State discretion over Medicaid coverage for mental health and addiction services.

Approximately one-third of adults who enroll in Medicaid because of a disability have a serious mental illness. Arguably, this population stands to benefit from insurance coverage that complies with the Mental Health Parity and Addiction Equity Act (MHPAEA). The MHPAEA and the Affordable Care Act (ACA) do not guarantee such coverage for this beneficiary group; however, they provide a variety of mechanisms by which states may provide parity-compliant coverage for mental health and substance use disorder treatment. This column explains key interactions between the MHPAEA, the ACA, and the Medicaid program that permit states to determine whether and how to provide parity-consistent coverage to beneficiaries with disabilities.