 passim.

55 See, e.g., Medicaid Program, supra note 50.

56 Costs of inpatient care provided in a psychiatric setting can exceed $1000 per day in a public facility and $2000 per day in a private facility. See, e.g., Meg Kissinger, Mental Facility's Size Cost Taxpayers Million, MILWAUKEE WIS. J. SENTINEL (Nov. 13, 2010), http://www.jsonline.com/watchdog/watchdogreports/107835219.html (stating that the cost of inpatient care at Milwaukee County Mental Health Complex, a public psychiatric hospital located in Milwaukee, Wisconsin, is $1082 per day); $58,752 for 18 Days of Involuntary Commitment to Mental Hospital, BIPOLAR: CRAZY MERMAID's BLOG (Aug. 14, 2010), http://crazymer1.wordpress.com/2010/08/14/58752-for-18-days-of-involuntary-committment-to-mental-hospital/ (stating that the cost of inpatient care at Fairfax Hospital, a private psychiatric hospital located in Kirkland, Washington, is between $2468 and $3900 per day).

57 See, e.g., Barry, Colleen L. et al., Design of Mental Health Benefits: Still Unequal After All These Years, 22 Health Aff. 127, 127 (2003)CrossRefGoogle ScholarPubMed [hereinafter Barry et al., Still Unequal] (presenting health insurance data from a national employer survey; finding that, even after the implementation of the Mental Health Parity Act of 1996, private employer-sponsored mental health insurance coverage is less comprehensive than non-mental health insurance coverage).

58 SURGEON GENERAL REPORT, supra note 37, at 418 (“Some private insurers refused to cover mental illness treatment … .”).

59 Mental health parity advocates support the financing of mental healthcare on the same basis as the financing of physical healthcare. See, e.g., id. at 426 (describing the concept of mental health parity and explaining that “[t]he fundamental motivation behind parity legislation is the desire to cover mental illness on the same basis as somatic illness, that is, to cover mental illness fairly”). See generally Kaplan, Dana L., Can Legislation Alone Solve America's Mental Health Dilemma? Current State Legislative Schemes Cannot Achieve Mental Health Parity, 8 Quinnipiac Health L.J. 325, 328 (2005)Google Scholar (describing the mental health parity movement).

60 Mental Health Parity Act (MHPA), Pub. L. No. 104-204, 110 Stat. 2944 (1996) (codified as amended at 29 U.S.C. § 1185a (2006 & Supp. IV 2010) and 42 U.S.C. § 300gg-26 (2006 & Supp. IV 2010)).

61 Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), Pub. L. No. 110-343, 122 Stat. 3881 (codified as amended at 29 U.S.C. § 1185a and 42 U.S.C. § 300gg-26).

62 See 29 U.S.C. § 1185a(b)(1) (“Nothing in this section shall be construed as requiring a group health plan (or health insurance coverage offered in connection with such a plan) to provide any mental health benefits.”); 42 U.S.C. § 300gg-26(b)(1).

63 See 29 U.S.C. § 1185a(b)(1); 42 U.S.C. § 300gg-26(b)(1). Some states do require individual and group health plans to include mental health benefits in their health plans. See, e.g., ALA. CODE § 27-54-4(a)(1) to (8) (2010) (requiring all group health plans to include insurance benefits for a range of mental illnesses, including schizophrenia, bipolar disorder, panic disorder, obsessive-compulsive disorder, major depressive disorder, anxiety disorders, and mood disorders); HAW. REV. STAT. § 431M-2 (2010) (requiring all individual and group health plans to include insurance benefits for mental illness as well as alcohol and drug dependency).

64 A health insurance exchange is a competitive insurance marketplace where individuals and small businesses can purchase affordable and qualified health benefit plans beginning on or after January 1, 2014. See Provisions of the Affordable Care Act, by Year, HEALTHCARE.GOV, http://www.healthcare.gov/law/timeline/full.html (last visited Nov. 3, 2011). Exchange-offered health plans must include the EHB Package, defined to include mental health and substance use disorder benefits, by the same date. See ACA, Pub. L. No. 111-148, § 1302(b)(1)(E), 124 Stat. 119 (2010), codified at 42 U.S.C.A. § 18022 (West 2012); Essential Health Benefits, HEALTHCARE.GOV, http://www.healthcare.gov/glossary/e/essential.html (last visited Nov. 3, 2011).

65 See EHB BULLETIN, supra note 23, at 1 (listing the health plan settings that must comply with ACA's essential health benefits requirement); CONSENSUS REPORT, supra note 17, at 6 box S-1, 18.

66 See CONSENSUS REPORT, supra note 17, at 18-20.

67 See infra Part III.C.

68 See, e.g., SURGEON GENERAL REPORT, supra note 37, at 426-27 (summarizing typical mental health benefit disparities that existed in 1997: “the most common insurance restriction was an annual limit on inpatient days … “); Barry, Political Evolution, supra note 37, at 186 (“In 1982, 31% of full time employees with mental health benefits in medium and large private firms were subject to separate inpatient day limits, and 19% had separate outpatient visit limits. By 2002, 77% had separate inpatient day limits, and 75% had separate outpatient visit limits … .”); Kaplan, supra note 59, at 329 (summarizing mental health benefit disparities that existed in the context of employer-sponsored health plans in 1988); Nelson, Keith, Legislative and Judicial Solutions for Mental Health Parity: S. 543, Reasonable Accommodation, and an Individualized Remedy Under Title I of the ADA, 51 Am. U. L. Rev. 91, 93, 99 (2001)Google Scholar (discussing typical private plan limitations on mental health insurance benefits).

69 See infra Part III.B.

70 See infra Part III.B.

71 See infra Part III.B.

72 Some states do require small group health plans and individual health insurance policies to establish parity between physical and mental health benefits in terms of deductibles, co-payments, coinsurance, inpatient day limitations, and outpatient visit limitations. See, e.g., 24 ME. REV. STAT. tit. 24, § 2325-A(5-C)(B)(1) (2010) (requiring health insurance policies issued in Maine to provide insurance benefits for the diagnosis and treatment of mental illness under terms and conditions that are no less extensive than the benefits provided for treatment of physical illness); id. § 2325-A(5- C)(B)(4) (prohibiting health insurance policies issued in Maine from containing separate maximums for physical and mental illness, separate deductibles and co-insurance amounts for physical illness and mental illness, separate out-of-pocket limits for physical illness and mental illness, or separate office visit limits for physical illness and mental illness); MD. CODE ANN., INS. § 15-802(c) (West 2012) (requiring individual and group health insurance policies issued in Maryland to provide benefits for the diagnosis and treatment of mental illness under the same terms and conditions that apply under the policy or contract for the diagnosis and treatment of physical illness).

73 See infra Part III.C.

74 See infra Parts III.A-C.

75 See infra Parts III.A-C.

76 Parts III.A-C of this Article are reprinted with updates and minor changes with permission from Tovino, supra note 2, at pts. II.A-C. Parts III.D-E of this Article are new.

77 See MHPA, Pub. L. No. 104-204, 110 Stat. 2944 (1996).

78 See id. § 712(a)(1), (2) (applying in each case to “a group health plan (or health insurance coverage offered in connection with such a plan … )”).

79 See id. § 712(c)(1)(A)-(B) (exempting from MHPA application group health plans of small employers; defining small employers as those who employed an average of at least two but not more than fifty employees on business days during the preceding calendar year and who employs at least two employees on the first day of the plan year).

