Medicare Mental Health Parity: A High Potential Change that is Long Overdue Laysha Ostrow, BS Ronald Manderscheid, PhD Abstract Recent changes in legislation regarding mental health parity in Medicare will revolutionize payment for mental health care and delivery systems. This commentary discusses why this policy change was essential to promote adequate care for populations served by Medicare and to address expected changes in beneficiary, provider, and plan behavior as more equitable payments by Medicare are implemented. When Medicare was signed into law as Title XVIII of the Social Security Act in 1965, it was implemented with disparate benefit coverage for mental health care. More than 40 years later, on July 15, 2008, this disparity was eliminated by the Medicare Improvements for Patients and Providers Act of 2008. 1 This paper primarily is about Medicare fee-for-service plans; Medicare- managed care plans have been allowed to set their own co-pay rates, although many of them previously have not had mental health parity. Until recently, coverage for mental health services has skewed their use. With parity in Part B ambulatory mental health co-pays, we expect that more appropriate services will be provided. The Medicare Beneficiary Population The Medicare beneficiary population is comprised of people age 65 and above and people with persistent disabilities (who are qualified to receive Medicare through the Social Security Disability Insurance program [SSDI]), many of whom have mental disorders. It is difficult to estimate the exact number of people on Medicare who have mental illnesses. In many cases, prevalence estimates are based on encounter data. We know from epidemiological studies that 26.2% of adults Address correspondence to Laysha Ostrow, BS, Human Services Research Institute, 2336 Massachusetts Avenue, Cambridge, MA 02140, USA. Phone: +1-617-8442516; Fax: +1-617-4971762; Email: lostrow@hsri.org. Ronald Manderscheid, PhD, Mental Health and Substance Abuse Programs, Global Health Sector, SRA International, Rockville, MD, USA. Phone: +1-240-5142607; Fax: +1-240-5142601; Email: ronald_manderscheid@sra.com Ronald Manderscheid, PhD, Department of Mental Health, Bloomberg School of Public Health, Johns Hopkins University, Baltimore, MD, USA. Phone: +1-240-5142607; Fax: +1-240-5142601; Email: ronald_manderscheid@sra.com Journal of Behavioral Health Services & Research, 2009. c ) 2009 National Council for Community Behavioral Healthcare. Medicare Mental Health Parity OSTROW, MANDERSCHEID 285