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California governor signs law to grow mental health coverage

Newsom signed nearly 20 laws that help address mental health issues in California.

SACRAMENTO, Calif. — Gov. Gavin Newsom has signed a law aimed at requiring private health insurers to cover more mental health and drug addiction treatments

State and federal laws already require health insurance companies to handle mental health treatments the same as physical health treatments. But those laws don't define what is medically necessary to determine which treatments get covered. 

For the first time in California, the bills help define “medical necessity," a move aimed at requiring private health insurance plans to pay for more mental health and drug addiction treatments.

Advocates say private insurers often deny coverage for some treatments using their own restrictive definitions. The California Association of Health Plans opposed the law, saying it recklessly defines medical necessity in a way that undermines providers. The new law takes effect Jan. 1, 2021.

During his 2020 State of the State address, Newsom talked about supporting updates to Laura's Law, which provides "community-based, assisted outpatient treatment (AOT) to a small population of individuals who meet strict legal criteria and who – as a result of their mental illness – are unable to voluntarily access community mental health services."

In total, Newsom signed nearly 20 bills that help address mental health issues in California.

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