New Law Will Slash Medicare Copayments

An overlooked portion of recent Medicare legislation promises Medicare recipients greater access to mental health benefits. Both houses of Congress passed the new law, known as the Medicare Improvements for Patients and Providers Act of 2008, over a veto by President Bush on July 15. While the media primarily focused on a provision in the act canceling a 10 percent pay cut for doctors providing services to Medicare recipients, another provision of the law dramatically cuts copayments for mental health services and also requires Medicare coverage of several important drugs used in treating mental illness.

A copayment is the portion of a medical provider’s bill that the patient is responsible for. Under the new law, Medicare recipients will eventually pay the same 20 percent copayment for outpatient mental health services that they now pay for other types of medical care. This represents a significant reduction from the 50 percent copayment that patients currently pay for mental health care. The law gradually implements the changes, with the copay dropping to 45 percent in 2011, 40 percent in 2012, 35 percent in 2013 and finally to 20 percent in 2014.

The new law also increases access to certain drugs commonly prescribed for patients with mental illnesses. Specifically, Medicare must begin to offer full coverage for prescriptions of benzodiazepines and barbiturates by 2013. Low-income patients also gain better access to certain kinds of antipsychotic and antidepressant drugs that they may not be able to afford under current pricing plans.