Abstract Background: There is continuing interest in the effects of coinsurance rates on the use of ambulatory mental health services. Persons who expect to use mental health services may choose coverage with more generous mental health benefits, as such treatment may be expected to be a recurring activity. However, it may also be the case that if the expected need for such services is somehow reflected in lower perceived human capital in the labor market, then persons who have a higher probability of use may face a less generous set of health insurance options. These behaviors imply some simultaneity in the determinants of the coinsurance rate facing an individual and their mental health use. Aim of the study: To explore the joint determination of the use of and coinsurance for ambulatory mental health services, using non-experimental data for a nationally representative sample of the non-institutionalized who had employer-based health insurance in the United States. Methods: I estimate an instrument for the ambulatory mental health coinsurance rate. I then estimate two models of the demand for ambulatory mental health care as a function of the coinsurance rate for this type of care and other factors, one using the actual coinsurance rate and the other using the estimated instrument for the coinsurance rate. Results: In the instrumental equation, an index of the mental distress of the key worker most likely to be the policy-holder has no statistically significant effect on the worker's coinsurance rate. However, a similar measure for other members of the worker's family has a positive and statistically significant effect on the worker's coinsurance rate. In the demand equations, neither the actual coinsurance rate nor its instrument has a statistically significant coefficient. Discussion: Having another family member who may need mental health care results in some effort to seek a health plan with a higher coinsurance rate for such services. While the mental health index for the key worker would motivate the same type of seeking behavior, a higher level for this index for the key worker might also be correlated with a lower level of perceived human capital in a prospective employer's eyes, and this might result in a more restricted set of plan options for mental health care in the labor market. The absence of statistical significant for the coefficients of the actual coinsurance rate and its instrument also provides some limited but suggestive evidence of employer-side selection effects
