A Colorado law leveling behavioral and physical health in insurance coverage went into effect Jan. 1, preventing carriers in the state from limiting the “medically necessary treatment” of behavioral, mental health and substance use disorders.
The law was passed in early 2025 and keeps insurers from limiting the treatment of chronic disorders to short-term symptom-mitigation efforts, as well as changing medical necessity determinations for mental health treatment, outside of findings of fraud.
The legislation calls for insurers to rely on national criteria for medical necessity. The state’s commissioner may also adopt rules to ensure carrier utilization review compliance, establish data-testing requirements for plan design and set timelines for provider visits.
According to Mental Health America’s “State of Mental Health America 2025” report from October, Colorado ranked 41 out of the 50 states and the District of Columbia for mental health status and care access. In 2025, some states had fined insurers for violating mental health parity laws, while Illinois moved away from prior authorization for certain mental health crisis services.
