"This is absolutely milestone legislation for those people who have mental health and substance-abuse problems," American Psychological Association legislative and regulatory affairs counsel Doug Walter told The Washington Post.

The law, included in the economic rescue package signed by U.S. President George W. Bush last week, takes effect Jan. 1, 2010, for most plans.

Businesses with 50 or fewer employees are exempt from compliance.

The law bars insurance companies from setting higher copayments or deductibles for mental health and substance-abuse treatment, the Post says.

Plans also will not be allowed to lower benefit levels or restrict the number of outpatient therapy sessions or hospital treatment days.

And if a health plan permits out-of-network visits for physical illness treatments, it will have to offer identical out-of-network coverage for mental healthcare.

U.S. insurance companies for decades could offer less comprehensive coverage for treatment of depression, anxiety and other mental-health conditions than of such diseases as cancer and diabetes.

Patients with mental illness or substance-abuse problems often did not get proper treatment or ended up paying for expensive treatment and prescription drugs out-of-pocket.