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More Mental Health Costs Now Covered by Medicare

February 19th, 2014

Beginning this year, Medicare will cover more mental health care costs for older adults, addressing a long-standing issue. However, some problems with Medicare mental health coverage remain.

For many years, there was an unjustified disparity between Medicare coverage for mental health care compared to coverage for other medical services. While Medicare paid 80 percent of the bill for most medical services (after a relatively low annual deductible), a much smaller percentage of mental health services was covered. However, Congress passed legislation that began phasing in more coverage starting in 2008, and the phase-in is now complete: beginning January 1 of this year, Medicare covers 80 percent of mental health services.

While the change is welcome, full parity for mental health services under Medicare has not been reached. A lifetime cap of 190 days for inpatient psychiatric care still applies, while there is no such cap for other inpatient medical care paid for by Medicare. Meanwhile, it is unclear whether there is otherwise equal treatment of mental health services covered by Medicare compared to other medical and surgical services.

Adding to the difficulties faced by older adults who need mental health services, a study published recently in JAMA Psychiatry revealed that just over half of psychiatrists said they were willing to take payments from Medicare in 2010, a drop of 20 percent since 2005. This is due in part to the fact that Medicare reimbursement rates are relatively low when the amount of time that providers spend with patients is taken into account.

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