80 See, e.g., The Mental Health Parity and Addiction Equity Act, CTRS. FOR CONSUMER INFO. & INS. OVERSIGHT, U.S. DEP't OF HEALTH & HUMAN SERVS. (last visited April 3, 2010) [hereinafter The Mental Health Parity and Addiction Equity Act] (“MHPAEA does not apply to small group health plans.”); id. (“Medicare Medicaid are not issuers of health insurance. They are public health plans through which individuals obtain health coverage… . Medicaid Benchmark Benefit plans [however] … are subject to certain requirements of MHPAEA.”); id. (“Non-Federal governmental employers that provide self-funded group health plan coverage to their employees (coverage that is not provided through an insurer) may elect to exempt their plan (opt-out) from the requirements of MHPAEA … .”); Barry, Colleen L. et al., A Political History of Federal Mental Health and Addiction Insurance Parity, 88 Milbank Q. 404, 407 (2010)CrossRefGoogle ScholarPubMed [hereinafter Barry et al., Political History] (explaining that the MHPAEA applies to Medicare Advantage coverage offered through a group health plan, Medicaid managed care, the State Children's Health Insurance Program, and state and local government plans, but not Medicaid non-managed care plans); Letter from Cindy Mann, Dir. of the Ctr. for Medicaid and CHIP Servs. (CMCS), Ctrs. for Medicare & Medicaid Servs., Dep't of Health & Human Servs., to State Health Officials 2 (Nov. 4, 2009), available at https://www.cms.gov/SMDL/downloads/SHO110409.pdf (“The MHPAEA requirements apply to Medicaid only insofar as a State's Medicaid agency contracts with one or more managed care organizations (MCOs) or Prepaid Inpatient Health Plans (PIHPs), to provide medical/surgical benefits as well as mental health or substance use disorder benefits … . MHPAEA parity requirements do not apply to the Medicaid State plan if a State does not use MCOs or PIHPs to provide these benefits.”); 42 U.S.C. § 300gg-21(a)(2)(A) (2006 & Supp. IV 2010) (permitting sponsors of self-insured non-federal governmental health plans to opt out of particular federal requirements); 45 C.F.R. § 146.180(a)(1)(v) (2011) (permitting sponsors of self-insured non-federal governmental health plans to opt out of federal mental health parity requirements); Memorandum from Steve Larsen, Dir. of Oversight, Dep't of Health & Human Servs. 2 (Sept. 21, 2010) (discussing the ability of self-funded, non-federal governmental plans to opt out of federal mental health parity law and the survival of such ability post-ACA: “[p]rovisions subject to opt-out for plan years beginning on or after 9/23/10 [include] … [p]arity in the application of certain limits to mental health benefits (including requirements of the Mental Health Parity and Addiction Equity Act)”).

81 MHPA, Pub. L. No. 104-204, § 712(c)(2), 110 Stat. 2944 (1996).

82 Barry et al., Political Evolution, supra note 37, at 187.

83 See MHPA § 712(b)(1) (“Nothing in this section shall be construed as requiring a group health plan (or health insurance coverage offered in connection with such a plan) to provide any mental health benefits … . “).

84 See id. § 712(e)(4) (“The term ‘mental health benefits’ means benefits with respect to mental health services, as defined under the terms of the plan or coverage (as the case may be), but does not include benefits with respect to treatment of substance abuse or chemical dependency.”).

85 See id. § 712(b)(2) (“Nothing in this Section shall be construed … as affecting the terms and conditions (including cost sharing, limits on numbers of visits or days of coverage, and requirements relating to medical necessity) relating to the amount, duration, or scope of mental health benefits under the plan or coverage … .”).

86 See id. § 712(a)(1)-(2).

87 See id. § 712(a)(1)(A) (no aggregate lifetime limits); id. § 712(a)(2)(A) (no annual limits).

88 See id. § 712(a)(1)(B) (aggregate lifetime limits); id. § 712(a)(2)(B) (annual limits).

89 See MHPAEA, Pub. L. No. 110-343, 122 Stat. 3881 (2008) (codified as amended at 29 U.S.C. § 1185a (2006 & Supp. IV 2010) and 42 U.S.C. § 300gg-26 (2006 & Supp. IV 2010)).

90 Id. § 512(a)(1) (applying only to group health plans or health insurance coverage offered in connection with such plans).

91 See supra note 80.

92 See MHPAEA § 512(a)(1) (regulating only those group health plans that offer both physical health and mental health benefits); The Mental Health Parity and Addiction Equity Act, supra note 80 (stating, “MHPAEA does not require large group health plans and their health insurance issuers to cover MH/SUD [mental health and substance use disorder] benefits. The law's requirements apply only to large group health plans and their health insurance issuers that choose to include MH/SUD benefits in their benefit packages.”).

93 See MHPAEA § 512(a)(3) (establishing new cost exemption provisions).

94 Id.

95 Id.

96 See id. § 512(a)(4) (adding a new definition of “substance use disorder benefits”); id. § 512(a)(1) (regulating the financial requirements and treatment limitations that are applied to both mental health and substance use disorder benefits).

97 See id. § 512(a)(1) (including within the definition of “financial requirements” deductibles, copayments, co-insurance, and out-of-pocket expenses).

98 See id. (including within the definition of “treatment limitations” limits on the frequency of treatment, number of visits, days of coverage, and other similar limits on the scope or duration of treatment).

99 See id. (requiring both financial requirements and treatment limitations applicable to mental health and substance use disorder benefits to be no more restrictive than the predominant financial requirements and treatment limitations applied to substantially all physical health benefits covered by the plan).

100 Interim Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, 75 Fed. Reg. 5410, 5410-51 (Feb. 2, 2010).

101 See id. at 5449 (revising 45 C.F.R. § 46.136(c)(3)(v) to clarify that covered group health plans may not apply cumulative financial requirements or cumulative quantitative treatment limitations for mental health or substance use disorder benefits in a classification that accumulates separately from any established for medical or surgical benefits in the same classification).

102 See id. (revising 45 C.F.R. § 46.136(c)(4)(i) and (ii) to clarify that a covered group health plan may not impose a non-quantitative treatment limitation on mental health and substance use disorder benefits unless the processes used in applying the treatment limitation are comparable to, and are applied no more stringently than, the processes used in applying the same limitation on medical and surgical benefits).

103 See Tovino, supra note 4, at pts. I.A-I.D (describing the patchwork of state mental health parity law and providing examples of state laws that are more and less stringent than federal law).

104 ACA, Pub. L. No. 111-148, 124 Stat. 119 (2010), amended by Health Care and Education Reconciliation Act, Pub. L. No. 111-152, 124 Stat. 1029 (2010).

105 Id. § 1501(a) (adding to the Internal Revenue Code: “[a]n applicable individual shall for each month beginning after 2013 ensure that the individual, and any dependent of the individual who is an applicable individual, is covered under minimum essential coverage for such month”).

106 See, e.g., Florida v. U.S. Dep't of Health and Human Servs., 648 F.3d 1235 (11th Cir. 2011), cert. granted sub nom. Nat’l Fed’n of Indep. Bus. v. Sebelius, 132 S. Ct. 603 (2011) (mem.), and cert. granted, 132 S. Ct. 604 (2011) (No. 11-398) (mem.) (argued Mar. 26-27, 2012), and cert. granted in part, 132 S. Ct. 604 (2011) (No. 11-400) (mem.) (argued Mar. 28, 2012).

107 ACA § 1311(j) (entitled “Applicability of Mental Health Parity”).

108 42 U.S.C.A. § 300gg-26 (West 2012) (entitled “Parity in Mental Health and Substance Use Disorder Benefits”).

