Health Insurers Push Back On Biden’s ‘Burdensome’ New Mental Health Parity Rules

The long battle over mental health parity is heating up again, with the Biden Administration pushing for new regulations that would force insurers to prove that they are providing mental health care coverage comparable to other health coverage, and insurers protesting that such requirements will raise new costs and difficulties with compliance.

This is an old war: the first mental health parity law was passed in 1996, requiring that mental health coverage be roughly the same as medical health coverage. But carve-outs, exceptions, and cost-sharing policies gave insurers loopholes that reduced the effectiveness of the legislation—and new versions passed in 2008 and 2010 tried with limited success to close those loopholes and make mental parity a reality, rather than just a talking point.

At a time when mental health services have never been in higher demand, the Biden Administration took another run at improving coverage in July, using the Departments of Labor; Health and Human Services; and Treasury to call for a series of new rules to make mental health care more accessible and affordable to consumers. The new measures would strengthen requirements on mental health coverage parity, require insurers to show they are in compliance, and expand the reach of the law to government health plans.

Industry pushes back –  hard

Insurers and some HR groups immediately raised objections to the proposed changes; they pointed to a shortage of mental health providers and said that the new requirements are unrealistic and burdensome to employer-sponsored plans. AHIP, the national association of health plans, said that it shared the goal of providing access to mental health services, but that the Biden Administration measures would do more harm than good. “The proposed regulations have significant legal, policy, and operational flaws and should not be finalized,” the organization said in a 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. Instead, we urge the Departments to take this opportunity to gather stakeholder feedback about the areas that remain unclear for achieving effective compliance with [federal regulations] and use that feedback to inform a future [rulemaking proposal] that adheres to statutory authority while avoiding the unintended consequence of hindering the availability, affordability, or safety of mental health care and substance use disorder treatment.”

Other groups, such as the American Benefits Council, said they have serious questions as to how the new rules will affect employers who have been working hard to provide good mental health care benefits.

“The proposed rules are extensive and will impose significant new and costly requirements on group health plans,” the council said in a letter to governmental agencies involved. “We have identified several aspects of the proposed rules that raise significant concerns, including because they could have unintended negative impacts on participants and beneficiaries, are unworkable, or require substantial additional clarification. While employers are more than willing to do their part to support mental health of employees and their families, it is essential that any final regulations avoid undermining safe, effective, affordable coverage and are clear, fair, and workable.”

Another group, the ERISA Industry Committee, also raised strong objections to the new rules. “The proposed regulations are so burdensome that many of our members will have no other choice but to re-think the type and level of their plans’ coverage of mental health and substance use disorder benefits,” the organization said in a statement.

Provider, patient groups are more supportive

Many stakeholders are more positive about the Biden Administration proposals. These include provider groups and organizations representing consumers and patients.

The American Psychiatric Association strongly supported the new moves, saying, “For far too long and despite efforts from the federal and state governments, many insurers have treated mental health as an afterthought to physical health, leaving patients and families dealing with mental health and addiction issues scrambling to find affordable care, or going without.”

Another advocacy group, the Mental Health Liaison Group (MHLG), which represents consumers, providers, and other stakeholders, praised the new measures, saying, “MHLG strongly supports the 2023 Proposed Rule’s overarching goal to increase access to mental health and substance use disorder treatment by addressing treatment limitation that place a great burden on participants/beneficiaries’ access to [mental health treatment] than to medical/surgical treatment.”

Also speaking out in favor of the new rules was the American Hospital Association, which called the new proposal a step in the right direction. “This decisive action to limit barriers to access vital mental health and substance use disorder services means patients are more likely to get the care to which they are entitled under the law,” the group said in a statement. “It also means that providers can spend less time on burdensome and unnecessary insurance barriers and more time on patient care.”


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