The Affordable Care Act's Dependent Care Coverage Expansion and Behavioral Health Care

In September 2010, the Affordable Care Act (ACA) extended dependent care coverage to individuals under the age of 26, allowing young adults to remain on their parent's private insurance.

This policy offers a natural experiment to examine the impact of expanded insurance coverage on mental health and substance use treatment utilization and payment composition.

Using National Survey on Drug Use and Health (NSDUH) and Medical Expenditure Panel Survey (MEPS) data between 2005 and 2014, this study employs a difference-in-differences approach with 23-25 year olds as the treatment group and 27-30 year olds as the control group to examine the impact of the expansion on insurance coverage, behavioral health treatment utilization, and treatment payment source.

Results indicate that the dependent care coverage expansion is associated with an increase in insurance coverage, greater mental health treatment utilization, and an increase in payment for behavioral health treatment by private insurance.

This study shows that insurance coverage increased and financial barriers to getting behavioral health treatment fell. Improving access to care only led to increases in mental health treatment utilization, while substance use treatment utilization remained unchanged.

The ACA succeeded in extending insurance benefits to a population that has been historically underinsured. Along with those benefits, young adults enjoyed greater access to behavioral health care and a measure of financial protection from high costs. While the evidence has yet to be presented for the full implementation of the ACA, if these results are typical of its other provisions, then the ACA will have achieved some of its most important objectives.