109 ACA § 1311(j) (“[MHPAEA] shall apply to qualified health plans in the same manner and to the same extent as such section applies to health insurance issuers and group health plans.”). Compare the former MHPAEA, Pub. L. No. 110-343, 122 Stat. 3881 (2008) (codified as amended at 29 U.S.C. § 1185a (2006 & Supp. IV 2010) and 42 U.S.C. § 300gg-26 (2006 & Supp. IV 2010)) (making its provisions applicable to “group health plans or health insurance coverage offered in connection with such a plan”), with the newly amended 42 U.S.C. § 300gg-26 (2010) (making its provisions applicable to a “group health plan or a health insurance issuer offering group or individual health insurance”).

110 ACA § 1563(c)(4) (identifying the conforming and technical changes that will be made to former 42 U.S.C. § 300gg-5 (current 42 U.S.C. § 300gg-26)); Historical and Statutory Notes for former 42 U.S.C. § 300gg-5 (noting that former 42 U.S.C. § 300gg-5 was transferred to 42 U.S.C. § 300gg-26); see also EHB BULLETIN, supra note 23, at 12 (“The Affordable Care Act also specifically extends MHPAEA to the individual market.”).

111 ACA § 10101 (adding new PHSA § 2711(a)). ACA prohibits lifetime dollar limits on essential benefits in any grandfathered or non-grandfathered health plan or insurance policy issued or renewed on or after September 23, 2010. Id. ACA restricts and phases out annual dollar limits that all grandfathered and non-grandfathered group health plans, as well as non-grandfathered individual health insurance plans issued after March 23, 2010, can place on essential benefits; that is, none of these plans can impose an annual dollar limit lower than: (i) $750,000 for a plan year or policy year starting on or after September 23, 2010, but before September 23, 2011; (ii) $1.25 million for a plan year or policy year starting on or after September 23, 2011, but before September 23, 2012; or (iii) $2 million for a plan year or policy year starting on or after September 23, 2012, but before January 1, 2014. 26 C.F.R. § 54.9815–2711T. ACA prohibits annual limits on essential benefits beginning January 1, 2014. See ACA § 10101 (adding new PHSA § 2711(a)(2)) (“With respect to plan years beginning prior to January 1, 2014, a group health plan and a health insurance issuer offering group or individual health insurance coverage may only establish a restricted annual limit on the dollar value of benefits for any participant or beneficiary with respect to the scope of benefits that are essential health benefits under section 1302(b) of the Patient Protection and Affordable Care Act, as determined by the Secretary.”); 26 C.F.R. § 54.9815–2711T (2010). See generally Lifetime & Annual Limits, HEALTHCARE.GOV, http://www.healthcare.gov/law/features/costs/limits/index.html (last visited Mar. 3, 2012) (explaining the new lifetime and annual limit prohibitions and restrictions).

112 ACA § 10101 (adding new PHSA § 2711(b)).

113 ACA § 1302(b)(1)(E) (including mental health and substance use disorder services, including behavioral health treatment, within the definition of essential health benefits).

114 See supra Part III.A.

115 HEALTHCARE.GOV, supra note 111 (“The ban on lifetime dollar limits for most covered benefits applies to every health plan—whether you buy coverage for yourself or your family, or you receive coverage through your employer.”).

116 ACA § 1201 (adding new PHSA § 2707(a), to be codified at 42 U.S.C. § 300gg-6(a)).

117 Id. § 1301(a)(1)(B) (adding new 42 U.S.C. § 18021(a)(1)(B)).

118 Individuals eligible for state basic health plan coverage include individuals who are not eligible for Medicaid and whose household income falls between 133 and 200 percent of the federal poverty level for the family involved as well as low-income legal resident immigrants. Id. § 1331(e).

119 Id. § 1331(a)(1) (requiring state basic health plans to provide “at least the essential health benefits described in section 1302(b) to eligible individuals in lieu of offering such individuals coverage through an Exchange”).

120 Id. § 2001(c)(3) (adding new 42 U.S.C. § 1396u-7(b)(5)).

121 Id. § 1302(b)(1)(E) (“[E]ssential health benefits … shall include … [m]ental health and substance use disorder services, including behavioral health treatment.”); Pamela S. Hyde, The Affordable Care Act and Mental Health: An Update, HEALTHCARE.GOV (Aug. 19, 2010), http://www.healthcare.gov/blog/2010/08/mentalhealthupdate.html (“[I]n 2014, mental health and substance use disorder services will be part of the essential benefits package, a set of health care service categories that must be covered by certain plans, including all insurance policies that will be offered through the Exchanges, and Medicaid.”).

122 See id.; see also EHB BULLETIN, supra note 24, at 1 (listing the health plan settings regulated by ACA's EHB requirement); CONSENSUS REPORT, supra note 17, at 7 box S-1, 18-23 (listing the health plan settings regulated by ACA's EHB requirement); Essential Health Benefits, HEALTHCARE.GOV, http://www.healthcare.gov/glossary/e/essential.html (last visited Mar. 1, 2012) (“Insurance policies must cover these [essential health] benefits in order to be certified and offered in Exchanges, and all Medicaid state plans must cover these services by 2014.”).

123 Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan Under the Patient Protection and Affordable Care Act, 75 Fed. Reg. 34538, 34562 (June 17, 2010) (adding new 29 C.F.R. § 2590.715–1251(a), which defines “grandfathered health plan coverage” as “coverage provided by a group health plan, or a health insurance issuer, in which an individual was enrolled on March 23, 2010”); id. at 34559 (explaining that section 2707 of the Public Health Service Act does not apply to grandfathered health plans); id. at 34563 (adding new 29 C.F.R. § 2590.715-1251(c)(1)) (“[T]he provisions of PHS Act sections … 2707 … do not apply to grandfathered health plans.”); EMP. BENEFITS SEC. ADMIN., U.S. DEP't OF LABOR, APPLICATION OF THE NEW HEALTH REFORM PROVISIONS OF PART A OF TITLE XXVII OF THE PHS ACT TO GRANDFATHERED PLANS 1 (2010) (explaining that ACA's essential benefit package requirement is not applicable to grandfathered plans).

124 Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan Under the Patient Protection and Affordable Care Act, 75 Fed. Reg. at 34562 (adding new 29 C.F.R. § 2590.715-1251(a), which defines “grandfathered health plan coverage” as “coverage provided by a group health plan, or a health insurance issuer, in which an individual was enrolled on March 23, 2010”).

125 Id. at 34541 (defining grandfathered plans and identifying the ways in which grandfathered plans can lose grandfathered status, turning them into non-grandfathered plans).

126 Id. at 34562-63 (adding new 29 C.F.R. § 2590.715-1251(a)(1)(i) (cessation of coverage by one or more or all insureds), 29 C.F.R. § 2590.715-1251(a)(4) (addition of new family members), and 29 C.F.R. § 2590.715-1251(b)(1) (addition of newly hired or newly enrolled employees)). See generally BERNADETTE FERNANDEZ, CONG. RESEARCH SERV., GRANDFATHERED HEALTH PLANS UNDER THE PATIENT PROTECTION AND AFFORDABLE CARE ACT (PPACA) 1 (2011), available at http://assets.opencrs.com/rpts/R41166_20110103.pdf (summarizing who is allowed coverage under a grandfathered health plan; explaining, “[c]urrent enrollees in grandfathered health plans are allowed to re-enroll in that plan, even if renewal occurs after date of enactment. Family members are allowed to enroll in the grandfathered plan, if such enrollment is permitted under the terms of the plan in effect on the date of enactment. For grandfathered group plans, new employees (and their families) may enroll in such plans”).

