The less generous insurance coverage for mental health care has generated some controversy. The major unresolved question is how the demand for outpatient mental health care responds to cost sharing. We used data from a randomized trial of fee-for-service health insurance for the nonelderly to address this question. The study enrolled 5809 persons. The results are based on 19 819 person-years of data. One hundred thirty-three percent more is spent on outpatient psychotherapy when care is free to patients than when they pay 95% of the fee, subject to an annual catastrophic limit. But, the absolute level of expenditure is low on all plans; $32 per person per year with free care. The response to psychotherapy services to cost sharing is insignificantly larger than that for outpatient general medical services. We found no evidence that more generous coverage for outpatient psychotherapy decreases total health expenditures. (JAMA 1986;256:1930-1934)