In the months since the tragic shooting at Sandy Hook Elementary School in Newtown, CT, the debate around gun violence has been on the top of everyone’s mind. Yet advocates for mental healthcare reform say the true culprit is what some describe as a failing mental healthcare system. The shooting has prompted calls for mental health reform. With the loss of so many lives, making access to mental healthcare is a necessity.

Today, with demand for public mental health services extremely high, especially at a time of severe economic distress, the crisis in mental health care continues. The impacts are felt throughout society as people go without the treatment they need.

According to a recent study, the United States spends $113 billion on mental health treatment,which ends up being about 5.6% of the national healthcare spending.

States cut $1.8 billion from their mental health budgets during the recession. That figure comes from the National Alliance on Mental Illness (NAMI), which notes that states tend to play a larger role in providing mental health services than they do with physical health. Due to the budget cuts, community services have been eliminated and mental health providers reduced.

NAMI’s research also concluded that people with mental illness is prevalent among the uninsured. More than one in four adults in America, who lack insurance, have a mental illness.

Increasingly, emergency rooms, homeless shelters and jails are struggling with the effects of people falling through the cracks due to lack of needed mental health services and supports.

The 2010 Affordable Care Act (ACA) has significant implications for financing behavioral health services. Most notably, reform will lead to a substantial expansion of insurance coverage, which could replace out-of-pocket or direct government payment for mental health services. These expansions will result in new populations accessing mental health services.

The ACA also includes several specific provisions directly related to mental health. For example, the legislation includes beneficiaries with serious and persistent mental illness among the target populations for the new Medicaid health home option and improves states’ ability to use the Home and Community Based Services (HCBS) option to serve individuals with serious mental illness. It also establishes educational training grants for mental and behavioral health providers in its workforce development provisions. Other specific provisions in the law, while not specifically targeted to individuals with mental illnesses, are particularly prominent for this population.

Beginning in 2014, when fully implemented, the law will provide access to coverage for an estimated 32 million Americans who are now uninsured. While many operational issues remain to be resolved, it is clear that ACA will impact the financing and delivery of care for individuals with behavioral health needs.

In addition to the ACA, the Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA), requires parity in insurance coverage of medical/surgical and mental health services and substance use disorders. MHPAEA requires group health plans and health insurance issuers to ensure that financial requirements (such as co-pays and deductibles) and treatment limitations (such as visit limits) applicable to mental health or substance use disorder benefits are no more restrictive than the predominant requirements or limitations applied to substantially all medical/surgical benefits.

MHPAEA applies to plans sponsored by private and public sector employers with more than 50 employees, including self-insured as well as fully insured. MHPAEA also applies to health insurance issuers who sell coverage to employers with more than 50 employees.

Behavioral health services have been largely resistant to changes in the healthcare system caused by the recession, enabling strong growth for the Mental Health and Substance Abuse Centers industry during the five years to 2012. Increased awareness and funding for mental health and substance abuse issues will encourage future revenue growth as healthcare reform provides more coverage.

Rural areas also suffer from chronic shortages of mental health professionals. One report concluded that of the 1,669 Federally designated mental health professional shortage areas, more than 85% are rural.

An influx of people into the health insurance market as well as the requirement that mental health services be offered at parity has great potential to increase consumer utilization of mental health treatment services.

The increased attention to mental health, as well as easier access to insurance coverage, has led demand to outpace supply in the behavioral health market, according to a 2013 industry outlook from RBC Capital Markets. A surge in the number of mental health providers and organizations is to be expected with more attention being focused on behavioral health programs and organizations. Also, the demand in mental health services has increased in recent years due to the earlier and more accurate diagnosis of mental health conditions.

With the reform of healthcare, payers are beginning to cover more mental health patients. This points to the growing demand for commercial financing to mental health providers. Smaller companies are planning to expand around the country. Mergers and acquisitions will also be prevalent with the passing of healthcare reform as more businesses are looking to grow to accommodate the increase in mental health patients.