127 Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan Under the Patient Protection and Affordable Care Act, 75 Fed. Reg. at 34562 (adding new 29 C.F.R. § 2950.715-1251(a)(1)(ii) (“[I]f an employer or employee organization enters into a new policy, certificate, or contract of insurance after March 23, 2010 … then that policy, certificate, or contract of insurance is not a grandfathered health plan with respect to the individuals in the group health plan.”)); 29 C.F.R. § 2950.715-1251(a)(1)(ii) (stating “if an employer or employee organization enters into a new policy, certificate, or contract of insurance after March 23, 2010 … then that policy, certificate, or contract of insurance is not a grandfathered health plan with respect to the individuals in the group health plan”); 29 C.F.R. § 2950.715-1251(a)(1)(i) (stating “Subject to the limitation set forth in paragraph (a)(1)(ii) of this section, a group health plan (and any health insurance coverage offered in connection with the group health plan) does not cease to be a grandfathered health plan merely because the plan (or its sponsor) enters into a new policy, certificate, or contract of insurance after March 23, 2010 (for example, a plan enters into a new contract with a new issuer or a new policy is issued with an existing insurer)”).

128 Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan Under the Patient Protection and Affordable Care Act, 75 Fed. Reg. at 34564-65 (adding new 29 C.F.R. § 2590.715–1251(g)(1) (listing the changes that will cause cessation of grandfathered status)).

129 Id. at 34552.

130 See, e.g., id. at 34540 (“[C]ertain group health plans and health insurance coverage existing as of March 23, 2010 … , are subject only to certain provisions of the Affordable Care Act.”); FERNANDEZ, supra note 126, at 1 (“Grandfathered health plans are exempt from the vast majority of new insurance reforms under PPACA.”).

131 ACA, Pub. L. No. 111-148, § 1201, 124 Stat. 119, 154 (2010), amended by Health Care and Education Reconciliation Act, Pub. L. No. 111-152, 124 Stat. 1029 (2010) (amending section 2707(a) of the PHS Act and stating that “[a] health insurance issuer that offers health insurance coverage in the individual or small group market shall ensure that such coverage includes the essential health benefits package required under section 1302(a) of the Patient Protection and Affordable Care Act”); Interim Final Rules for Group Health Plans and Health Insurance Coverage Relating to Status as a Grandfathered Health Plan Under the Patient Protection and Affordable Care Act, 75 Fed. Reg. at 34559 (explaining that section 2707 of the PHS Act does not apply to grandfathered health plans); 29 C.F.R. § 2590.715-1251(c)(1) (“[T]he provisions of PHS Act section[] … 2707 … do[es] not apply to grandfathered health plans.”)); EMP. BENEFITS SEC. ADMIN., supra note 123 (explaining that ACA's essential benefit package requirement does not apply to grandfathered plans); CONSENSUS REPORT, supra note 17, at 18 (explaining that ACA's EHB requirement does not apply to grandfathered health plans).

132 See, e.g., 29 U.S.C.A. § 1185a(b)(1) (West 2012) (“Nothing in this section shall be construed … as requiring a group health plan (or health insurance coverage offered in connection with such a plan) to provide any mental health or substance use disorder benefits … .”); 42 U.S.C.A. § 300gg-26(b)(1) (West 2012) (“Nothing in this section shall be construed … as requiring a group health plan or a health insurance issuer offering group or individual health insurance coverage to provide any mental health or substance use disorder benefits … .”).

133 See, e.g., Tovino, supra note 4, at pts. I.A-I.D (discussing different state approaches to mandatory mental health and substance use disorder benefits).

134 CONSENSUS REPORT, supra note 17, at 18.

135 See id. at 18-20 (listing the health plan settings to which ACA's EHB requirement does not apply); Rosenbaum, Sara, Teitelbaum, Joel & Hayes, Katherine, The Essential Health Benefits Provisions of the Affordable Care Act: Implications for People with Disabilities, 3 Commonwealth Fund 1, 3 (2011)Google ScholarPubMed (“The act exempts large-group health plans, as well as self-insured ERISA plans and ERISA-governed multiemployer welfare arrangements not subject to state insurance law, from the essential benefit requirements.”).

136 According to data on currently marketed health plans, thirty-four percent of individual or family health plan enrollees do not have coverage for substance abuse services and eighteen percent of enrollees do not have coverage for other mental health services. See OFFICE OF THE ASSISTANT SEC’Y FOR PLANNING AND EVALUATION, DEP't HEALTH & HUMAN SERVS., Essential Health Benefits: Individual Market Coverage, ASPE ISSUE BRIEF (Dec. 16, 2011) [hereinafter ASPE ISSUE BRIEF], available at http://aspe.hhs.gov/health/reports/2011/IndividualMarket/ib.shtml.

137 ACA § 1302(a)(1) (“In this title, the term ‘essential health benefits package’ means, with respect to any health plan, coverage that … provides for the essential health benefits defined by the Secretary … .”); id. § 1302(b)(1) (“[T]he Secretary shall define the essential health benefits … .”).

138 Id. § 1302(b)(2)(A). The Secretary also is responsible for determining the scope of benefits provided by a typical employer plan. To inform her determination, the Secretary was required to take into account a report by the Department of Labor on the scope of benefits offered under employersponsored insurance. See U.S. DEP't OF LABOR, SELECTED MEDICAL BENEFITS: A REPORT FROM THE DEPARTMENT OF LABOR TO THE DEPARTMENT OF HEALTH AND HUMAN SERVICES (2011).

139 ACA § 1302(b)(4)(A).

140 Id. § 1302(b)(4)(B).

141 Id. § 1302(b)(4)(C).

142 Id. § 1302(b)(4)(G).

143 WORKSHOP REPORT, supra note 10.

144 Id. at 2.

145 Id. at 17.

146 Id. at 1-2.

147 Id. For the list of questions, see id. at 161-62.

148 Id. at 1-2.

149 Id.

150 Id. at 3.

151 Id. at 2.

152 CONSENSUS REPORT, supra note 17.

153 Id. at 1.

154 Id.

155 Id.

156 See id. at xi (“If the package of benefits … is too broad, insurance might become too expensive.”); id. at 1 (“[T]he more expansive the benefit package is, the more it will likely cost and the less affordable it will be.”); id. (“The basic tension [i]s how comprehensive the EHB could be and still be affordable for consumers and payers and sustainable as a program over time.”); id. at 87 (“The central debate in constructing the EHB package has been balancing the comprehensiveness of benefits with their costs so as to promote value.”).

157 For a discussion of the five recommendations, see id. at 90-149.

158 Id. at 90.

159 Id.

160 Id.

161 Id. For a list of the additional criteria relating to the content of the aggregate EHB package and specific components of the EHB package, see CONSENSUS REPORT, supra note 17, at 5 fig.S-2. The Committee recommended that, in the aggregate, the EHB Package be affordable, maximize the number of people with insurance coverage, protect the most vulnerable by addressing the particular needs of those patients and populations, encourage better care practices by promoting the right care to the right patient in the right setting at the right time, advance stewardship of resources by focusing on high value services and reducing use of low value services (with value being defined as outcomes relative to costs), address the medical concerns of greatest importance to enrollees in EHB-related plans, as identified through a public deliberative process, and protect against the greatest financial risks due to catastrophic events or illnesses. See id. at 5. The Committee recommended that individual services, devices, and drugs that are part of the EHB Package be safe (i.e., expected benefits should be greater than expected harms), be medically effective and supported by a sufficient evidence base (or, in the absence of evidence on effectiveness, a credible standard of care), demonstrate meaningful improvement in outcomes over current effective services and treatments, be a medical service (and not primarily a social or educational service), and be cost effective (such that the health gain for individual and population health is sufficient to justify the additional cost to taxpayers and consumers). Id.

