Many consumers with insurance are forced to pay hundreds and even thousands of dollars a year on mental-health care despite a 15-year-old law that is supposed to make such treatment as affordable and accessible as any other type of medical care.
Now the Biden administration wants to impose new requirements on insurers that it says would reduce out-of-pocket costs for mental-health care and substance-use-disorder treatment. The insurance industry is firing back, arguing the proposal would drive up prices and set impossible-to-meet standards.
The Biden administration proposal would make insurers collect and analyze data to ensure that certain insurance provisions—denial of coverage, for example, or requirements that consumers obtain insurance approval before treatment—aren’t posing barriers to mental-health treatment compared with other types of medical claims.
Insurers say the proposal imposes costly mandates and does nothing to alleviate a provider shortage that has thwarted some of the industry’s efforts to attract more in-network mental-health providers. The costs of the requirements to insurers would be $291 million in the first year and about $118 million in subsequent years, according to the proposal.
“The proposed regulations have significant legal, policy, and operational flaws and should not be finalized,” said AHIP, a trade group for the insurance industry, in a comment letter to the administration. “Perhaps more importantly, the proposed rules will not achieve the goals of increasing access to mental health care or substance use disorder treatment.”
The standoff underscores the challenges of fixing cracks in the U.S. mental-health-care system when its infrastructure is already strained by rising demand for treatment.
In the waning days of the Covid-19 pandemic, three in 10 adults reported symptoms consistent with anxiety and depression, according to KFF, formerly the Kaiser Family Foundation. Ninety percent of adults believe the country is facing a mental-health crisis. Drug-overdose deaths have also sharply increased.
But 55% of people with mental illness—or about 28 million individuals—receive no treatment, according to a recent survey by Mental Health America, a nonprofit focused on mental health.
“Many people pay entirely out of pocket, and those who can’t often go without,” said Jennifer Snow, national director of government relations and policy at the National Alliance on Mental Illness, a mental-health organization. “We have mental-health parity on paper but not in practice.”
A landmark law, the Mental Health Parity and Addiction Equity Act of 2008, helped curtail arbitrary annual limits imposed by insurers on mental-health coverage. Insurers aren’t supposed to put such limits on mental-health visits if they don’t also have similar limits on doctor visits for a chronic condition like asthma. They also aren’t supposed to impose higher copayments and deductibles or more restrictive prior-authorization requirements for mental-health care.
But the promise of out-of-pocket parity remains far more elusive. The reasons are complex: There is a shortage of mental-health clinicians, with an estimated 350 individuals for every one mental-health provider, according to Mental Health America.
Those who are in practice often eschew insurance participation because they generally get lower reimbursement rates compared with other types of medical providers.
Reimbursements for primary-care providers in 2017 were almost 24% higher than reimbursements for behavioral health, according to a report by Milliman, a provider of actuarial and related products.
Robyn Caruso, a licensed marriage and family therapist in Los Angeles, says she takes insurance but gets paid significantly less than patients who self-pay.
“There are a lot of administrative costs too, such as billing,” said Caruso. “You get less reimbursement, and it takes more time.”
Under the proposal, insurers would have to provide the comparative analysis on mental-health coverage to regulators upon request. If the administration determines there is a disparity, insurers would have 45 calendar days to come into compliance. Insurers that still fail to correct the disparity would have to inform health-plan enrollees that they are in violation of the mental-health parity law.
They would also have to be sure their networks of mental-health providers are robust enough to ensure access when compared with networks of other medical providers.
If finalized, the requirements would apply on the first day of the first plan year beginning on or after Jan. 1, 2025.
AHIP, the insurers’ group, said in comments to regulators that it is concerned that “many of the new requirements create compliance tests for health-insurance providers that cannot be realistically passed.”
Mental-health advocates say insurers should be doing more.
“We continue to see major problems with coverage barriers put in place that really restrict access and thwart the promise of the law,” said David Lloyd, chief policy officer at the Kennedy Forum, which advocates for people with mental illness and intellectual disabilities. “This belies insurers’ claims that they are making an effort here. We’re disappointed by the pushback by insurers.”
The requirements are necessary because insurers still find ways to deny or limit coverage in ways that are more restrictive than for medical or surgical care despite the mental-health parity law, the administration says.
Some consumers agree. Joshua Deighton exhausted his administrative appeals after Cigna Health denied coverage for his son’s yearlong stay at a residential treatment center. The stay cost around $12,000 to $15,000 a month, and his son was there for almost 24 months. He said Cigna used separate treatment limitations on residential treatment that his insurer didn’t apply to medical and surgical benefits in violation of the federal parity law.
In August, he filed a lawsuit against Cigna in the U.S. District Court in Los Angeles.
Cigna Health said it has been an early and strong supporter of mental-health parity. The insurer said it believes the complaint lacks merit and that it will defend itself against the allegations.
“With health insurers, they’re not eager to pay,” said Deighton, who is an attorney in Los Angeles. “The residential program was undeniably effective. My son was able to succeed and finish high school.”
He is now attending a university and considering postgraduate study.