Under the Affordable Care Act, low-income people at risk for mental-health emergencies, and those fighting substance abuse issues finally had a way to pay for preventative and rehabilitative services. “Basically, what that did then is create a sort of plan of care for people,” says Doug Walter of the American Psychological Association. “Rather than being cycled in and out of emergency rooms, they actually now had access through the medicaid expansion to mental health providers like psychologists who then could provide a plan of treatment.”

Beyond providing massive expansions in health coverage via Medicaid and subsidized private insurance, the Affordable Care Act also expanded previous laws that helped ensure mental-health services for those people with coverage. Prior to 2008, insurers were allowed to provide less coverage for mental health and substance-abuse services relative to other services. According to Elizabeth Stuart, a professor and mental-health research at Johns Hopkins University, back then “health insurers could say that if you need 300 inpatient days for a physical condition, that's fine, but they could say you could only have 25 days for mental health or substance abuse.” And insurers could also charge enrollees more for less. “Previously they might have had higher copays or deductibles for mental health services,” Stuart says.

In 2008, however, Congress passed the Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act, which mandated that employer plans cover mental-health and substance-abuse services at the same level as medical and surgical services. The Affordable Care Act extended that parity to individual plans via its essential health benefits, and also extended it to over 20 million state Medicaid and Medicaid managed care plans via its benchmark requirements. Between enrollment in exchange plans and those Medicaid plans, the ACA provided a parity guarantee for mental-health and substance abuse services for over 30 million people, many of whom faced the most dire issues on those fronts.

The American Health Care Act would undo that. The AHCA’s provisions to sunset the Affordable Care Act’s Medicaid expansion and discontinue enhanced funding for able-bodied low-income adults would remove critical mental-health funding for those enrollees. But even for those who remained eligible for Medicaid, the bill would also create per-capita caps on funding, and establish state-optional block grants that would constrain the overall per-person funding per state—which is currently open-ended. The block grants would also cap the number of people who could enroll in a state, and would allow states flexibility to skirt parity rules and create more barriers to mental-health care for enrollees.

Most of the AHCA’s immediate effects on mental-health and substance-abuse services would come from its large changes to Medicaid, but it also has significant potential impacts on parity in private coverage. Amendments to the law allow states to waive certain federal protections for exchange plans, including essential health benefits and community rating, which means states could choose to essentially eliminate mental-health parity in exchange plans.