162 Id. at 63.

163 Id. at 90.

164 Id.

165 Id. at 117.

166 Id.

167 Id.

168 Id.

169 Id.

170 Id.

171 Id. at 131-32.

172 Id. at 9-10.

173 Id. at 10.

174 Id.

175 Id.

176 Id. at 10-11.

177 Id. at 11-12.

178 Id.

179 EHB BULLETIN, supra note 23, at 3.

180 See id. at 3.

181 See id.

182 Id.

183 Id. at 1.

184 Id. at 8.

185 See Farley, supra note 26.

186 EHB BULLETIN, supra note 23, at 8.

187 Id.

188 N.C. Aizenman, States Will Have Flexibility in Defining Required Health Coverage, WASH. POST, Dec. 17, 2011, at A5, available at http://www.washingtonpost.com/national/health-science/minimum-essential-health-benefits-will-be-largely-set-by-states/2011/12/16/gIQAx5FHzO_story.html.

189 EHB BULLETIN, supra note 23, at 8-9.

190 Id. at 9.

191 Id.

192 Id.

193 Id.

194 ACA, Pub. L. No. 111-148, § 1311(d)(3)(B)(ii), 124 Stat. 119, 173 (2010), amended by Health Care and Education Reconciliation Act, Pub. L. No. 111-152, 124 Stat. 1029 (2010).

195 EHB BULLETIN, supra note 23, at 9.

196 Id. at 9-10.

197 Id. at 10.

198 Id.

199 Id.

200 Id.

201 Id.

202 Id.

203 Id.

204 Id. For example, in a state where the default benchmark is in place but that default plan does not offer mental health and substance abuse disorder benefits, the benchmark would be supplemented using the mental health and substance use disorder benefits offered in the largest small group benchmark plan option with coverage for mental health and substance use disorder benefits. Id. If none of the three small group market benchmark options offer mental health and substance use disorder benefits, that category would be based on the largest plan offering mental health and substance use disorder benefits in FEHBP. Id.

205 Id. at 12.

206 Id.

207 Id.

208 Id.

209 Id.

210 See id. at 1.

211 Id.

212 ASPE ISSUE BRIEF, supra note 136, at 1. These numbers do not include estimates of the nonindividual (or small group) market enrollees whose coverage does not currently include mental health and substance use disorder benefits. Id. at 2 n.4.

213 See, e.g., CONSENSUS REPORT, supra note 17, at 62 (discussing variation among insurers with respect to certain categories of benefits, including mental health and substance use disorder benefits; noting that some services such as inpatient and outpatient substance abuse detoxification are less frequently covered); Kavita Patel, Essential Health Benefits: Policy Considerations, HEALTH AFF. BLOG (Dec. 28, 2011, 2:51 PM), http://healthaffairs.org/blog/2011/12/28/essential-health-benefitspolicy-considerations/ (“[B]oth ASPE researchers as well [as] private sector surveys have found a great deal of variation around benefits in behavioral health … .”).

214 See EHB BULLETIN, supra note 23, at 12 (discussing HHS's intent to allow health plans to offer benefits that are “substantially equal” to the benchmark benefits and the fact that HHS is considering permitting substitutions within and across the ten ACA-required benefit categories).

215 See, e.g., Farley, supra note 26.

216 See ACA, Pub. L. No. 111-148, § 1302(b)(1), 124 Stat. 119, 163 (2010), amended by Health Care and Education Reconciliation Act, Pub. L. No. 111-152, 124 Stat. 1029 (2010).

217 EHB BULLETIN, supra note 23, at 5-6.

218 Id. at 12.

219 WORKSHOP REPORT, supra note 10, at 71.

220 Id. at 71-82.

221 Id. at 71-77.

222 Id. at 72-73.

223 Id. at 74 (citing Chung, Bowen et al., Using a Community Partnered Participatory Research Approach to Implement a Randomized Controlled Trial: Planning Community Partners in Care, 21 J. Health Care For Poor & Underserved 780, 780-95 (2010)CrossRefGoogle ScholarPubMed).

224 Id. (citing Wennerstrom, Ashley et al., Community-Based Participatory Development of a Community Health Worker Mental Health Outreach Role to Extend Collaborative Care in Post- Katrina New Orleans, 21 Ethnicity & Disease S1-45, S1-45 – S1–51 (2011)Google ScholarPubMed; Springgate, Benjamin F. et al., Mental Health Infrastructure and Training Project, 21 Ethnicity & Disease S1–20 (2011)Google Scholar).

225 Id. at 76.

226 Id.

227 Id.

228 CONSENSUS REPORT, supra note 17, at 62.

229 Id. at 72.

230 Id. at 81.

231 Id. at 125.

232 See infra text accompanying notes 239-42.

233 WORKSHOP REPORT, supra note 10, at 3.

234 Id.

235 CONSENSUS REPORT, supra note 17, at xi.

236 EHB BULLETIN, supra note 23, at 8.

237 See infra Part IV.B.

238 Parts IV.A-B of this Article are reprinted with updates and minor changes with permission from Tovino, supra note 2, at pt. III.B. Part IV.C of this Article is new.

239 See, e.g., Parity of Medicare Benefits for Persons with Mental and Substance Use Conditions: Before the H. Subcomm. on Health of the H. Comm. on Ways and Means, 110th Cong. 2 (2007) (statement of Eric Goplerud, Ph.D., Research Professor, Dep't of Health Policy, George Washington Univ. Med. Ctr.) [hereinafter Goplerud Statement] (“There was a concern (perhaps justifiable) that equitable coverage would lead to overuse and uncontrolled costs.”); SURGEON GENERAL REPORT, supra note 37, at 418 (“[Private i]nsurers feared that coverage of mental health services would result in high costs associated with long-term and intensive psychotherapy and extended hospital stays … . These factors encouraged private insurers to limit coverage for mental health services.”); Barry, Political Evolution, supra note 37, at 186–87 (identifying a general perception among policymakers in the late 1970s and the early 1980s that “broad coverage for mental health was expensive and unpredictable”); id. at 189 (“Cost has always been a salient feature of the political debate over benefit regulation.”); Beigel, Allan & Sharfstein, Steven S., Mental Health Care Providers: Not the Only Cause or Only Cure for Rising Costs, 141 Am. J. Psychiatry 668, 668 (1984)Google ScholarPubMed (“During the past 25 years … [c]osts have risen, resulting in resistance to financing treatment of mental illness on both the public and private sectors.”); Frank, Richard G. et al., Will Parity in Coverage Result in Better Mental Health Care?, 345 New Eng. J. Med. 1701, 1701 (2001)CrossRefGoogle ScholarPubMed (“Potential costs are one reason insurers treat mental health services differently.”); Kaplan, supra note 59, at 337 (“Opponents of mental health parity … cite studies and reports that demonstrate that mental health parity will result in a significant increase in the cost of employee insurance coverage.”); Nelson, supra note 68, at 106.

240 See, e.g., Interim Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, 75 Fed. Reg. 5410, 5424 (Feb. 2, 2010) (“A frequent justification for higher cost-sharing of mental health and substance use disorder benefits is the greater extent of moral hazard for these benefits; individuals will utilize more mental health and substance use disorder benefits at a higher rate when they are not personally required to pay the cost.”); SURGEON GENERAL REPORT, supra note 37, at 420 (discussing the concepts of moral hazard and adverse selection in the context of mental health insurance); Frank et al., supra note 239, at 1701-02.

