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This paper examines the relationships between insurance coverage, need, and mental health services in a community-based sample of 1,015 youths who were 9, 11, and 13 years old at the beginning of the study. They were followed over a two-year period. A strong measure of need based on a standardized diagnostic interview was available and repeated over three annual waves. Data on service use was collected quarterly across two years. Major findings included: (a) high need (serious emotional disturbance [SED]) was strongly related to use of any mental health services; (b) services use was much more likely to occur with public (Medicaid) insurance coverage than either private or no insurance; (c) considerable unmet need was observed even for youths with SED; (d) school-based mental health services potentially substituted for professional mental health services; and (e) there was little unnecessary use of mental health services in the low need group. The major policy implication of these findings is that the regulation of insurance benefits should be based on level of need, rather than on arbitrary limits which are likely to either reduce the probability of or appropriate amount of care for youths who most need mental health services....
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