Historically in America, health plans did not cover mental health services. However, this coverage expanded when President George Bush signed the "Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equality Act' in 2008. This Mental Health Parity Act mandates non-discriminatory access to mental health services for millions of Americans, although some limits to coverage still exist. This new law, which took effect in 2010, prohibits insurers from offering different benefits for mental health treatments. Patients must receive the same coverage as provided for physical illnesses, including deductibles, co-payments, annual coverage limits, lifetime limits, and caps on visits.

The Mental Health Parity Act applies only to group health plans. Thus individuals who purchase individual health plans may still face limitations to access to health care for psychological and psychiatric illnesses. In addition, the Parity Act does not apply to Medicare recipients, although a separate law addresses this exclusion. Medicare recipients will no longer face differing co-payments for mental health services. Prior to this new law, co-payments for mental illness treatments were 50 percent as compared to 20 percent for other physician services. This change for Medicare will be phased in by 2016.

Patients covered by the Mental Health Parity Act still face hurdles to receiving equal coverage. The federal law applies only to "serious mental illness." Coverage for serious mental illness may be subject to the insurance company's determination that medical treatment is a necessity. Serious mental illnesses include: schizophrenia, paranoid disorders, bipolar disorders, major depressive disorders, schizo-affective disorders, obsessive-compulsive disorders, post-traumatic stress disorder, and panic disorder. So patients searching for "grief counseling" may not find equal coverage in their health plans. Although the patient may feel depressed, the insurance company must still sign off on the medical necessity of treatment.

The Mental Health Parity Act does not require private insurance company to offer mental health benefits. The Act prohibits discrimination between physical health coverage and mental illness coverage. Insurance providers may not charge higher co-payments or deductibles, or enact greater limitations to services for mental illness treatments. However, an insurance company may choose to opt out of providing mental health services completely.

Other opt outs from the Mental Health Parity Act include a cost based exemption. If providing equal coverage for mental illness treatments causes the costs of a health plan to increase by more than 2% in the first year, and 1% in the following years, the insurance company can request a one year exemption. Also Self-Funded Non-Federal Government Employees may opt out. The law does not include small employers, those with fewer than 50 employees. And the law exempts health plans that cover only retirees.