241 See, e.g., SURGEON GENERAL REPORT, supra note 37, at 420 (discussing the concept of moral hazard in the context of mental healthcare); see also Frank, Richard G. & McGuire, Thomas G., Parity for Mental Health and Substance Abuse Care under Managed Care, 1 J. Mental Health Pol’Y & Econ. 153, 155 (1998)Google ScholarPubMed [hereinafter Frank & McGuire, Parity].

242 See SURGEON GENERAL REPORT, supra note 37, at 420; see also Barry et al., Still Unequal, supra note 57, at 130 (“Health plans have historically attempted to control costs by requiring that enrollees pay more at the point of service for mental health care compared with other medical services.”).

243 In 1971, the former Federal Department of Health, Education, and Welfare began funding the RAND Health Insurance Experiment (HIE), a multi-year, multi-million dollar experimental study of healthcare costs, utilization, and outcomes. The HIE, frequently referred to as the largest health policy study in U.S. history, reported that patient cost-sharing reduces “inappropriate” or “unnecessary” medical care as well as “appropriate or needed” medical care. See DEP't HEALTH, EDUC. & WELFARE, RAND HEALTH INSURANCE EXPERIMENT (1982); RAND CORP., THE HEALTH INSURANCE EXPERIMENT: A CLASSIC RAND STUDY SPEAKS TO THE CURRENT HEALTH CARE REFORM DEBATE (2006) (summarizing the HIE's principal questions and findings). The study's applicability to today's managed care-dominated healthcare delivery market has recently been challenged: “[M]any have cited the RAND Health Insurance Experiment … which demonstrated that individuals are more likely to increase their mental health care usage when their personal cost-sharing for mental health care services fall than they are to increase their physical health care usage when their personal cost-sharing for physical health care services decreases. Because this experiment was conducted nearly thirty years ago, researchers recently tested to determine whether this result held true. Their results indicate that individuals’ sensitivity to changes in cost-sharing may have changed significantly over time.” Interim Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, 75 Fed. Reg. at 5424.

244 See, e.g., Meyerhoefer, Chad D. & Zuvekas, Samuel H., New Estimates of the Demand for Physical and Mental Health Treatment, 19 J. Health Econ. 297, 297 (2010)CrossRefGoogle ScholarPubMed (“Results from our correlated random effects specification indicate that the price responsiveness of ambulatory mental health treatment has decreased substantially and is now slightly lower than physical health treatment … . This suggests that concerns over moral hazard alone do not warrant less generous coverage for mental health.”).

245 In a traditional indemnity health plan, patients are free to select their primary care providers, specialty care providers, and hospital and other institutional care providers. However, indemnity plan patients usually are subject to relatively high deductibles and co-insurance amounts. See How do Deductibles and Copays Work?, STAY SMART STAY HEALTHY, http://www.staysmartstayhealthy.com/deductibles_and_copays (last visited Mar. 3, 2012).

246 In a managed care plan, enrollees usually are assigned to a primary care provider who must pre-authorize access to a specialty healthcare provider. Managed care plan enrollees typically pay a small co-payment (e.g., ten, fifteen, or twenty-five dollars) for each visit to a primary care or specialty care provider instead of a high deductible combined with co-insurance. Coverage is usually limited to a small class of providers in a particular service area, unless the enrollee has an emergency medical condition. In the typical managed care plan, healthcare is rationed and healthcare costs are controlled by managers, not by high cost-sharing amounts imposed on enrollees. See, e.g., Goldstein, Leonard S., Genuine Managed Care in Psychiatry: A Proposed Practice Model, 11 Gen. Hosp. Psychiatry 271, 271 (1989)CrossRefGoogle ScholarPubMed (referencing several definitions of managed care; offering one definition of “genuine managed care[;]” that is, the attempt to improve, where possible, the system of care; and characterizing other definitions of managed care by their attempts to lower the cost of medical care through benefit barriers, access barriers, treatment restrictions, case management, and other interventions).

247 See, e.g., Lu, Chunling et al., Demand Response of Mental Health Services to Cost Sharing Under Managed Care, 11 J. Mental Health Pol’Y & Econ. 113 (2008)Google ScholarPubMed [hereinafter Lu et al., Demand Response].

248 See infra notes 334-36 and accompanying text for a discussion of behavioral health carve-out plans.

249 See, e.g., Frank & McGuire, Parity, supra note 241, at 153 (“Because costs are controlled by management under managed care and not primarily by out of pocket prices paid by consumers, demand response recedes as an efficiency argument against parity.”); Albert Ma, Ching-to & McGuire, Thomas C., Costs and Incentives in a Behavioral Health Carve-Out, 17 Health Aff. 53, 56–64 (1998)Google Scholar (reporting studies in Massachusetts Medicaid and other contexts showing an association between behavioral health carve-outs and significant savings (e.g., twenty-five to sixty percent) per enrollee due to the virtual elimination of inpatient treatment).

250 See Meyerhoefer & Zuvekas, supra note 244, at 312.

251 See, e.g., SURGEON GENERAL REPORT, supra note 37, at 420 (discussing adverse selection in the context of mental healthcare); Frank & McGuire, Parity, supra note 241, at 156.

252 SURGEON GENERAL REPORT, supra note 37, at 420; see also Barry et al., Still Unequal, supra note 57, at 134 (discussing adverse selection in the context of mental healthcare; explaining that “adverse-selection incentives could play a role in explaining the endurance of benefit limits. While the advent of managed care has attenuated fears that coverage expansions would exacerbate cost control problems, benefit restrictions could be motivated by a health plan's desire to avoid enrollees with a propensity to avail themselves of mental health care.”).

253 See, e.g., Brooks, David & Collins, Gail, What's Wrong with a Single-Payer System?, N.Y. TIMES OPINIONATOR (July 29, 2009Google Scholar, 4:29 PM), http://opinionator.blogs.nytimes.com/2009/07/29/whats-wrong-with-a-single-payer-system; Davenport, Karen et al., Should Health Insurance Be Mandatory?, N.Y. TIMES ROOM FOR DEBATE (June 4, 2009Google Scholar, 7:43 PM), http://roomfordebate.blogs.nytimes.com/2009/06/04/should-health-insurance-be-mandatory/ (fiveauthor debate examining the merits of mandatory health insurance).

254 See ACA, Pub. L. No. 111-148, § 1501(a), 124 Stat. 119, 242-44 (2010), amended by Health Care and Education Reconciliation Act, Pub. L. No. 111-152, 124 Stat. 1029 (2010) (“An applicable individual shall for each month beginning after 2013 ensure that the individual, and any dependent of the individual who is an applicable individual, is covered under minimum essential coverage for such month.”).

255 See supra Part III.C.

256 See supra note 106.

257 See, e.g., Frank et al., supra note 239, at 1702 (“Parity can improve the efficiency of insurance markets by eliminating wasteful forms of competition that are the result of adverse selection. Mandating a particular level of mental health care establishes a floor for coverage.”).

258 See supra Part III.C; see also BERNADETTE FERNANDEZ, CONG. RESEARCH SERV., R41069, SELF-INSURED HEALTH INSURANCE COVERAGE 5 (2010) (“[G]roup health plan or health insurance coverage … in which a person was enrolled on the date of enactment [of PPACA] is grandfathered and exempt from most insurance reforms.”).

259 See, e.g., Goplerud Statement, supra note 239, at 9 (discussing several economic, social, and other implications of untreated mental illness); Interim Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, 75 Fed. Reg. 5410, 5423-24 (Feb. 2, 2010) (discussing several economic implications of mental health benefit restrictions and recognizing that the moral hazard problem can be controlled through managed behavioral healthcare); SURGEON GENERAL REPORT, supra note 37, at 420 (discussing the clinical implications of mental health benefit restrictions).

260 See, e.g., McKusick, David R. et al., Trends in Mental Health Insurance Benefits and Out-of- Pocket Spending, 5 J. Mental Health Pol’Y Econ. 71, 71 (2002)Google ScholarPubMed (“Insurance benefits can have a large effect on whether one is able to access health care services … . When insurance covers more limited expenditures, more must be paid out-of-pocket by the insured and there is less incentive to use services and more financial risk.”).

261 See, e.g., Interim Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, 75 Fed. Reg. at 5423-24 (“Mental health and physical health are interrelated, and individuals with poor mental health are more likely to have physical health problems as well.”).

262 See, e.g., id. at 5424 (“[T]here is evidence that comorbid depression worsens the prognosis, prolongs recovery and may increase the risk of mortality associated with physical illness.”); RACHEL SETHI ET AL., SUBSTANCE ABUSE & MENTAL HEALTH SERVS. ADMIN., DEP't HEALTH & HUMAN SERVS., Pub. No. SMA-06-4177, DESIGNING EMPLOYER-SPONSORED MENTAL HEALTH BENEFITS 14 (2006) (reporting that depression following surgery for myocardial infarction is common but if left untreated can nearly double the risk of death eighteen months after heart surgery).

263 See Interim Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, 75 Fed. Reg. at 5424 (“Increased access and utilization of mental health and substance use disorder benefits could result in a reduction of medical/surgical costs for individuals afflicted with mental health conditions and substance use disorders.”).

264 See Simon, Gregory E. et al., Health Care Costs of Primary Care Patients with Recognized Depression, 52 Archives Gen. Psychiatry 850, 850 (1995)CrossRefGoogle ScholarPubMed.

265 See id.

266 Id. at 851.

267 Id. at 852.

268 Id. at 850-52.

269 Id. at 854 (“These data demonstrate markedly higher health care costs among HMO patients with recognized depression …. A twofold difference in total cost between those diagnosed as having depression and the comparison group was maintained over 12 months of observation, suggesting a chronic component to utilization differences.”).

270 Id. at 855 (“In this 9-month sample of HMO primary patients with recognized depression, depression-related specialty mental health care and antidepressant drugs accounted for approximately $3.8 million, while greater use of general medical services accounted for $8.9 million over 1 year.”). See generally Interim Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, 75 Fed. Reg. 5410, 5424 (Feb. 2, 2010) (explaining, for example, that “comorbid depression has been shown to increase the costs of medical care, over and above the costs of treating the depression itself.”).

271 Simon et al., supra note 264, at 855.

272 Unützer, Jürgen et al., Depressive Symptoms and the Cost of Health Services in HMO Patients Aged 65 Years and Older, 277 JAMA 1618, 1618 (1997)Google Scholar.

273 Id. at 1618-19.

274 Id. at 1619.

275 Id.

276 Id. at 1618.

277 Id. at 1620.

278 Id.

279 Id. at 1618, 1621.

280 Id. at 1620.

281 Id. at 1618, 1621.

282 Id. at 1618, 1620-21.

283 Id. at 1618, 1621.

284 Id. at 1622 (“Our findings on the costs of health services are important because by the year 2040, persons older than 65 years are projected to make up 21% of the population and consume almost half of the nation's health care resources. Medicare currently spends only about 3% of its resources on mental health care and continues to have a 50% [now 45%] copayment for most outpatient mental health services. These policies may shift the costs of mental health treatment to primary care, where the lack of recognition and adequate treatment of depression are well documented and where depression may manifest itself in higher general medical costs. If depression is indeed a significant contributor to total health care costs, such restrictions of access to mental health services may be shortsighted.”(footnotes omitted)).

285 See Welch, Charles A. et al., Depression and Costs of Health Care, 50 Psychosomatics 392, 392 (2009)CrossRefGoogle ScholarPubMed.

286 Id. at 393.

287 Id.

288 Id. at 394.

289 Id.

290 Id.

291 Id.

292 Id. at 394-95.

293 Id. at 395.

294 Id. Other studies report similar findings. See, e.g., Arnow, Bruce A. et al., Relationships Among Depression, Chronic Pain, Chronic Disabling Pain, and Medical Costs, 60 Psychiatric Servs. 344, 344 (2009)CrossRefGoogle ScholarPubMed (finding that patients with major depressive disorder and co-morbid disabling chronic pain had higher medical service costs than other groups of patients who had either disabling chronic pain or depression or neither); Egede, Leonard E., Zheng, Deyi & Simpson, Kit, Comorbid Depression Is Associated with Increased Health Care Use and Expenditures in Individuals with Diabetes, 25 Diabetes Care 464, 464 (2002)CrossRefGoogle ScholarPubMed (finding that “depression in individuals with diabetes is associated with increased health care use and expenditures, even after adjusting for differences in age, sex, race, ethnicity, health insurance, and comorbidity”).

295 Welch et al., supra note 285, at 399.

296 Id.

297 Id.

298 Id.

299 Unützer, Jürgen et al., Healthcare Costs Associated with Depression in Medically Ill Fee-for- Service Medicare Participants, 57 J. Am. Geriatric Soc. 506 (2009)CrossRefGoogle Scholar [hereinafter Unützer et al., Healthcare Costs].

300 Id. at 507.

301 Id. at 508.

302 Id.

303 Id.

304 Id. at 509.

305 Id.

306 Id. at 508.

307 Id. at 509.

308 Id. at 510.

309 Id.

310 Simon, Gregory E. et al., Recovery from Depression Predicts Lower Health Services Costs, 67 J. Clinical Psychiatry 1226 (2006)CrossRefGoogle ScholarPubMed.

311 Id. at 1226, 1228-29. The patient data analyzed was representative of GHC's general patient population, including private employer-enrolled members, Medicare beneficiaries, Medicaid beneficiaries, and enrollees of the Washington Basic Health Plan, a state-subsidized program for lowincome residents of the State of Washington. Id. at 1227.

312 Id. at 1226, 1228.

313 Id. at 1226.

314 Id.

315 Id. at 1226, 1230; see also id. at 1229 (“After adjustment for baseline differences, health services costs were approximately 50% higher for patients with persistent depression than for patients who reached full remission. This cost difference was spread across all categories of outpatient and inpatient health services. Comparison of visit and hospitalization rates showed the same pattern: consistently higher utilization for those with poorer depression outcomes.”).

316 See Unützer, Jürgen et al., Long-Term Cost Effects of Collaborative Care for Late-Life Depression, 14 Am. J. Managed Care 95 (2008)Google Scholar.

317 Id. at 95-96.

318 Id.

319 Id. at 96.

320 Id.

321 Id. at 95, 98.

322 Id. at 98.

323 Id. at 95.

324 Id. at 100. For additional information regarding the IMPACT study and the adoption of the IMPACT approach by other healthcare delivery systems due to its cost effectiveness, see generally Justin Reedy, Team Treatment for Depression Cuts Medical Costs, UW TODAY (Feb. 7, 2008), http://www.washington.edu/news/archive/id/39654. Scientists also have studied the effect of scaling back mental health spending following a period of mental health spending, and their findings continue to support mental health parity. See, e.g., Rosenheck, Robert A. et al., Effect of Declining Mental Health Service Use on Employees of a Large Corporation, 18 Health Aff. 193, 201 (1999)CrossRefGoogle ScholarPubMed (finding that general healthcare costs and sick days increased when mental health spending was cut back at one large self-insured company; concluding that, “[p]erhaps the most important implication of this study is that reductions in use of mental health services can be associated with compensatory increases in use of medical services and may adversely affect the functional and health status of patients, with no savings to payers”).

325 See Simon et al., supra note 264; Simon, et al., supra note 310; Unützer et al., supra note 272; Unützer et al., Healthcare Costs, supra note 299; Unützer et al., supra note 316; Welch et al., supra note 285.

326 See, e.g., French, Michael T. et al., Benefit-Cost Analysis of Residential and Outpatient Addiction Treatment in the State of Washington, 24 Evaluation Rev. 609, 626 (2000)CrossRefGoogle ScholarPubMed.

327 See id.

328 See id. at 617-18.

329 See id. at 625-26.

330 See id. at 625.

331 See id. at 627 (“It therefore appears that the State of Washington is receiving value for its treatment investments in both clinical and financial terms—at least to the extent that these samples are representative of patients entering treatment.”).

332 See supra notes 242-53 and accompanying text.

333 Id.

334 See, e.g., Interim Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, 75 Fed. Reg. 5410, 5422 (Feb. 2, 2010) (“Since the early 1990s, many health insurers and employers have made use of specialized vendors, known as behavioral health carve-outs, to manage their mental health and substance abuse benefits. These vendors have specialized expertise in the treatment of mental and addictive disorders and organized specialty networks of providers. These vendors are known as behavioral health carve-outs. They use information technology, clinical algorithms and selective contracts to control spending on mental health and substance abuse treatment.”); Barry, Political Evolution, supra note 37, at 190 (discussing behavioral health carve-out plans); Ma & McGuire, supra note 249, at 54.

335 See, e.g., Barry, Political Evolution, supra note 37, at 190 (noting growth of carve-out plans); Frank et al., supra note 239, at 1702 (noting tendency of carve-out plans to reduce spending); Ma & McGuire, supra note 249, at 54 (“The rapidly growing use of separate carve-out contracts has been stimulated by reports of very favorable cost experience for many payers, with some savings reported to be in the range of 40 percent or more.” (footnote omitted)).

336 See, e.g., SURGEON GENERAL REPORT, supra note 37, at 423.

337 See Goldman, William, McCulloch, Joyce & Sturm, Roland, Costs and Use of Mental Health Services Before and After Managed Care, 17 Health Aff. 40, 41 (1998)CrossRefGoogle ScholarPubMed.

338 Id. at 45.

339 Id. at 46-47.

340 Id. at 48.

341 Id. (“[S]witching to managed care dramatically reduces costs even if benefits are increased. Moreover, this is not just a one-time cost reduction after which the cost spiral restarts; rather, our data show long-run cost containment.”). For similar conclusions, see also Barry et al., Political History, supra note 80, at 414-15 (“All the employer groups we interviewed pointed out that this newer research evidence, together with their own experiences with benefit expansion under managed care, contributed to the evolution in their view that comprehensive parity would not break the bank.”); Sturm, Roland, Zhang, Weiying & Schoenbaum, Michael, How Expensive Are Unlimited Substance Abuse Benefits Under Managed Care?, 26 J. Behav. Health Servs. & Research 203, 210 (1999)Google ScholarPubMed (“In contrast to the common belief that unlimited SA [substance abuse] benefits will break the bank and therefore are not a realistic policy option, ‘parity’ for SA in employer-sponsored health plans is affordable under comprehensively managed care.”).

342 See Ma & McGuire, supra note 249, at 54.

343 Id. at 62.

344 Id. at 63.

345 Id.

346 Id.

347 Id.

348 Id. at 64-65.

349 Id. at 63. For similar findings, see also Frank, Richard G. & McGuire, Thomas G., Savings from a Medicaid Carve-Out for Mental Health and Substance Abuse Services in Massachusetts, 48 Psychiatric Servs. 1147, 1152 (1997)Google ScholarPubMed (“The carve-out program for mental health and substance abuse care in Medicaid in Massachusetts produced substantial savings for the state. Early estimates of savings on the order of 25 percent were essentially maintained throughout the life of the contract, figuring projected expenditures on the basis of medical price inflation.”).

350 See Lu et al., Demand Response, supra note 247, at 113.

351 Id. at 114.

352 Id. at 119-20.

353 Id. at 121.

354 Id.; see also Sturm, Roland, How Expensive Is Unlimited Mental Health Care Coverage Under Managed Care?, 278 JAMA 1533, 1533 (1997)CrossRefGoogle ScholarPubMed (“Concerns about costs have stifled many health system reform proposals. However, policy decisions were often based on incorrect assumptions and outdated data that led to dramatic overestimates. For mental health care, the cost consequences of improved coverage under managed care, which by now accounts for most private insurance, are relatively minor.”).

355 See DEP't HEALTH & HUMAN SERVS., EVALUATION OF PARITY IN THE FEDERAL EMPLOYEES HEALTH BENEFITS (FEHB) PROGRAM: FINAL REPORT 10 (2004) [hereinafter FEHB FINAL REPORT].

356 Id. at 1; Goldman, Howard H. et al., Behavioral Health Insurance Parity for Federal Employees, 354 New Eng. J. Med. 1378, 1379 (2006)CrossRefGoogle ScholarPubMed.

357 FEHB FINAL REPORT, supra note 355, at 1.

358 Interim Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, 75 Fed. Reg. 5410, 5425 (Feb. 2, 2010).

359 See ASSISTANT SEC’Y PLANNING & EVALUATION, DEP't HEALTH & HUMAN SERVS., GROWTH IN PREMIUMS IN THE FEHBP FROM MENTAL HEALTH PARITY (2005), available at http://aspe.hhs.gov/health/reports/05/mhsamemo.htm; FEHB FINAL REPORT, supra note 355, at 4, 6 (identifying as key research questions: “Did FEHB plans incur additional expenses in implementing the parity policy?” and “How did the parity policy affect cost of [mental health and substance abuse] care to the beneficiary and [the Office of Personnel Management]?”).

360 Goldman et al., supra note 356, at 1378.

361 Id. at 1385.

362 See Interim Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, 75 Fed. Reg. at 5425 (summarizing state experiences); MENTAL HEALTH ASS’N OF GREATER ST. LOUIS, WHY MENTAL HEALTH PARITY MAKES SENSE 1 (2004), available at http://www.mocmhc.org/documents/MHA%20Parity%20Brief.pdf (“In Minnesota, Blue Cross/Blue Shield reduced its insurance premiums by five to six percent after one year's experience under the state's comprehensive parity law … . In North Carolina, mental health expenses have decreased every year since comprehensive parity for state and local employees was passed in 1992. Mental health costs, as a percentage of total health benefits, have decreased from 6.4 percent in 1992 to 3.1 percent in 1998 … . Cost analyses of the parity law in Vermont, the most comprehensive parity law in the country, found that for one major health plan, costs increased by 19 cents per member per month, and actually decreased by 9 percent for the other major health plan in the state.” (citation omitted)).

363 Interim Final Rules Under the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008, 75 Fed. Reg. at 5424 (summarizing state experiences).

364 See supra notes 244-50 and accompanying text.

365 See, e.g., SURGEON GENERAL REPORT, supra note 37, at 428-29.

366 See supra notes 156, 232-36 and accompanying text.

367 EHB BULLETIN, supra note 23.

368 See id. at 12.

369 WORKSHOP REPORT, supra note 10, at 22; see Health Security Act of 1993, H.R. 3600, 103d Cong.

370 WORKSHOP REPORT, supra note 10, at 20.

371 Id. at 6.

372 Id.

373 Id.

374 Id. at 20.

375 Id. at 21.

376 Supra note 323-24.

377 Supra note 331.